Non-Profit License Agreement - Summary


CHALLENGE: Non-profit institutions, such as non-government organizations (NGOs) and product development partnerships (PDPs), play an increasing role in developing new products to diagnose, treat or prevent disease in low income regions of the world. Federal laboratories and NIH-funded institutions are an important source of innovative technologies that non-profits license to bring such products to the people most in need, usually through sale at marginal cost or donation programs funded by governments and foundations. Prior to the current decentralized HHS patenting and licensing model, the NIH Office of Technology Transfer (OTT) had been successful in licensing to non-profits technologies such as an FDA protein conjugation technology developed by PATH as MenAfriVac® (a lifesaving meningitis vaccine for sub-Saharan Africa) and NIH technologies utilized in vaccines for dengue and typhoid, currently in clinical trials. However, non-profits still have to negotiate terms for each agreement, which is time consuming and unpredictable. Non-profits may have concerns that the licensor will not be flexible in structuring licenses for the challenges faced by non-profits in this market niche. Currently, this program is administered by the appropriate HHS Agency where the invention was created.

SOLUTION: The NIH Model Non-Profit License Agreement is available for patented inventions and non-patented biological materials from NIH and CDC intramural laboratories. The available license scope includes vaccines, drugs, therapeutics and diagnostics (or enabling technologies to produce such products) to prevent, diagnose or treat neglected tropical diseases (“NTDs”, as defined by WHO), HIV, TB and malaria in humans or animals. Other technologies will be considered on a case-by-case basis. The Agreement establishes reasonable terms, including patent cost reimbursement and royalties that would be acceptable to most non-profit institutions. The license is available to non-profits with a demonstrated commitment to diligence in providing broad global access to technologies, products and services consistent with the submission of an acceptable product development plan to bring the technology to practical application.

TERMS: The model license has a $2,000 up front fee and modest royalties on sales of 1.5% for exclusive licenses and 0.75% for non-exclusive licenses, excluding sales to public sector institutions or institutions using public-sector funds (such as PEPFAR or Global Fund). If the licensee sublicenses the technology to another institution to bring it to market, the sublicense fee for exclusive licenses will be 15% of the value received if NIH or FDA has provided in vivo model data and 10% if such data have not been provided. For non-exclusive licenses, the sublicensing fees are half these amounts. If the licensee has to pay royalties to other parties for the same product, 50% of those costs can be deducted from the NIH royalties. See Term Sheet for full details of the offered agreement.