The Quick Start initiative is a simplified process that will allow faculty to focus on the development and commercialization of products and is meant to streamline the contract negotiation process. The Quick Start License is also designed make university startups more attractive to potential investors and should increase the success of the university startups.
Quick Start License General Terms:
- An exclusive license with right to sublicense
- No payment for past patent costs, future patent costs to be paid by Licensee
- No upfront, annual or milestone fees
- Financial and diligence performance milestones based on a detailed business plan
- No equity for Washington University
- A fixed 2% patent royalty rate on sales of any product(s)
- No minimum annual royalty payments
- A sliding sublicense revenue starting at 15% that steps down to 5% over five years
- A 0.95% “success fee” at an exit event of the company
WashU faculty and employees (graduate students, post-docs and staff) who are creators of an invention and have interest in obtaining a license from OTM for their startup company can start the process by contacting OTM Staff.
What are next steps if you do not qualify for a Quick Start License?
When a company does not meet the requirements for a Quick Start License, WashU will negotiate an exclusive license agreement. The terms and conditions of an exclusive license agreement will be negotiated by both parties, and will vary depending on the nature of technology, stage of development, ownership, etc. Typically, an exclusive license agreement will be considered, if the license includes:
- Multiple intellectual property (IP) assets: patented and non-patented assets, copyrights, software, tangible research materials etc.
- Copyright and/or software assets
- Mature IP Asset: non-provisional filing, PCT application, foreign filing
- Jointly owned IP asset
Considerations under an exclusive license agreement:
- Patent and non-patent royalties
- Patent costs: licensee will be responsible for past, ongoing and future patent expenses
- Upfront payments, milestone payments, license maintenance fees
- Diligence: technical and financing milestones
- Business plan
- License grant: exclusive license to patent rights and a non-exclusive license to tangible research property, technical information, software etc.
In an effort to spur innovation and entrepreneurship efforts in the St. Louis region; WashU OTM is offering a simple, ready-to-use license agreement for start-up companies based on the university’s patented intellectual property. The license agreement has been vetted by local community leaders, venture capitalists, contract attorneys to arrive at terms and conditions that are deemed fair and reasonable to WashU and the startup company.
The Quick Start License has a back-end loaded deal structure with no upfront payments, no past patent costs, no annual minimum fees, no minimum royalties, one low flat patent royalty rate and a success fee at the time of an exit/liquidation event. This would allow start-up companies to invest time and effort in developing the university technology.
The primary objective is to streamline the contract execution process for both parties in an effort to reduce the ensuing legal costs and increase deal flow. In order to qualify for this license the below mentioned terms and conditions should be met:
- You are a WashU employee, a founder of a start-up based on a solely owned patented WashU intellectual property (WashU IP) and an inventor on any such WashU IP
- The patented WashU IP is the basis for forming the new company
- A detailed business plan is provided to the OTM business manager handling the specific patented technology
- A CEO (preferably a person with experience and not the PI) and an experienced management team with a proven track record is in place to lead the commercialization of the licensed WashU IP
Quick Start License Approval Process
The use of Quick Start license is contingent upon the submission of a business plan and approval by OTM. Once you have identified the WashU IP you are interested in licensing, please contact OTM. If you do not have an OTM business manager, please email email@example.com to have one assigned to you.
Please be prepared to submit the following documents to OTM:
- Detailed business plan.
- As a WashU employee and company co-founder you may need to obtain a separate conflict-of-interest approval from the CIRC. This process is independent of OTM and you are responsible for initiating and completing this process.
- The Quick Start license will be executed only upon completion of the COI approvals.
All startup companies must submit a business plan to qualify for the Quick Start License. The plan must be written by the team (CEO, CBO, key leaders) who will be leading the company with help from consultants/advisors. The business plan serves as a blueprint outlining the company’s vision for the university technology and the commercialization pathway it intends to adopt. This is the centerpiece of the start-up enterprise and therefore utmost care and diligence must be taken in drafting this document and coming up with meaningful diligence milestones. The OTM business manager will contact you if there are additional questions/concerns. The execution of the Quick Start license is contingent upon satisfying any concerns/questions that may arise upon internal review of the Business Plan. While every attempt will be made to work with the start-up to ensure that it qualifies for the Quick Start license, WashU OTM will determine whether or not a start-up company qualifies for the Quick Start license.
- Company information
- Name of company, address, nature/type of the company organization, and articles of incorporation.
- Name of CEO and founding members and defined roles, number of employees: bio data and role of each individual (employee/consultants/advisors etc.)
