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Start Up Terms
Licensing Requirements | Licensing Process | Conflict Management Policy | Licenses- Business Terms
Start-Up Company
Licensing Requirements 
The information below pertains to licensing University technology into a pre-funding or early stage company (“Start-Up Company”). This process follows the OTM’s internal technology screening process.
In these situations, the University requires adherence to the following:
- Start-up Licensing Process
- Conflict Management Policy
- At a minimum, the Standard Business Terms
The following steps will help to ensure that individuals are in compliance with University policy and will facilitate agreements between the Start-Up Company and the University.
I. Start-Up Licensing Process
1. The UIC Faculty, Staff, or Student notifies the UIC Office of Technology
Management (OTM) in writing of their wish to license University-owned
intellectual property to a Start-Up Company in which they have or will
have an interest.
2. OTM screens for existing agreements for the technology and reviews
OTM marketing plan to determine if the technology is available for
licensing
to the Start-Up Company
3. To show the OTM that the Start-Up Company is capable of commercializing
the technology, the Start-Up Company discloses:
- Immediate and future roles the Start-Up Company will take in commercializing UIC technology
- Start-Up Company’s funding requirements and how it will meet those requirements (including patent costs)
- Start-Up Company’s use of facilities, students, and/or other University resources and how those resources will be contracted for
- Where the research will take place
- Exit strategy and timing
4. The OTM reviews the information and determines whether the Start Up Company is the best means of commercializing the technology.
5. The Start-up Company incorporates or is already incorporated (SubS, LLC
or C-Corp.)
6. An option agreement is negotiated and executed between UIC OTM and the Start-Up
Company. An option provides time to the Start-Up Company to complete the following
items prior to the execution of a license agreement:
- Develop a business plan
- Recruit an initial management team
- Lease facilities
- Complete corporate documents (i.e., shareholder/membership agreements, term sheet, capitalization chart, etc.)
- Raise seed-round financing adequate to finance the Start-Up Company for the first year but at least 500k.
- Faculty completes a Conflict Management Plan with the University. (Note: Faculty must complete a Conflict Management Plan (CMP) and have it approved by University during the option period or provide evidence that their role with the Start-Up Company does not require a CMP. The CMP does not replace the Annual Report of Non-University Activities requirements.)
7. At anytime
before the end of option period assuming the above requirements are
fulfilled, a license agreement is
negotiated and executed between UIC
OTM and the Start-Up Company, in accordance with Section
III below. The license generally takes about a month to
negotiate, which includes
time for the start
up company to have equity documents drafted and reviewed
by
the
University, if applicable.
II. Conflict Management Policy
For all Start-Up activities, regardless of IP ownership, UIC Faculty
must complete a Conflict Management Plan (CMP). For those Start-Up activities
not involving
University IP or related to University employment, it is important that faculty/staff
inform their Department Head, as well as the UIC Conflict Officer of their
interest and intent. Please visit www.research.uic.edu/conflict, and click
on “Managing Conflicts.” Once a draft CMP is submitted, Rebecca
Lind, Conflict Officer, OVCR will assist in the final preparation and arrange
a Conflict Review Committee. This process takes approximately eight weeks.
For other related topics of interest, please see:
- Conflicts Policy at www.research.uic.edu/conflict/RNUA_2004/policy/index.shtml
- Allowable Activities (Sections E & F) at www.vpaa.uillinois.edu/policies/conflict_document.asp
III. Start-up Licenses- Business Terms
1. The following are required as part of a license agreement with UIC:
- All requirements under section I (6) above plus:
- Equity stake to the University of 20% of founder’s common stock or upfront payment equivalent;
- Employees waive distributions from equity owned by University;
- Upfront fee to be negotiated based on commercially acceptable business terms;
- Agreed-upon performance milestones related to regulatory objectives and/or commercial sale objectives based upon business plan;
- Minimum annual payment for exclusivity in territory which increases on planned date of commercialization;
- Payment of patent and all other out-of-pocket expenses incurred by the University in connection with the protection and licensing of the technology during the license period;
- Royalties as negotiated
- Licensee shall provide before January 30 of each year, a written report that updates the information contained in the most recent written report delivered to University under this agreement and projects activity toward commercialization of licensed products anticipated for the next reporting year;
- University shall be responsible for maintaining the patent applications and patents under the licensed patent rights; and
- Royalty
will be calculated on X% (to be negotiated) of net revenues, starting
after revenues are received based on use of the subject
technology.
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