DOE National Laboratory Patent Licensing Practices

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Version 1.0 Released April 2, 2019 DOE National Laboratory Patent Licensing Practices Purpose: This resource document has been developed in response to the Government Accountability Office (GAO) report on “Federal Research: Additional Actions Needed to Improve Licensing of Patented Laboratory Inventions,” GAO-18-327 1 , in June 2018. Report Recommendation: The Secretary of Energy should ensure that the agency or its labs document processes for establishing financial terms, while maintaining flexibility to tailor the specific financial terms of each license. (Recommendation 5) Management Response 2 : Concur Negotiating terms for patent licensing is influenced by variety of different factors related to the condition of the technology and intended market as well as specific attributes of the parties. There are many complex and nuanced considerations that the professional licensing negotiator must always consider, including the: “readiness” of the technology and degree to which additional R&D or marketing investments may be needed; risk involved in those investments compared to incumbent and competing solutions; size of the market and its elasticity to adopting new technologies; license exclusivity, or non-exclusivity, and field of use; availability of inventor for continued co-development; and resources at the potential licensee to include financial, business, technical and marketing strengths. Especially for licensing negotiators of technologies developed at federal labs these factors are weighed against urgencies and alternate pathways to move the technology toward practical application. Because of the many and nuanced dimensions that impact license negotiations, it would be impractical to develop a prescriptive approach to establish patent license financial terms. Several statutes including Bayh-Dole Act, the Stevenson-Wydler Act, the Federal Technology Transfer Act, and the National Competitiveness Technology Transfer Act of 1989 (NCTTA), authorize the contractor-operated DOE laboratories to retain title to inventions created using federal funding, pursue patent protection, and license those inventions to third parties. While DOE establishes certain requirements for its lab contractors related to licensing DOE technologies, those requirements relate to non-financial considerations such as U.S. Competitiveness and successor contractor issues. The financial portions of license agreements for national laboratory technologies are between the lab contractor and the licensing entity (licensee). Nevertheless, the Department of Energy agrees that some standardization of practices by documenting minimum processes can mitigate some inconsistencies and ease efficiencies across the national labs. The DOE intends to encourage the labs that when practical with regard to time and funding resources, to make use of market analyses and benchmarking tools and services that are commercially available. DOE will coordinate with the labs to collect documentation and develop guidance that can guide the labs as they negotiate patent licenses especially for effective information gathering and basic guidelines for establishing and leveraging communities 1 Federal Research: Additional Actions Needed to Improve Licensing of Patented Laboratory Inventions. GAO-18- 327, June 2018. https://www.gao.gov/assets/700/692606.pdf 2 Excerpts from the DOE Management Response to the GAO-18-327 report.

Transcript of DOE National Laboratory Patent Licensing Practices

Page 1: DOE National Laboratory Patent Licensing Practices

Version 1.0

Released April 2, 2019

DOE National Laboratory Patent Licensing Practices

Purpose: This resource document has been developed in response to the Government Accountability

Office (GAO) report on “Federal Research: Additional Actions Needed to Improve Licensing of Patented

Laboratory Inventions,” GAO-18-3271, in June 2018.

Report Recommendation: The Secretary of Energy should ensure that the agency or its labs

document processes for establishing financial terms, while maintaining flexibility to tailor the

specific financial terms of each license. (Recommendation 5)

Management Response2: Concur

Negotiating terms for patent licensing is influenced by variety of different factors related to the

condition of the technology and intended market as well as specific attributes of the parties.

There are many complex and nuanced considerations that the professional licensing negotiator

must always consider, including the: “readiness” of the technology and degree to which

additional R&D or marketing investments may be needed; risk involved in those investments

compared to incumbent and competing solutions; size of the market and its elasticity to

adopting new technologies; license exclusivity, or non-exclusivity, and field of use; availability of

inventor for continued co-development; and resources at the potential licensee to include

financial, business, technical and marketing strengths. Especially for licensing negotiators of

technologies developed at federal labs these factors are weighed against urgencies and

alternate pathways to move the technology toward practical application. Because of the many

and nuanced dimensions that impact license negotiations, it would be impractical to develop a

prescriptive approach to establish patent license financial terms.

