Washington University Office of Technology Management -- Inbound Research Materials from For-Profit Companies

Mailing Address:
660 S. Euclid Avenue
Campus Box 8013
St. Louis, MO 63110
(314) 747-0920
(314) 362-5872 (fax)

Street Address:
724 S. Euclid Avenue
Suite 2259
St. Louis, MO 63110

Why is it sometimes so difficult to get materials from a for-profit company?

Obtaining research materials from for-profit companies can be difficult because of the divergent missions distinguishing academic research from for-profit development. At the Office of Technology Management we do everything we can to facilitate this kind of transaction; however, we cannot compromise the educational mission of the University. Below are some of the issues we face:

We are generally not allowed — as a private university with a tax exempt status — to conduct for-profit research in Washington University labs. When for-profit companies request ownership of the inventions that "may" emerge from your work in exchange for receipt of their research materials, they are asking, in some cases, that the University put its tax exempt status at risk. Even if the probability of actual invention is estimated to be ".00000000001%," the promise to trade possible inventions in exchange for research materials puts the University tax exempt status at risk.

We may not grant a license to "anything" that "may" be invented.

We can:

Give a non-exclusive, royalty-free license to use inventions for non-commercial purposes (for example, internal research at the company).
We can offer an option or "first look" at anything that is eventually invented. (This can result in either an exclusive or non-exclusive license.)

The federal law that regulates this activity is IRS Tax Code Revenue Proceeding 97-14 which prevents the University from licensing technologies that are not yet in existence at the time of the agreement. Other tax code sections and regulations also apply.

For-profit companies are — and should be — as committed to meeting their obligations to shareholders as researchers at Washington University are to advancing science. Consequently, these companies make every effort to gain control of ideas that may benefit their owners. At OTM, we are committed to helping you develop these relationships with for-profit companies. However, we cannot compromise the University's core mission. The Intellectual Property Policy states:

"Agreements must conform with statutes and regulations. The terms of any agreement must be in conformance with applicable laws and regulations, including the tax code, to avoid jeopardizing the University's tax-exempt status. The terms of an agreement must not be in conflict with existing licensing or research agreements." http://www.wustl.edu/policies/intelprop.html#I (See Section II (2)(3)(e) Contracts).

Besides tax law ramifications, here are some other issues to consider:

The vast majority of companies with which OTM has dealings are staffed with consummate professionals who understand the rigors of basic research and the mission of the educational institution. In the few cases where companies seek to own "anything" that may be invented, two problems arise. First, if the company decides to refrain from commercializing your idea ("shelve" it), then you will not see the fruits of your labor in the market place. Secondly, it is legally possible that your capacity to conduct research in the very field that generated the idea may be compromised if the company restricts or controls your research in the future. The risks become even more significant if federal sponsors fund your laboratory.

The University encourages relationships with industry. The building of "bench to bench" communications between your lab and that of someone else in industry is a top priority for OTM. For-profit companies are filled with bright scientists who are trying to solve many of the same problems you are. Moreover, the "channels of commerce" are the best means we have to get your great ideas into the hands of people who can use them to make quality of life better for everyone. On the other hand, we must protect and build our academic research mission.

Notes

We understand that for-profit companies can be valuable sources of materials you can use to advance your research.
Please be aware, however, that obtaining research materials from for-profit companies can be quite complicated and poses some risks.
Washington University will give the for-profit company a research license and an option to transact a broader license after invention has occurred.

In the end, some MTAs can be as complicated as formal Research Agreements. We attempt to balance the need for academic freedom against the company's objective to maximize the financial position of its owners.