Background

The University of Michigan wishes to further promote collaborative research and technology relationships with industry. The Michigan Research Advantage (MRA) is one of the steps towards this goal. In exchange for a minimum financial multi-year commitment of sponsored research at U-M, a company would receive preferred intellectual property terms that can be negotiated upfront. This provides the transparency and certainty desired by many companies when investing in external research.

 

IP Considerations

In traditional sponsored research arrangements, although IP ownership and rights issues are dealt with upfront (Pre-IP), usually the commercial licensing arrangements are determined after the IP is created (Post-IP). The Michigan Research Advantage seeks to accelerate commercialization and licensing arrangements through offering the sponsor the choice of pre-negotiating the IP terms at the onset of the contract development or the more “traditional” approach of the sponsor having an exclusive option to negotiate a license should IP result.

Consideration for the pre-negotiated IP rights may be specified from the following two basic formats:

  • an up-front payment or a fixed percentage of the research contract plus a “success” payment that is only triggered if a licensed product or process reaches a mutually agreed upon success threshold; or
  • an up-front option fee with pre-negotiated future financial terms based on annual payments, payments per patent or more traditional sales royalty terms.

Other details:

  • Agreement renewals are treated as new agreements and require a new negotiation of IP terms
  • Sponsor must pay full project cost and full indirect costs
  • This offering excludes agreements requiring licensing of background IP, use of federal or state funds by the Sponsor, subcontracts to other entities, and clinical trials
  • U-M retains a royalty free right to use Research IP for research, public service, internal (including clinical) and/or educational purposes, and the right to grant the same limited rights to other non-profit research institutions.
  • Other terms relating to indemnification, use of U-M names, etc. apply
  • Sponsor bears all patent costs but can direct the patent process with U-M oversight and final decision authority

 

Advantages

  • The company has upfront knowledge of the financial investment and exactly what IP rights it will receive for specified financial terms. This allows for better research budget planning and takes uncertainty risk out of the commercialization process.
  • The University of Michigan gets a committed multi-year source of funding.
  • Faster, lower risk technology transfer from the university to the commercial sector.

 

For more information on MRAs, please contact the Business Engagement Center at um-bec@umich.edu.