Several statutes including Bayh-Dole Act, the Stevenson-Wydler Act, the Federal Technology

Transfer Act, and the National Competitiveness Technology Transfer Act of 1989 (NCTTA),

authorize the contractor-operated DOE laboratories to retain title to inventions created using

federal funding, pursue patent protection, and license those inventions to third parties. While

DOE establishes certain requirements for its lab contractors related to licensing DOE

technologies, those requirements relate to non-financial considerations such as U.S.

Competitiveness and successor contractor issues. The financial portions of license agreements for

national laboratory technologies are between the lab contractor and the licensing entity

(licensee).

Nevertheless, the Department of Energy agrees that some standardization of practices by

documenting minimum processes can mitigate some inconsistencies and ease efficiencies across

the national labs. The DOE intends to encourage the labs that when practical with regard to time

and funding resources, to make use of market analyses and benchmarking tools and services

that are commercially available. DOE will coordinate with the labs to collect documentation and

develop guidance that can guide the labs as they negotiate patent licenses especially for

effective information gathering and basic guidelines for establishing and leveraging communities

1 Federal Research: Additional Actions Needed to Improve Licensing of Patented Laboratory Inventions. GAO-18-327, June 2018. https://www.gao.gov/assets/700/692606.pdf 2 Excerpts from the DOE Management Response to the GAO-18-327 report.

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of practice. The documentation of internal best practices to be developed will complement the

Licensing Guide and Sample License3 which was developed by DOE labs responsible for licensing

patents and intended to raise awareness among potential licensees about general DOE patent

license terms to be expected.

Scope: To this end, the Department coordinated with the national labs in the development of this

documentation on practices, in an attempt to make consistent some of the approaches to negotiating

patent license financial terms. Although specific processes for establishing financial terms cannot be

prescribed from the Department level, we worked with the labs to document minimum processes in

order to mitigate some inconsistences and ease inefficiencies across the national labs.

The following documentation, gathered from the DOE, the DOE National Labs, the Technology Transfer

Working Group (TTWG), and other sources, are related to the following 8 areas in the patent licensing

timeline.

Patent Licensing Timeline:

Patent Licensing Practices Documentation Table of Contents

1. Discovery ............................................................................................................................................... 4

A. INL Inventors Guide (2017) ............................................................................................................... 4

B. LBNL Researcher Handbook (2015) .................................................................................................. 4

C. PPPL Publications, Invention Disclosures and Patents (2016) .......................................................... 4

2. Invention Disclosure.............................................................................................................................. 4

A. DOE Technology Transfer Mechanisms – IP Day Slides (2018) ......................................................... 4

B. BNL Record of Invention Guidelines ................................................................................................. 5

C. LBNL Record of Invention.................................................................................................................. 5

D. LBNL Contributors to the Invention .................................................................................................. 5

E. LBNL Online ROI Submission Process ................................................................................................ 6

F. LBNL New Online Software Disclosure Submission .......................................................................... 6

G. LBNL Developers to the Disclosure ................................................................................................... 6

3 TTWG Licensing Guide (2012), containing a sample license. Included in this practices resource document in the License Execution section.

Discovery

Invention

Disclosure

Disclosure

iscovery

Invention

Protection

Partner

Development

License

Execution

Invention

Disclosure

Licensing

Process

License

Compliance Promotion

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H. LBNL Third Party Software Worksheet ............................................................................................. 6

3. Invention Protection ............................................................................................................................. 7

A. Government Interest Patents-When Public Investment Feeds Innovation (2018) .......................... 7

B. BNL Patent Protection and Licensing Procedure .............................................................................. 7

C. PPPL IP Matters (2017) ..................................................................................................................... 7

4. Promotion ............................................................................................................................................. 7

A. Lab Partnering Service ...................................................................................................................... 7

5. Partner Development ........................................................................................................................... 7

A. FNAL Licensing Guidelines ................................................................................................................ 7

B. LBNL FAQ for Industry ....................................................................................................................... 7

C. LLNL Partnering Guidelines ............................................................................................................... 8

D. How PNNL Can Help Your Business Succeed .................................................................................... 8

6. Licensing Process .................................................................................................................................. 8

A. Stevenson-Wydler Royalty Use ......................................................................................................... 8

