Greetings from the North!

Quick question...we are negotiating a Master Agreement with a private
company.  On inventions by our faculty that the company has agreed to
file patent applications or to reimburse us for filing, we offered a
first option to negotiate an exclusive license, gave them 3 months to
elect to exercise their option and then 6 months to negotiate an
exclusive license.  We also agreed to extend the 6 months to
negotiate if necessary.

The company wants the first option to negotiate an exclusive OR
non-exclusive license, 6 months to elect to exercise their option,
and then 30 months to negotiate a license.  (Yes, it is 30 months...2
1/2 years...not a typo!)  They even want to be able to extend the 30
months to negotiate if necessary.

Other than the fact that this is contrary to standard practice, and
not a good business practice, it doesn't appear (at first glance) to
violate institutional policy.  Obviously we do not want to provide
what amounts to 3 years in essentially tieing up an invention.  Other
than just saying NO and walking away, what other arguments have you
used?  Can't help but wonder if the company wants to use the 30
months to do further R&D internally.

The company indicates they have sponsored research agreements with 1
other educational institution (that they won't name), and they
further indicate that they have been able to get this type of
arrangement with the other institution.  Their premise for asking for
this much time is that they don't want an invention that was funded
by their company to fall into the hands of their
competitors.  Earlier the company wanted to restrict who we could
negotiate license agreements with, again to retain their competitive advantage.

Has anyone out there agreed to terms that are this long, or does it
give you heartburn?  What sort of assurances (if any) have you been
able to provide private companies as to protecting inventions from
competitors?

As always, any and all advice is greatly appreciated!  If you want to
reply to me directly (xxxxxx@ndsu.edu) I will post a summary to
the listserve.

Thanks!

Val Kettner
Assistant Vice President
Sponsored Programs Administration
North Dakota State University
701-231-9608
xxxxxx@ndsu.edu

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