3.1 Exclusive Right to License. Subject to the terms and conditions of this Agreement and Lead Institution’s compliance therewith, Other Institution(s) hereby grants to Lead Institution (a) the exclusive right and final authority to negotiate, execute, and administer License Agreements that comply with the requirements of Section 3.6, and (b) except as permitted under Section 3.4, the exclusive license to grant licenses to Other Institution(s)’ rights in the Patent Rights. Other Institution(s) will not license the Patent Rights, except as permitted under Section 3.4.
3.2 Efforts to License. Lead Institution will use reasonable efforts, consistent with its usual practices, to seek Licensee(s) for the commercial development of Patent Rights and will administer all License Agreements for the mutual benefit of the Parties and in the public interest. Lead Institution will exercise reasonable efforts to ensure that any Licensee fully complies with the terms of any License Agreement. Under no circumstances will Lead Institution be liable to Other Institution(s) for monetary damages for any alleged failure by Lead Institution to meet the obligations stated in this Section 3.2.
3.3 License Agreement. Lead Institution will provide Other Institution(s) with a substantially final draft of any License Agreement or amendment to a License Agreement prior to execution for the Other Institution(s) to review for compliance with Section 3.6 of this Agreement. Other Institution(s) agrees that if it does not provide objections or comments within 10 business days of its receipt of the substantially final draft of the License Agreement or amendment, Other Institution(s) will be deemed to have approved it. Other Institution(s) acknowledges that the Other Institution(s) may not withhold approval of a License Agreement or amendment because of its expected financial return (e.g., royalties or equity level). The Lead Institution will provide the Other Institution(s) a copy of any License Agreement or amendment that is executed.
3.4 Reserved Rights. Each Party expressly reserves the right to use the Patent Rights and associated inventions or technology for educational and research purposes, and to grant such educational and research rights to other non–profit institutions. Each Party can also license rights to the U.S. government as required by its obligations related to research funding.
3.5 No Agency Relationship. This Agreement does not create an agency relationship between the Parties.16
3.6 Terms of License Agreements. License Agreements must include the terms identified in Exhibit A and be consistent with any policies and requirements of the Other Institution(s) identified in Exhibit A, except to the extent that a License Agreement with deviations therefrom is approved by the Other Institution(s) or deemed approved in accordance with Section 3.3.
3.8 No Implied License. This Agreement grants no express or implied license in any rights of either Party except for the rights explicitly granted in Patent Rights.
Exhibit A: License Agreement Requirements
[The following is a sample Exhibit A. It can be replaced by the specific license agreement requirements of an Other Institution.]
All License Agreements will contain terms covering the following:
1. Reservation of rights to all parties to the Inter–Institutional Agreement (“IIA”) and, where possible, the right to license such rights to other non–profit research institutions, to use the Patent Rights in future for research and educational purposes without payment to the Licensee;
2. Reservation of rights to government entities and to private sponsors (to the extent such rights are required under sponsored research agreements and disclosed in the IIA)
3. Payment of earned royalties on net sales by licensee and any sublicensee;
4. Reimbursement of all patent prosecution expenses if the license is exclusive;
5. Product development and commercialization diligence if the license is exclusive;
6. Periodic reports (at least annually) covering development and commercialization efforts and sale of products, including date of first commercial sale for each product;
7. Standard audit rights exercisable by the Lead Institution;
8. Indemnification of all parties to the IIA;
9. Disclaimer on behalf of all parties to the IIA of all warranties, including validity, enforceability and non–infringement of the Patent Rights;
10. Limitation of damages for all parties to the IIA to direct damages only;
11. Prohibition on the use of the names, logos and trademarks of the parties to the IIA;
12. Unfettered right on part of all parties to the IIA to publish in connection with the Patent Rights (with reasonable delays for review for confidentiality and filing for intellectual property protection);
13. Maintenance of general liability insurance as is standard for the business of the Licensee at its various stages of development and commercialization, naming all of the parties to the IIA as additional insureds, or appropriate self–insurance provisions.
14. For start–up companies, annual reporting of business information, including funding, employees, hiring and other information on request.
15. Provision to encourage licensing to address unmet needs.
16. Compliance with laws, including export control laws.
17. [Mandatory provisions required if equity granted in consideration for license]
18. [If permitted to delegate authority for patent prosecution to a Licensee, state that here.]
19. [If an exception to any License Agreement confidentiality restriction is required by state open–records laws, state that here.]
20. [Lead Institution will inform the Other Institution(s) prior to signing a License Agreement if either (a) the Licensee and Lead Institution are negotiating a sponsored research agreement or other agreement for the Lead Institution to provide services to the Licensee at the same time as a License Agreement is being negotiated or (b) the Lead Institution’s researchers are serving as founders of the Licensee.]