In valuing industry collaborations, the university understands that efficient transactions and financial certainty are important to business, so it has created UB SWIFT.
This approach reduces transaction time and eliminates lengthy, costly negotiations because it empowers both parties to set research and licensing terms at the project planning stage.
The university is offering the UB SWIFT terms as a beneficial alternative to the standard option (see comparison chart below).
|Terms||UB SWIFT||UB Standard Option|
|Preferred Terms Fee||10% of the contract budget or $15,000, whichever is greater||n/a|
|Royalty Rate|| |
1% after exceeding $50 million in cumulative net sales if market entry requires human trials and regulatory approval; or
1% after exceeding $20 million in cumulative net sales for all other technology
|License issue fee||None||Negotiated|
|Minimum Annual Royalties||None||Negotiated|
|Due Diligence Milestones||None (unless the project includes federal funding)||Negotiated|
|Patent Prosecution Management||Company Manages||Negotiated|
Yes, the PI(s), the campus or the sponsoring company may individually or jointly decide the UB SWIFT terms and agreement are not appropriate for the project, in which case the terms of the contract will be negotiated. The disadvantage is that the transaction will take longer.
When companies negotiate sponsored research agreements with universities, the two issues raised most often by the companies are transaction time and lack of economic certainty concerning licensing. Payment of the Preferred Terms Fee locks the company into preferred fixed terms and using the UB SWIFT agreement means a transaction can be completed almost immediately after the scope-of-work and budget are approved. Benchmarked across industries, 1% is a very favorable royalty rate.
As an added benefit, and to account for the cost of development and product launch, UB offers a royalty-free period for up to $50 million in cumulative net sales if market entry requires human trials and regulatory approval, or up to $20 million for all other technology. Human trials and regulatory approvals add cost so the royalty-free period is greater.
If any terms are negotiated, both parties lose the intended benefit of an expedited transaction. As such, UB reserves the right to negotiate all terms if there is any deviation from the UB SWIFT agreement.
UB will still pre-negotiate exclusive (or non-exclusive terms) license terms, if appropriate, but in that instance all terms are negotiated. The disadvantages are a lengthier transaction time and the preferred terms are not offered.
When an invention is reported to the sponsor during or at the end of the project, the sponsor has the option to negotiate an exclusive license at that time. It is arguably a more appropriate time to negotiate the value of the actual intellectual property developed; however, many companies prefer to have financial certainty before the project starts. UB offers the UB SWIFT agreement to provide financial certainty with an expedited transaction.
To encourage academic-industry collaborations, one half of the Preferred Terms Fee will be deposited into the principal investigator’s non-sponsored research account for discretionary research use. If there are co-PIs, the fee will be distributed evenly among them. This funding is expected to help support the PI’s lab and seed new research avenues and proposals that grow and expand UB’s research enterprise. The remaining half of the fee will be deposited in a general account to support campus research activities.
A major advantage of using the standard UB SWIFT agreement is to accelerate the transaction time for both parties so the research project can start as quickly as possible. In return, UB offers preferred exclusive license terms. The UB SWIFT agreement is pre-approved by the Research Foundation for SUNY and was developed to be business friendly. The preferred terms are not offered if there is deviation from the UB SWIFT agreement.
Contact Jennifer Mandina: (716) 645-8952 or firstname.lastname@example.org