A Guide for Inventors at INL — 2017 19 Licensing Once INL has identified commercialization partners, the next step is to license the invention. Licenses grant some of INL’s rights as the owner of IP (licensor) to a company (licensee) that has agreed to certain obligations and responsibilities to commer- cialize the IP. INL licenses IP to companies that demonstrate the capability and commitment to develop the early-stage innova- tions into commercial products. Sometimes both the inventors and INL agree that the best entity to bring a technology to market is a startup company. Whether the licensee is an existing company or a startup, they demonstrate commitment by providing a written technology development plan to INL. This plan includes, at a minimum, a description of the technologies to be licensed, the resulting product, market analysis, a product development timeline, and the company resources committed to development. The terms of the license are negotiated based on the licensee’s plan. After a technology is licensed, TD manages the license to ensure adherence to all terms and conditions and that the technology reaches its fullest potential. If the licensee does not comply, steps may be taken to terminate the license, in which case the inven- tion would be available for licensing to another company. License negotiations The licensing process begins with negotiations with interested industry partners, including startup companies, in which term sheets summarizing the essential business conditions of the licensing agreement are exchanged. The types of business terms generally addressed include the scope of the license rights, the license fee, sublicense rights, minimum royalties, patent reim- bursement and performance milestones. Scope of License Rights License rights such as exclusive, nonexclusive, field of use and territory are established commensurate with the licensee’s product development plans and the market. INL’s licensing objective is to obtain widespread use of its technologies. License Fee Together with the royalties and other monetary terms, the value of the license fee depends on the scope of the license rights and the market value of the technology licensed. Royalties are paid by the licensee when products or services that require the use of the technology are sold. Royalties can be expressed as a percentage of sales or a fee per selling unit. Royalty rates vary according to the industry, the significance of the invention and the base upon which the royalty is applied (e.g., unit, component, subsystem). Common Licensing Questions What is the inventor’s role in licensing? Licensing is the primary function ofTD, and inventors will be informed of progress. Inventors are often closely connected to others in their field and may be consulted by their CM on the business terms of the license. Further, the inventor’s role in licensing is an extension of their role in marketing, since their expertise is important to transfer the technology and related know-how to the licensee.The INL license places only nominal obligations on the inventor to assist in the transfer of the licensed technology.When more than minimal time and effort is necessary, the licensee will negotiate a separate consulting arrangement with the inventor. Can there be more than one license? An invention can be licensed to multiple licensees, either nonexclusively to several companies or by only licensing a unique field-of-use (application) or geography defined rights exclusively to several companies. How are licensees chosen? Businesses are chosen for licensing based on their abilities to commercialize the technology for public benefit. Defining license agreement: a contract (typically in writing) that describes the rights and responsibilities related to the use and exploitation of intellectual property