Greetings from North Dakota State University!  Some of you have received
this message in a direct plea for information, after being specifically
identified by the Company in question.  I thought I would also post it to
the listserve and see what other helpful advice was out there!

I am working with an industry subsidiary, COMPANY X, on a Master Sponsored
Research Agreement.  Not surprising, we are having some difficulties on the
intellectual property sections.

COMPANY X is local and their CEO is a NDSU grad, so these negotiations are
rather sensitive/delicate.

We have offered COMPANY X a royalty-free, irrevocable, world-wide,
non-exclusive license to practice University inventions for internal
research purposes.  This is what we typically offer private industry.  They
are rejecting this and pointing to other institutions where they can "get a
better deal".

After rejecting our offer, they have come back and offered us two options:

1.  we give them a non-exclusive, royalty free license to reproduce, make,
have made, use, offer for sale and sell products that incorporate the
results of the research or derivatives

OR

2.  we sell them an exclusive license to reproduce, make, have made, use,
offer for sale and sell products that incorporate the results of the
research or derivatives for $5000.

We have provided them with info and explanations on Bayh-Dole (at least one
of the projects we are proposing they sponsor also has federal funds
included through partial support of a tech transfer trainee grad student),
the Tax Reform Act of 1986, and most recently a Revenue Proceeding
(#97-14).  We have tried to explain that these prohibit us from giving them
either of the options they are proposing, in part as we are a state
supported institution and have buildings built with tax-free bonds.  We
have also cited our internal policies and procedures.  We still have not
found a happy middle ground.

COMPANY X also wants to recover any patent fees and research costs, which
they say "other" institutions have permitted, although they did not
specifically identify those institutions.  We did agree to permit COMPANY X
to recover any expenses they pay for patenting an invention (but not
research costs), by permitting them a reduction on royalty negotiated in a
license agreement for up to five years, to encourage introduction and
commercialization.  Also, COMPANY X is paying full overhead on research
projects.

Does your institution ever accept terms like those proposed by COMPANY X?

If not under typical circumstances, are there any extenuating circumstances
under which you may? (I'm aware of at least one state that accepted these
terms due to the large amount of financial support that the industry
provided the public institutions in ways other than research dollars).

Any information you could provide would be greatly appreciated!  These
negotiations have been ongoing for some time now, and both parties are
anxious to get to the end, which hopefully results in a middle ground
instead of no agreement!

If you prefer that I call you and discuss personally, please let me know
and I would be more than happy to do so.

Thank you in advance for any information you can provide!!

Sincerely,
Valrey V. Kettner
Assistant Vice President
Sponsored Programs Administration
(701) 231-9608

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