B. ANL DOE implementation of DEAR ................................................................................................... 8

C. In the Public Interest: Nine Points to Consider in Licensing University Technology (2007) ............. 8

D. INL Licensing Process ........................................................................................................................ 9

E. NREL Licensing Process ..................................................................................................................... 9

F. PNNL Licensing Process ..................................................................................................................... 9

G. Sandia Licensing Principles (2015) .................................................................................................. 10

H. LANL Licensing Technology ............................................................................................................. 10

I. Sandia Licensing Overview .............................................................................................................. 10

J. Licensing Berkeley Lab Technologies .............................................................................................. 10

K. PNNL Licensing Guidelines .............................................................................................................. 10

L. NETL Sample License Application ................................................................................................... 11

M. ANL Commercialization Plan Worksheet ........................................................................................ 12

N. NREL Candidate Questionnaire ....................................................................................................... 12

O. ORNL License Application (2010) .................................................................................................... 13

P. SRNL Licensing Guide ...................................................................................................................... 13

7. License Execution ................................................................................................................................ 13

A. TTWG Licensing Guide (2012) ......................................................................................................... 13

B. NREL Exclusive Patent License Agreement ..................................................................................... 13

C. NREL Nonexclusive Patent License Agreement .............................................................................. 13

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D. PNNL Exploratory License Agreement ............................................................................................ 13

E. Pantex/Y-12 Start-Up Xpress Terms License Best Practice ............................................................. 13

F. Inter-Institutional Agreement ......................................................................................................... 14

8. License Compliance ............................................................................................................................. 14

A. LLNL Progress Report: Before the First Commercial Sale ............................................................... 14

B. LLNL Report of First Commercial Sale ............................................................................................. 14

C. LLNL Quarterly Royalty Report: After the First Commercial Sale Non-Government Use ............... 14

D. LLNL Quarterly Royalty Report: After the First Commercial Sale Government Use ....................... 14

E. LLNL Semiannual Royalty Report: After the First Commercial Sale Non-Government Use............ 14

F. LLNL Semiannual Royalty Report: After the First Commercial Sale Government Use.................... 14

1. Discovery

A. INL Inventors Guide (2017) Guidebook for laboratory researchers and inventors outlining the basics:

IP, including inventions and patentable matter, patent strategy, copyright, and trademark;

Licensing, including marketing and types of license terms;

INL Startups; and

Conflicts of Interest.

B. LBNL Researcher Handbook (2015) Handbook for laboratory researchers and inventors providing information on best practices to insure

inventions are protected.

Discusses lab notebooks, pre-publication review, and invention reporting;

Demonstrates LBNL order of operations after the invention for diligence in disclosure and

reporting; and

Discusses patent filing types, marketing, licensing, COI, MTA and royalty distribution.

C. PPPL Publications, Invention Disclosures and Patents (2016) Slideshow for laboratory researchers identifying:

When publishing and patenting should be explored, and why one should be selected over the

other;

The DOE requirements for publications being submitted to OSTI; and

The PPPL order of operations from invention discloser to royalty income.

2. Invention Disclosure

A. DOE Technology Transfer Mechanisms – IP Day Slides (2018) Presentation by Brian Lally, DOE GC-62, for IP Day in July 2018 containing information on:

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SPPs – use, funding, and rights to subject inventions and generated data;

ACT – use, funding, rights to subject inventions and generated data, and cost;

CRADAs – use, funding, and rights to subject inventions and generated data;

User agreements – proprietary user agreements and non-proprietary user agreements in terms

of use, funding, and rights to subject inventions and generated data; and

U.S. Competitiveness preferences and US Manufacturing guidance

B. BNL Record of Invention Guidelines Assist laboratory researchers in the invention disclosure process per BNL’s contract with DOE. The

document sections are all identified and described:

1) Preparer of Record of Invention; 2) Title of Invention; 2.a) General Description of Invention;

2.b) Novel Features; 4) Date and Place Invention was First Conceived; 5 & 6) Date and Plates of

First Sketch, Drawing, Photo, or Written Description; 7) Contrition to Invention by Preparer; 8)

Contributing Collaborators; 9) Disclosure of Invention to Others; 10) Date and Plate of

Completion of First Sample, Operating Model, or Full-Sized Device; 11) Data and Place of First

Test; 12) Extent of Use; Past, Present and contemplated; 13) Related or referenced prior art

Publications, Patents or Patent Applications; 14) Is Publication or Presentation of Details of this

Invention Contemplated? If So, in What Form and When?; 15.b) Was the Invention Made During

the Course of Work Sponsored by Another Federal Agency? If So, Identify Agency; 16) Was the

Invention made during the course of a CRADA? If So, Identify the CRADA Industry Participant;

and 17) Sketch Illustrating Invention (if Applicable).

