1. PRESENTED BY: ANGELA HODGE JULY 2010 The University of Texas at Austin Office of Technology Commercialization (OTC)

2. The mission of UT Austin is to achieve excellence in the interrelated areas of undergraduate education, graduate education, research, and public service.  UT Austin is a leader in research:  $596 million annual research revenues (FY09)  UT Austin Office of Technology Commercialization:  promotes and accelerates commercial investment in promising UT Austin technologies for the benefit of society and the world  establishes and maintains strategic relationships with industry to enhance UT Austin’s research enterprise and commercialization efforts  contributes to economic development in Texas and beyond  enhances UT Austin’s ability to attract and retain world-class faculty ©2010, Office of Technology Commercialization 2 THE UNIVERSITY OF TEXAS AT AUSTIN

3. Templates enable UT Austin OTC to maintain consistency and provide a starting point for negotiations  Patent License Agreement (PLA)  Patent and Technology License Agreement (PTLA)  Software License Agreement (SLA)  Inter-institutional Agreement (IIA) ©2010, Office of Technology Commercialization 3 Templates and Their Role at the University of Texas at Austin

4. Goal:  To implement efficient processes that increase collections and mandatory reporting Concerns:  Need adequate funding and manpower to be effective ©2010, Office of Technology Commercialization 4 Goals and Concerns

5. Licensing Compliance Process ©2010, Office of Technology Commercialization 3 rd Party Triage 3 rd Party Triage Synopsis of Active/inactive Licenses Synopsis of Active/inactive Licenses Legal & Financial Experts Legal & Financial Experts Contact Licensee Request Delinquent Reports Request Delinquent Reports Active or Terminated License Active or Terminated License 6

6. Options you may want to consider:  Third-party triage  Desk audits (intermittent, trained by outside vendor)  Payment Calendar (updated upon license, amendment, option execution)  Customized agreements database (W-I-P)  Request delinquent reports (quarterly) ©2010, Office of Technology Commercialization 6 What We Have Tried

7. Third-Party Triage (start of the process):  Outsourced license review of all active and inactive licenses to a firm with legal and financial expertise  Goal – identify status of entity, status of license, rights granted, breakdown of financial terms, reporting requirements, audit rights, and obtain current contact information ©2010, Office of Technology Commercialization 7 What We Have Tried

8. Steps include:  Correspond with licensees – reference agreement, reporting requirements, request updated contact information, and send blank royalty report and your payment information  Communicate a zero reporting requirement  Move licenses from inactive to either active or terminate and retrieve IP ©2010, Office of Technology Commercialization 8 Different Phases of the Process

9. Improvements include:  Billing for licensee fees and milestones – documented on Payment Calendar  Implemented an automated royalty report submission process using an e-signature program that is setup to sent reminders  Initiated a process for Inter-institutional Agreements and inventor assignments ©2010, Office of Technology Commercialization 9 Improvements to Process

10. Results include:  Frequency of reporting has increased  Number of payees has increased  More diverse royalty revenue stream ©2010, Office of Technology Commercialization 10 Results

11. Licensee compliance issues  Do you think licensee may be underreporting?  Enforce audit rights prior to expiration Based upon the amount of revenue received  Are the top licensees paying correctly? (Top 10%)  Due to cost of external audits, you must do a cost benefit analysis prior to engaging a firm Royalty monetization requests ©2010, Office of Technology Commercialization 11 Which License Agreements Should be Audited and Why

12. Before inking the deal – reviewing the document for potential future non-compliance issues:  Ensure the agreement TERMS enforceable?  Determine if you could you provide the requested information  Request QUARTERLY reports from all licensees whenever possible (my preference is zero reporting)  Stand firm with regard to obtaining your AUDIT RIGHTS After the deal is signed :  Just START even if the entire process is not completely mapped out  RECORD all potential payments in one repository  Contact your LICENSEES  Stay in touch with INVENTORS – often they can keep you informed about the industry  Conduct DESK AUDITS; review financial information from multiple sources  Resolve MANPOWER issues by hiring students (pay or college credit) & AUTOMATE your processes  Enforce your AUDIT RIGHTS ©2010, Office of Technology Commercialization 12 How to perform ongoing license reviews