Negotiating biotechnology license agreements with universities.

• Author: WILSON, CHRIS

Universities are a vital source of new biotechnology developments. Basic research that begins with academic goals in mind often yields technology that may be exploited commercially. Developing biotechnology for the marketplace has also become an outright goal of university research, particularly for those institutions with special ties to industry or which run medical centers that engage in patient care.

Universities are becoming increasingly sophisticated in licensing these technologies to private biotechnology and pharmaceutical companies. There are now some 300 professionally staffed technology-transfer offices in American universities and other nonprofit institutions. Only about 30 offices existed in the early 1970s. This article highlights some of the special concerns a private biotechnology or pharmaceutical company should keep in mind when licensing biotechnology from universities and in dealing with technology-transfer offices.

Inventions in the academic world

When evaluating the licensable technology portfolio of a university, it is important for a biotechnology company to keep in mind the differences between the ways in which inventions are created and nurtured in the academic world and in the commercial world. One should not assume that the steps a commercial entity would ordinarily take in safeguarding and maximizing the value of its own discoveries have been taken by the university for its biotechnology inventions. A biotechnology company is wise to approach the licensing of university inventions with a degree of care and due diligence no less than the company would apply to the licensing of technology from another commercial entity.

Revealing an invention too soon

University faculty are ordinarily highly motivated to publish the outcome of their research and to discuss their work in symposia and other public venues. An important question in evaluating any university invention is whether this motivation has led the researcher to inadvertently undermine the patentability of the invention by revealing the invention publicly at too early a time.

If information about a biotech invention is revealed to the public more than one year prior to the filing of a patent application, it is possible that the invention may no longer be eligible for a patent under American law. Moreover, publicly revealing an invention at any time prior to the filing of a patent application -- even within the one-year period allowed under U.S. law -- may...