C. LBNL Record of Invention Contains information for the laboratory researcher on what LBNL requires for an invention disclosure,

via their online portal. Researchers are encouraged to have the following information at hand before

logging in to the online portal:

Summary of Invention: title, date of first public disclosure, abstract, institutions that are or

might be interested in the invention, related inventions or software disclosures that have been

submitted previously;

Rights in the Invention: funding information, joint inventor identification;

Documentation of the Invention: identify if non-LBL or proprietary material used in the

development, list all public disclosures other than the “first public disclosure” requested earlier

in the form;

Details of the Invention: how the invention works, its features, and why it's a novel material,

device, or process, types of consumers, companies, and other organizations (i.e., customers)

most likely to use the invention, points of differentiation, Contributors to the Invention

attachment (also included in this library); and

Additional attachments and notes, including but not limited to: published or unpublished

articles about the invention, test documentation, agreements with outside organizations, and

PowerPoint or poster presentations about the invention.

D. LBNL Contributors to the Invention A worksheet for inventors to use to ensure everyone who made an intellection contribution to the

invention be given attribution.

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Required document for Record of Invention Submission at LBNL via their online system.

Identification of Name, Title, LBNL Division, Non-LBNL Employer, Citizenship, Work Address,

Work Phone, Work Email, Personal Address, Personal Phone, and Personal Email are required.

E. LBNL Online ROI Submission Process A flow chart for inventors on the process their Record of Invention goes through after submitting to

LBNL’s online system.

The process from ROI Online Submission to Patenting is identified in a decision tree, including

various stages of requesting additional information on the initial submission.

F. LBNL New Online Software Disclosure Submission Contains information for the laboratory researcher specifically on Software inventions on what LBNL

requires for an invention disclosure, via their online portal. Researchers are encouraged to have the

following information at hand before logging in to the online portal:

Summary of Software: name, description, developer information, primary point of contact,

description of the features and commercial use of the software, and software distribution plan;

Funding: program manager contact information, funding information including any information

from sponsors;

Software History: provide information about the earlier LBNL software, provide information on

third party software used for the development;

Export Control: background intellectual property, such as libraries, data sets, sponsor data,

identified;

Energy Science and Technology Software Center (ESTSC): DOE’s designated, centralized software

distribution and control point, at the time permission to assert copyright is given;

Business Review and Copyright Information: software developers need to be identified with the

attachment, Developers to the Disclosure (also included in this library); and

Attachments and notes, including but not limited to: a copy of the license agreement for third

party software, agreements with contracted developers, and the password to any protected

downloads.

G. LBNL Developers to the Disclosure A worksheet for inventors to use to use to list all persons who (a) wrote any code OR (b) directly

contributed to the creation of the software.

Required document for Record of Invention Submission at LBNL via their online system.

Identification of Name, Title, LBNL Division, Non-LBNL Employer, Work Phone, and Work Email

are required.

H. LBNL Third Party Software Worksheet A worksheet for inventors to use to list any background IP and/or third party and auxiliary software

necessary for the new software invention.

Identification of name of original software and version, use, modifications, name of

developer/licensor, license type, LBNL distribution type, and a link to the repository are

required.

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3. Invention Protection

A. Government Interest Patents-When Public Investment Feeds Innovation (2018) Presentation at the Spring 2018 TTWG meeting by Andrew Toole, USPTO Acting Chief Economist

discussing:

The role patents play in the economy;

Government interest patents, including USPTO patent documents and USPOT patent

assignments database;

A resource created through a public-private partnership, www.patentsview.org; and

Preliminary trends in government interest patents.

