Standard License Agreements: UNC’s New Twist
Standardizing license agreements is beneficial to both sides of the deal: the licensor expends less resources in modifying each deal, and the licensee knows what to expect and gets the deal faster.
The trick in developing the language in these agreements is to standardize as much as possible while still allowing for flexibility in the business terms to match the technology and the markets into which it will be transferred.
The University of North Carolina at Chapel Hill recently announced its “Carolina Express License Agreement” – a standard licensing agreement with an interesting twist. UNC’s “Express” agreement standardizes the business terms for all university-led start-ups. Regardless of the market potential, the royalty structure is the same.
By limiting the “Express” agreement to deals with professors, students and staff, UNC has established a preferential situation to encourage home-grown entrepreneurship while still protecting the university’s interests in commercialization. Presumably, a more vibrant entrepreneurial community will lead to more innovation and potential future benefactors to the university.
It will be interesting to observe the impact of this agreement at UNC as well as its adoption at other universities.
Editor’s Note: Check out Laura’s later post on this topic: “Ready-to-Sign Licensing Agreements: Does One Size Fit All?”
–By Laura A. Schoppe