- Names of the members of the Board of Directors
- Start-up governance and ownership
- Funding status
- current investors -level of funding provided by each investor, background /track record for each investor
- available funds and projected burn rate
- timeline for fund raising efforts
- financing objectives and plans, valuations
- company pro-forma financials
- R&D development timeline
- include detailed timelines and research and development (R&D) timeline, e.g. therapeutic — IND, Phase I, II, III, NDA filing timelines
- provide diligence milestones in order to arrive at a go/no go decision with respect to the licensed WUSTL IP
- operating plans for R&D
- required partnerships or alliances needed for milestones
- Target market
- Details regarding at least one lead indication/target market
- prevalence, incidence
- unmet need
- target market size : penetration rate, 3-5 year net sales forecast
- projected selling price, gross margins
- Details regarding at least one lead indication/target market
- Marketing strategy
- primary markets
- distribution channels
- potential partners
- competitors: clearly outline the unique selling proposition (product/ service) , potential risks, market entry strategy, SWOT analysis
Contacts & Communications
The primary and first point of contact for Quick Start license at WashU is the OTM business manager and at the company contact should be the CEO or his/her designate. The WashU faculty member who is the founder of the company should not be the primary point of contact for the company.
Frequently Asked Questions
1. Who qualifies for the Quick Start License?
If you are a WashU employee, a founder of a startup based on a patented (solely owned) Washington University intellectual property (WashU IP) and an inventor on any such WashU IP.
2. I am a WashU employee and a co-founder but not an inventor on the WashU IP. Will my company qualify for this license?
No, you will not qualify (please refer to question 1).
3. I am a WashU employee, an inventor and a co-founder but the WashU IP is jointly owned with another university. Will my company qualify for this license?
Yes, but only if the third party is willing to accept the terms and conditions of the Quick Start License.
4. I am a WashU employee and an inventor but not a co-founder. Will the company qualify for this license?
No (please refer to question 1)
5. I am a WashU employee, an inventor and a co-founder of a company that has executed a license with Washington University previously. Can I re-negotiate the terms of the previous license?
No, you will not be able to re-negotiate the terms of the previous license.
6. What happens if an inventor wants to start a company but his fellow WashU co-inventor(s) do not?
The Washington University inventors will need to resolve this issue independent of OTM. The formation of a Washington University start up should be agreed upon by all inventors.
7. Who do I contact to discuss the Quick Start License?
Please email firstname.lastname@example.org and you will be connected to the appropriate business manager.
8. Is the Quick Start License negotiable?
No, the terms of the Quick Start License are fixed and if not acceptable, a more detailed and time consuming exclusive license agreement template will be used.
9. I have a few edits to the Quick Start License; what do I do next?
This agreement is intended to not require edits. However, if there are specific concerns you may discuss it with your OTM business manager. Please note that a request for additional edits will slow down the execution process because OTM will need to involve the Office of the Executive Vice Chancellor & General Counsel to review and comment on any such edits.
10. I do not have a business plan, can I sign the Quick Start License and submit the business plan later?
11. I am uncertain what the diligence milestones are at the current time point; can I provide them post-execution of the Quick Start License?
No, you will not qualify for the Quick Start License. The diligence milestones should be part of your business plan.
12. What are the salient features of the Quick Start License?
In order to expedite and simplify the contract process and lessen the burden on startup companies, the Quick Start License template has a simple deal structure with one flat royalty rate, a low success fee at the time of liquidation/IPO (initial public offering), waiver on all past patent expenses, no upfront fees, no annual maintenance fees and no minimum annual royalties. However, the licensee will be responsible for all ongoing and future patent costs post-execution of the Quick Start License. Washington University will be in control of the prosecution process but the licensee will be copied on all relevant correspondence and have time for comment.
13. Will I be able to license copyrights, software or unpatented technology under this license?
No. Under this license you are able to license only patented technology. A non-exclusive license to tangible research property and technical information is also included in the Quick Start License to the extent that such a license is needed to practice the licensed patent rights.
14. Why are the non-financial and financial diligence requirements important?
The diligence requirements are critical checkpoints that ensure that the WashU startup is working diligently towards commercializing the licensed technology. This metric can also be used to track and monitor the progress of the licensee throughout the term of the agreement. This licensing consideration is of paramount importance to the university.
15. What is a Success Fee?
Success Fee means the rate that will be used to calculate the amount that Licensee shall pay to Washington University upon a liquidation event or Initial Public Offering (IPO). The success fee rate for the Quick Start License is 0.95%. Please note that this provision shall survive the termination or expiration following the 5 year anniversary of the Quick Start License.
16. What other approvals are required for the Quick Start License?
OTM will confirm that appropriate conflict of interest approvals are obtained prior to the execution of the Quick Start License. If the company is located outside of the United States, OTM may need to obtain an export control waiver.
17. Are there scenarios where a quick start license would not be appropriate to use with an otherwise qualifying start-up company?
Yes. In addition to meeting the described criteria for a quick start license, examples where the terms of a quick start license would not be appropriate may include license requests that involve
(a) a patent application that has been filed as a non-provisional, PCT, or foreign filing;
(b) multiple patent estates that could give rise to distinct product families;
(c) 2 or more distinct patent families;
(d) jointly owned intellectual property.