B. BNL Patent Protection and Licensing Procedure A resource on the BNL website, providing information to the laboratory researchers on:

How BNL will determine if they will seek patent protection for an invention disclosure; and

Procedure for determination, including staff assignment, assessment, patent protection,

marketing and license negotiation, monitoring licensee progress, and royalty sharing.

C. PPPL IP Matters (2017) A presentation for laboratory researchers discussing:

The different types of IP and when each would be used in relation to their work, including

patents, copyrights, trademarks and trade secrets;

Patent timeline and associated costs; and

Patent trends, including recently patents granted to the lab.

4. Promotion

A. Lab Partnering Service Can be found at https://www.labpartnering.org/

A DOE resource that enables rapid discovery of expertise and serves as a conduit between the

investor and the innovator by providing multi-faceted search capability across numerous

technology areas and across the national laboratories.

5. Partner Development

A. FNAL Licensing Guidelines A resource on the FNAL website that provides:

Examples of the laboratory business practices and licensing terms; and

Information on the technologies available for licensing at the laboratory.

B. LBNL FAQ for Industry A resources on the LBNL website, targeting industrial partners, which provides information on:

How LBNL selects licenses, including R&D capacities, financial resources, management

commitment, and experience in relevant market;

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Licensing timeline, license duration, and cost, including common financial terms; and

U.S. based companies, and U.S. based manufacturing preferences.

C. LLNL Partnering Guidelines A resources on the LLNL website:

Provides examples of the laboratory business practices and licensing terms which are different

from those typically found in the private sector, including fairness of opportunity, small business

preference, and others.

D. How PNNL Can Help Your Business Succeed A brochure, targeted at industry, that:

Highlights PNNL capabilities and the various industry sectors where they have engaged

previously; and

Methods for engaging with the laboratory, including sponsored researcher (SPPs and ACTs),

collaborative researcher (CRADAs), licensing lab technologies, and facility usage.

6. Licensing Process

A. Stevenson-Wydler Royalty Use Contains excerpts from the Stevenson-Wydler Technology Innovation Act of 1980, Public Law 96-480 (15

U.S.C. 3701 et seq.), which:

15 USC 3710a(b)(5): Provides general direction on how to use or obligate royalties.

15 USC 3710c(a)(1)(B): provides the purposes for which royalties may be used or obligated at

the labs, including to reward the developers of the technology, further scientific exchange

amount the laboratories of the agency, education and training of employees, administration

expenses, furthering scientific research and development.

B. ANL DOE implementation of DEAR Contains excerpt from the ANL Prime Contract outlining the DOE implementation of DEAR 970.5227-3,

Technology Transfer Mission, related to the disposition of income:

Royalties or other income earned or retained are subject to Section 12(b)(5) of the Stevenson-

Wydler Technology Innovation Act of 1980, as amended (15 U.S.C. 3710a(b)(5)) and Chapter 38

of the Patent Laws (35 U.S.C. 200 et seq.) as amended.

The lab must include royalties and other income received in the annual Laboratory Institutional

Plan or other such annual document.

The lab must establish policy for making awards or sharing of royalties with Contractor

employees, other coinventors and coauthors, including Federal employee coinventors when

deemed appropriate by the contracting officer.

C. In the Public Interest: Nine Points to Consider in Licensing University Technology (2007) A document developed by leaders at 12 U.S. institutions that put forth guidance for consideration that

will “stretch the boundaries of conventional technology transfer practice.” The nine points for

consideration are:

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Universities should reserve the right to practice licensed inventions and to allow other non-

profit and governmental organizations to do so;

Exclusive licenses should be structured in a manner that encourages technology development

and use;

Strive to minimize the licensing of “future improvements”;

Universities should anticipate and help to manage technology transfer related conflicts of

interest;

Ensure broad access to research tools;

Enforcement action should be carefully considered;

Be mindful of export regulations;

Be mindful of the implications of working with patent aggregators; and

Consider including provisions that address unmet needs, such as those of neglected patient

populations or geographic areas, giving particular attention to improved therapeutics,

diagnostics and agricultural technologies for the developing world.

D. INL Licensing Process A document potential partners to inform them on the order of operations as well as potential snags

during the licensing process.

