Guidelines, Policies and Forms
Licensing Harvard Patent Rights: a Guideline to the Essentials of Harvardís License Agreements
Licensing Harvard Patent Rights
SUMMARY OF MAIN TERMS FOR LICENSE AGREEMENT
SCOPE: Either an exclusive or a non-exclusive license within a defined field-of-use to make, use or sell products covered by the patent rights or made through the use of methods claimed in the patent rights. In the case of exclusive licenses, Harvard will retain the right, for itself and other not-for-profit research organizations, to practice the subject matter of the patent rights for internal research, teaching and other educational purposes. In addition, the U.S. federal government may retain certain rights under the patent rights.
SUBLICENSE: In the case of an exclusive license, the licensee will be entitled to grant sublicenses, subject to limitations that will ensure Harvardís ability to protect its rights under the agreement. In the case of a non-exclusive license, the licensee will not be entitled to grant sublicenses.
CONSIDERATION: Depending on the technology and field, license agreements typically include: a license issue fee; license maintenance fees; royalties on net sales by licensee, its affiliates and, in the case of exclusive licenses, sublicensees; in the case of exclusive licenses, an agreed percentage of non-royalty sublicense income. License agreements with start-ups typically include equity, as well, in lieu of a part of the license issue fee.
DILIGENCE: The licensee will be required to use commercially reasonable efforts to develop and commercialize products covered by the license, including using commercially reasonable efforts to develop products in accordance with a development plan to be included as an appendix to the agreement. In addition, agreements will include firm milestones that must be met in order for licensee to maintain the license. The licensee will be required to submit periodic reports to Harvard regarding the licensee's (and, where appropriate, sublicenseeís) activities related to the development and testing of licensed products and, where applicable, to obtaining governmental approvals necessary for marketing and sale. ROYALTY REPORTS AND AUDITS: The licensee will be required to make quarterly royalty reports beginning with the first quarter in which a licensed product is sold or any non-royalty sublicense income (in the case of an exclusive license) is received. In addition, the agreement will require the licensee to mai
ntain records relating to products developed, made, used and sold under the license and, in the case of exclusive licenses, amounts received from sublicensees, which records are to contain sufficient information to permit Harvard to confirm the accuracy of any reports received. Harvard will have the right to have an independent accountant audit such records for accuracy of the reports.
PATENT PROSECUTION AND MAINTENANCE: Harvard will be responsible for prosecuting and maintaining all patents and patent applications included in the license. In the case of exclusive licenses, Harvard will keep the licensee informed in a timely manner of prosecution matters and will confer with the licensee when making prosecution decisions. The licensee will reimburse Harvard for all (or a pro-rata portion, in the case of other participating licensees) past and ongoing expenses incurred for the preparation, filing, prosecution, maintenance and defense of the licensed patent rights.
WARRANTIES: Harvard will expressly disclaim any warranty of merchantability or fitness of the licensed technology for a particular purpose and any other warranty, including that the licensed products will not infringe any patent or other proprietary right.
INDEMNIFICATION: Licensee will indemnify Harvard against any claims arising out of the agreement. Harvard will require Licensee to carry insurance to back up such indemnification and to name Harvard as an additional insured.