C7 Sublicensing Income: Contract Language, Incentives and Opportunities *CLE Eligible
Track: Licensing Successful Practices
Target Audience: Intermediate
Gregory Call, Ph.D., J.D., Crowell & Moring
Sybil A. Lombillo, Ph.D., J.D., Mount Sinai Innovation Partners
Emily Waldron Loughran, M.B.A., UCLA
Join us for an in-depth look at sublicensing income provisions in university and medical research center license agreements. Because many university and medical research center inventions are licensed to small companies that seek to develop the technology but lack the resources to market and sell the technology, a second transaction between the original licensee and a larger company takes place. Frequently the transaction will take the form of a sublicense. Our discussion will explore the typical terms in sublicensing income provisions and other provisions commonly found in agreements related to a second transaction; the types of incentives created by these provisions; and potential opportunities for licensees to avoid further payments by attempting to structure a transaction to fall outside of the sublicensing income provisions or other provisions related to a second transaction. The panel will also discuss how these provisions have been interpreted; the courts’ willingness to look past what a second transaction is called to consider what its economic reality is; the decisions that have interpreted what constitutes sublicensing income; and the impact of the contract language on those decisions. Finally, the panel will also cover the provisions related to a possible second transaction be drawn up to be neutral regarding the structure of a second transaction, and the language that should be included in a sublicensing income provision.
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