The OTC process describes how the University handles inventions disclosed by its researchers and is comprised of many steps, the essential elements of which are summarized below.
This step encompasses the formal disclosure to the University by the inventors of a new invention that is rightly owned (or jointly owned) by the University. (For a discussion of when the rights to an invention belong to the University, please see the UT Dallas Intellectual Property Policy). This formal disclosure is made through the completion of our Techonology Disclosure Form.
Upon submission of the completed Disclosure Form, the OTC will do some or all of the following, as appropriate:
If our analysis indicates that the invention has sufficient commercial potential, we will begin the commercialization process outlined below:
File Patent Application - OTC does not file patent applications for all invention disclosures it receives due to the high cost of filing ($6,000 - $10,000). It is desirable to have an interested potential licensee before committing to patent filing. However, in some cases, the commercial potential may justify filing even if no potential licensee has yet been identified. The filing and prosecution of patent applications are done by outside patent attorney firms.
For more information on intellectual property and patent filing and prosecution, please see the Intellectual Property Primer. The patent counsel will ask the inventor(s) for detailed information about the invention, both written and verbal, to strengthen the patent application.
License to Established Company - If the commercialization strategy involves seeking a license with an existing company, the OTC will either market the invention to such a company or elect to use a third party to assist in marketing the invention. Inventors often identify potential licensees. After a potential licensee evaluates a UT Dallas invention and expresses interest in licensing it, OTC will prepare a license proposal for the company's consideration. Potential licensees, as well as the terms of proposed license agreements, will be discussed with the inventors prior to execution.
Negotiations may require flexibility and creativity by both parties in order to arrive at a mutually satisfactory agreement. For example, startup companies typically are not in a position to pay large upfront payment and therefore, typically, equity in the company serves as consideration along with future royalty or other payments once products are on the market. If t he technology is successfully licensed, the inventors and the University will share any royalties in accordance with UT Dallas's Intellectual Property Policy; that is, royalty payments are collected by the OTC and distributed at the end of UT Dallas's fiscal year (Aug. 31) one-half to UT Dallas and one-half to the inventors as a group.
Prior to licensing, the inventors will be given the opportunity to come to an agreement amongst themselves as to how the inventor's share of the royalties are to be divided among them. Barring an agreement, the OTC will distribute the inventor's share as it sees fit; typically equally among the inventors. It should be noted that the UT System's Regents Rules on transfer of intellectual property establish that equity consideration owned by the University is not shared with the UT inventor(s), although the inventors may independently own equity consideration which similarly is not shared with the University. (See Policies and Guidelines).
Establish Startup Company - In certain situations, if a UT Dallas invention appears to be exceptionally strong commercially, OTC may recommend that a new company be formed to commercialize it. OTC, in collaboration with UT Dallas's Institute of Innovation and Entrepreneurship, has the staff, resources and capability to proactively assist in the formation and launch of a new enterprise, should such assistance be desired by the inventor(s). For more information regarding the creation of new enterprises, see Start-Up Ventures.
If analysis indicates that the technology appears to have limited commercial potential, or if OTC has been unable, after a reasonable period of time, to successfully commercialize the technology as planned, the University will decide to expend no further resources on it, and may offer to return it to the inventor(s), either through a Release, or through a License, depending on factors such as research sponsorship and plans for continued research.
Release - If the technology is released, title (that is, ownership) of the technology is given to the inventors in exchange for recovery of any patent costs already paid by the University and a nominal royalty based on a percentage of revenue, above a threshold amount. Releasing the technology can be used if the invention was not a result of Government-sponsored research, and if no further research is planned.
License - If the technology is licensed, the University continues to own the technology, but the inventors have a license to use the technology (including sublicensing it), typically for the life of any patents involved, in exchange for recovery of patent costs (if any) and a share of future revenues. Technology typically must be licensed to the inventor(s) (rather than released) if the technology was developed using Government funding or if further research is planned using UT Dallas resources.