A flowchart identifies the seven steps to a licensing agreement with INL, 1) identify and qualify

the opportunity, 2) assess the need for a non-disclosure agreement, 3) negotiate terms, 4)

develop draft license agreement, 5) negotiate license language, 6) execute license, and 7)

manage commitment.

Discusses the timeline to license, including that negotiation of terms and license language is

often the longest step in the process.

Includes sample license agreements for both an exclusive and non-exclusive license.

E. NREL Licensing Process A website for potential partners that provides information on:

The step-by-step process to license NREL technologies, 1) identify and qualify opportunity, 2)

negotiate term sheet, 3) develop draft license agreement, 4) negotiate license language, 5)

execute license, and 6) manage commitment;

The NREL Candidate Questionnaire is linked on this website;

Agreement types, including exclusive patent license agreement, non-exclusive patent license

agreement, option agreement, express license agreement, and an energy license agreement,

with example agreements.

F. PNNL Licensing Process A graphic for potential licensees describing the overall process for agreements:

Flow chart from IP generation to close out, 1) qualifying the opportunity, 2) draft term sheet and

obtain license authorization, 3) negotiate license, 4) finalize agreement, 5) execute agreement,

7) administer agreement, and 8) close out agreement.

Chart indicates which actions only the lab takes part in, as well as those both parties are

involved.

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G. Sandia Licensing Principles (2015) A document describing Sandia’s licensing core values and principles:

Core values 1) serve the nation, 2) deliver with excellence, 3) respect each other, 4) act with

integrity, and 5) team for great results.

Decision making principles 1) maximizing US public good, 2) amplifying Sandia’s mission impact,

3) achieving successful commercialization, 4) treating all parties equitably, and 5) ensuring “win-

win” licenses.

Licensing principles 1) develop IP deployment plan, 2) identify and mitigate risks throughout the

licensing process, 3) select appropriate licensees and deal structure, and 4) manage license

effectively.

Licensing agreements will adhere to legislated and DOE requirements, M&O contract

requirements, and accepted industry benchmarks, including but not limited to milestones,

royalties, fees, and equity/phantom stock. Negotiation is a key part of the process.

H. LANL Licensing Technology A website for potential partners that provides information on:

The types of licenses agreements available at the laboratory, including the use of nonexclusive

and exclusive licenses;

Discusses financial considerations, including but not limited to, an issue fee, annual license fee,

and royalties.

I. Sandia Licensing Overview A website for partners describing licensing Sandia’s technologies:

Example licenses include commercial patent, commercial copyright, commercial hybrid, license

option, government use license, and test and evaluation;

Licensing practices are described, including the term, financial considerations, performance

requirements, limitations by field of use, and that commercial licensees must substantially

manufacture their product in the U.S., given the Department of Energy's intent to provide

benefit to the U.S. economy.

J. Licensing Berkeley Lab Technologies A website for potential partners that provides information on:

Berkeley’s goals in patent licensing; and

LBNL licensing practices, including 1) terms of the license, 2) license issue fee, running royalty,

and minimum annual royalties, 3) performance requirements, 4) exclusive and non-exclusive

licenses, 5) substantially manufacture the technology in the U.S., and 6) U.S. government

purposes only licenses.

K. PNNL Licensing Guidelines A website for potential partners that describes basic terms and conditions contained in PNNL’s licensing.

Definitions: Every license will have a section that defines terms that will be used throughout the

license.

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License Grant: This section defines the scope and nature of license rights granted by Battelle,

the most important of which is whether the license is exclusive or non-exclusive in the defined

field of use.

License Fee: A negotiated up-front license fee, in the form of cash and/or other considerations,

is identified.

Royalties: The royalty rate to be assessed on the royalty basis defined in the definitions section

is identified.

Diligence: All licenses incorporate some type of diligence that stem from Battelle's expectation

that the Licensee will actively develop/commercialize the licensed IP. They nearly always include

future minimum annual cash payments. Consequences for the Licensee's failure to meet

diligence range from Battelle's right to terminate the license to the right to convert it to a non-

exclusive license. The Licensee may terminate the license at any time with 60 days notice.

