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 Commercial Licensing: The Benefits of Licensing Directly to Industry
While negotiating a commercial license, a company like MITRE can place conditions or limitations on what the licensee does with the technology. For example, MITRE could require the licensee to bring a product to market within a certain time frame or lose its exclusive right to the technology. In addition, because negotiating a commercial license requires considerable effort, it shows commitment on the part of the licensee. When companies make that investment of time and resources, they are serious about commercializing the technology. Thus, there's a strong likelihood that the company will bring out a product based on the license that will benefit the government and the public. Commercial licenses often have several other advantages. They allow the licensor to negotiate what it wants in return for the technology. In many cases, obviously, this would be the fee itself. At MITRE, however, the "return" may be copies of the commercial company's product to use in our own research, recognition for our contribution, and/or, in some cases, a licensing fee that helps defray the cost of the transfer. Commercial licenses also give the licensee the right to set a "barrier to entry," encouraging the licensee to invest its resources in the technology by lowering the risk that a competitor can gain access to the same technology. And, in cases where the technology is very complex and the developers hold a great deal of critical knowledge about how it works, a direct license can provide a mechanism for transferring that knowledge to the licensee in the form of training or cooperative research. That may be the only way to ensure that the licensee can bring a product to market. Commercial licenses come in a variety of forms, including exclusive, limited exclusive, and non-exclusive. An exclusive license licenses the technology one time to one company. With a limited exclusive license, a technology is licensed to one company for one application or one geographic area, and to another company for a different application or geographic area. The licensor can provide an unlimited number of non-exclusive licenses to as many companies as it wishes. While many licenses, especially at MITRE, are provided to companies on a non-exclusive basis, at times it makes sense to offer exclusive licenses. "In these situations, there can be the concern that one commercial company will benefit over another, and we have to address the fairness question," explains Eldering. "Government rules related to technology transfer recognize that at certain times some exclusive licenses must be granted. This happens most frequently when the technology is considered risky and the commercial company would need to make a significant investment. Without some degree of exclusivity, the technology would never be commercialized." To ensure the selection process is fair and appropriate, MITRE "advertises" to the public when a technology is available for licensing. When a license is being negotiated, MITRE considers a variety of factors. Says Eldering, "We ask a lot of questions: How will the commercial company use the technology? How quickly can it use the technology to develop a commercial product? And how broad an impact will the product have on industry and the government? When we have these answers, we know how to proceed from a licensing perspective." Technology transferred through commercial licensing often comes back to the government, which paid for its development, as a commercial off-the-shelf product. Even if that doesn't happen, the government loses nothing in the process because it still owns the rights to use the technology. And, as the Bayh-Dole Act makes clear, it is the intent of the government that the American public benefit from the transfer of government-funded technology. In many cases, commercial licenses are a very effective way for MITRE to transfer our intellectual property to a commercial company, know that it will have an impact, track its success, and get something in return for MITRE. In the end, the public and our sponsors have access to MITRE technology in a commercial product that is available, affordable, and supportable. |
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Commercial
licensing can be an effective approach for technology transfer and, in
fact, is the vehicle that most university and federal labs use to get
their technology into the commercial or public sector. Today, most organizations
like MITRE have a technology transfer office to help make corporate decisions
related to licensing and the transfer of company technology and intellectual
property. Explains Gerard Eldering, MITRE's director of Technology
Transfer, "The goal is always to make effective decisions to get
the technology in broad use to benefit our sponsors and industry."