Introduction
Intellectual property (“IP”) rights in technology generated by A*STAR’s research institutes (“RIs”) are owned by A*STAR where A*STAR licenses her IP through A*ccelerate. If you choose to take a license from us and agree to the standard provisions listed within, we are usually able to conclude the agreement (within a few weeks) once we have agreed on the key commercial terms (such as licence fee structure, royalty rates, field of use, territory, etc). The standard terms as spelt out in our license agreement templates are consistent with best practices of most Technology Transfer Offices of government-funded research and academic institutions in the US and UK.
Exclusive Vs Non-Exclusive Licenses
There are two types of licenses that can be granted – exclusive licenses and non-exclusive licenses. An exclusive IP license, as the name suggests, allows the licensee to be the sole party to use the IP. A non-exclusive license allows the IP rights to be used by more than one licensee.
Non-exclusive licensing allows A*STAR to benefit as many companies and entities as possible with the use of its publicly-funded IP. This is especially so if the IP has a broad scope and can be used in multiple industries or applications, in order to foster product development in its various fields of use.
However, we do grant exclusive rights to IP in certain situations. For example, if the IP requires significant further investment to be market-ready, or if the IP is at such an early stage of development that exclusivity is required to induce investment needed to determine and demonstrate the applications of such IP. Where an exclusive license is provided, we will typically limit it to:
- Specific fields of use that are sufficiently wide to address the licensee’s potential market segments. This means that A*STAR would be able to enter into research collaborations and licensing activities with other entities outside of the licensee’s fields of use.
- Particular geographic areas where the licensee is confident of the market.
- A certain exclusivity time period sufficient for the licensee to protect its market lead (and hence its investment), after which the license rights become converted to a non-exclusive one.
We reserve the right to terminate the exclusive license or convert it to a non-exclusive license if mutually agreed commercialisation milestones (as set out in the license agreement) have not been met by the licensee. This is to facilitate the potential exploitation of the IP rights by other licensees.
Licensor’s Obligations and Restrictions
We do not provide indemnities and warranties. Our IP is provided ‘as-is’. The licensee, as the party who will be commercially exploiting the IP in a particular field and manner, has to perform his own checks and due diligence on the prior art and any regulations governing the use of the IP in question.
We do not generally agree to non-competition clauses in our license agreements. Neither will we agree to provide a pipeline of A*STAR’s future research results (e.g. enhancements on the licensed IP) to any one licensee. This would be a monopolistic and anti-competitive arrangement.
Licensee's Obligations
We require licensees to provide indemnification against the liabilities that might arise from the use and sale of licensee's commercial products involving the licensed IP. This is because the licensee has full control over the use of the licensed IP and should it be used in a breaching manner which causes A*STAR to incur liability, and A*STAR will need to be fully compensated.
Where exclusive licenses are granted, we will require the licensee to give a grant back of the rights to the licensed IP, allowing the RIs to continue further internal research and development. Such “freedom to operate” is of prime importance to our mission as a publicly-funded national research and development organisation.
When we license IP on a non-exclusive basis, licensees are usually not given rights to sublicense the IP to third parties. Any third party wishing to use the IP may approach us directly for a license of such IP. This also prevents licensees from acting as mere IP brokers instead of genuinely developing the licensed IP for market readiness. In exceptional cases, sublicensing will be allowed, subject to negotiation and approval.
We require licensees to use best efforts to commercialise the licensed IP for the market. Licensees who fail to show such efforts may have their licenses terminated. The rationale is that results of publicly-funded research should be put to productive use and hence there should be diligence on the part of our licensees to commercialise the licensed IP. Minimum royalty payments are frequently used as a form of such obligation, and in the case of exclusive licenses, additional milestones (e.g. relating to sales and investment targets) may be required.