Sublicensing: Sublicensing rights (if any) and obligations are identified. The right to sublicense is

normally included in exclusive licenses and not included in non-exclusive licenses.

Reporting and Payments: The process and schedule for reporting royalties and making payments

is described.

Representations: No representations or warranties are provided that would cause either

Battelle or the Government to have any liability for anything (including third party patent

infringement issues) that may arise in the future related to the licensed intellectual property

rights

Termination: In licenses of patent rights, the terminal date of the license is normally set as the

date that the last patent licensed in the agreement expires or goes abandoned. Battelle cannot

terminate the agreement unless the Licensee is in default of its obligations, including failure to

meet minimum royalty requirements or milestones under the agreement.

Litigation: Responsibilities for identifying and pursuing infringers are identified. In exclusive

licenses, the majority of such responsibility falls on the Licensee.

Patents: Battelle reserves the right to file, prosecute and maintain Battelle's patent rights. The

share of the costs of these activities funded by the Licensee is negotiable, with the expectation

that this share is higher for exclusive licenses.

Records: The Licensee is expected to keep accurate records of operations affecting payments

under the license and Battelle has the right to inspect such records.

Publicity: Battelle's name cannot be used in publicity without obtaining written permission.

Marking: The Licensee is expected to place a mark on products embodying the licensed

patent(s) that is consistent with laws concerning the marking of patented articles.

L. NETL Sample License Application Contains an application for a license from NETL, for either an exclusive, partially exclusive, non-exclusive,

or non-exclusive research licensing agreement.

Required information includes 1) information regarding the applicant, 2) identification of

invention, 3) nature and type of applicant's business, 4) applicant's status, if applicable, as a

small business, 5) source of information concerning the availability for license of the invention,

6) detailed description of applicant's plan for development and/or marketing of the invention, 7)

identification of any licenses previously granted to applicant, 8) extent to which the invention is

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being practiced by private industry and/or Government, or is otherwise available commercially,

and 9) other information Applicant believes would support a determination to grant the license.

M. ANL Commercialization Plan Worksheet A worksheet for a potential licensee to complete to better enable the lab to assess the prospective

licensee and provides the lab input on its calculation of value of the intellectual property to both Parties.

Sections of the worksheet include:

General Company Information, including but not limited to company age, size and approximate

volume of company sales;

Product Licensing and Sales Information, including but not limited to license of interest, type of

license, desired duration, if additional R&D is necessary to further develop or complete the

product, testing required, new products that will be developed and the competing products for

the application or use and the advantages of the new products, prospective market and market

size, prospective sales, manufacturing capabilities for the new product, and licensing

consideration including up-front fee, running royalty rage, diligence on sales, milestones, time-

to-first sale, split up-front fees, service royalty rates, product listed in catalogue, etc; and

Equity Licensing Information, to be completed if equity is to be provided as part of the licensing

agreement, including but not limited to the company’s current products and sales volume,

current debt and cash on hand, valuation of stock, the prospect of ANL on the Board of

Directors, and the companies exit strategy.

N. NREL Candidate Questionnaire A worksheet for a potential licensee to complete to enables the lab to better understand potential

company’s commercialization process, including where they are at in the commercialization process,

inherent risks associated with the process, as well as how the company and lab will benefit if they

embark on the licensing process.

Company Information including but not limited to, technology of interest, type of license,

company’s management team and their commitment to commercializing this new product or

method based on NREL-developed technology, commercialization decision process and general

sense of milestones, marketing strategies regarding the size of markets, value proposition for

the business, strategy for sustaining a competitive advantage, exit strategy, company vision,

mission and key objectives, and authorized personnel for negotiation and execution of the

license;

Technology including but not limited to, the importance of the NREL IP to the company, R&D

needs and expectations, timeline for bringing this technology to the market, additional funding

for commercialization, including the use of government funds for R&D;

Value Proposition and Market including but not limited to the “value proposition” for the

product(s) or method utilizing the licensed NREL IP, market size, strategy for market

penetration, estimated market share, competition, customer trends, and customer needs; and

Financial including but not limited to any current litigation with the company, outstanding

personal or company judgments, financial constraints, and a meeting at NREL for the initial

discussion of business terms.

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O. ORNL License Application (2010) An application for a license from ORNL, for either an exclusive or nonexclusive license within a field of

use, and is required to be submitted before negotiations begin on terms of a license. Application

questions include, but are not limited to:

Company information including but not limited to contact information, any special

considerations, any foreign ownership, nature of the company, if the company principles or

other employees are current or former employees of UT-Battelle/ORNL, company’s

manufacturing capabilities and locations.

Technology information including but not limited to the IP the company wishes to licenses, the

type of license, how the company will use the technology, the products and/or services your

company would commercialize based on this technology, the competitive products or services in

the marketplace and how the licensed product(s) or service(s) compete against these

competitive items;

Financial information including but not limited to company’s anticipated total investment, in

both dollars and man-hours of effort, during each of the next 5 years and how the investments

will be funded, expectation of first commercial sale date, performance milestones, fees, royalty

rate, milestone payments, and equity stake in the company.

P. SRNL Licensing Guide A brochure describing the license application process at SRNL:

Phase 1: Intent to license. Includes 1) cover page, 2) proposal to license, 3) company information

Phase 2: Business Plan. Includes 1) market description, 2) marketing strategy, 3) pricing strategy,

4) product development, 5) implementation schedule, 6) production/service strategy, 7)

financial needs and projects, 8) sales projections and profit profile, 9) strategic position, and 10)

appendix.

7. License Execution

A. TTWG Licensing Guide (2012)

A guidebook developed by the TTWG on general licensing practices, including a sample license.

B. NREL Exclusive Patent License Agreement

A sample agreement from NREL for an exclusive patent license agreement.

C. NREL Nonexclusive Patent License Agreement

A sample agreement from NREL for a nonexclusive patent license agreement.

D. PNNL Exploratory License Agreement

A sample agreement for a 6-month option license with a $1,000 fee, executed by PNNL for

exploratory uses.

E. Pantex/Y-12 Start-Up Xpress Terms License Best Practice

Best practices for the Xpress Terms License (XTL) for start-ups with boiler plate, non-negotiable

license, granting exclusive rights in a field of use for an upfront fee of $1,000. CNS does not take

any equity in the company.

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The licensing terms are described in this best practices document including grants, sublicensing,

royalty sharing, patent reimbursement, minimum and running royalties, sublicensing

consideration, equity, and liquidation payout.

F. Inter-Institutional Agreement

A licensing agreement developed as a result of the IP Bundling Project, supported by the EERE

Lab Bridge program.

This agreement allows a potential licensee to license a suite of IP across various laboratories in

the DOE complex while only singing a single agreement, reducing the paperwork and burden for

both the licensors and licensee.

8. License Compliance

A. LLNL Progress Report: Before the First Commercial Sale

A form for licensees to complete on a bi-annual basis, reporting on progress to date, prior to the

first commercial sale.

Licensees are to provide information on work completed, dates milestones achieved, key

scientific discoveries, work in progress and work to be done.

B. LLNL Report of First Commercial Sale

A form for licensees to complete at the time of the first commercial sale.

Licensees are to provide information on date, plate, and description of licensed

products/methods sold or leased.

C. LLNL Quarterly Royalty Report: After the First Commercial Sale Non-Government Use

A form for licensees to complete on a quarterly basis, on the royalties due for that quarter, for

non-government use licenses.

Licensees are to provide information sales summary, total net sales, earned royalties and

royalties due with the report.

D. LLNL Quarterly Royalty Report: After the First Commercial Sale Government Use

A form for licensees to complete on a quarterly basis, on the royalties due for that quarter, for

government use licenses.

Licensees are to provide information country of sales, government contract number, place of

manufacturing, gross and net sales.

E. LLNL Semiannual Royalty Report: After the First Commercial Sale Non-Government Use

A form for licensees to complete on a biannual basis, on the royalties due for that half, for non-

government use licenses.

Licensees are to provide information country of sales, place of manufacturing, gross and net

sales.

F. LLNL Semiannual Royalty Report: After the First Commercial Sale Government Use

A form for licensees to complete on a biannual basis, on the royalties due for that half, for

government use licenses.

Page 15: DOE National Laboratory Patent Licensing Practices

Licensees are to provide information country of sales, government contract number, place of

manufacturing, gross and net sales.