Types Of Licenses Available

If the invention desired by the company for commercial purposes is claimed in a patent or patent application owned by the U.S. Government the company must negotiate one of the following:

• Commercial Evaluation Licenses - grants the nonexclusive right to make and use the technology for the purpose of evaluating its commercial potential. The license is for a limited number of months and does not grant the right to sell or otherwise distribute the invention. Companies are required to obtain a commercial Patent license for further use and/or development of the invention.
  
• Internal Commercial Use Licenses - grants a licensee the nonexclusive right to make and use the invention for internal use only. These licenses do not grant the right to sell or otherwise distribute the invention, but allow the licensee to use the invention in their commercial development activities.
  
• Nonexclusive and Exclusive Patent Licenses - allows a company to commercialize the invention, under appropriate circumstances pursuant to applicable statutes and regulations. An exclusive license limits the use of the Invention to a single group or entity while a non-exclusive license allows use by multiple concerns

If the invention desired by the company for commercial purposes is not claimed in a patent or patent application owned by the U.S. Government the company must negotiate a Biological Materials License which allow a Company to make, use and /or sell commercially useful biological material, which are not in the public domain and for which patent protection cannot or will not be obtained. This type of license typically is nonexclusive and facilitates the commercial development of biological materials developed in PHS laboratories without requiring that patent protection be obtained for every material

How To Obtain A License

A company that desires a license to develop a PHS invention must complete and submit to the OTT an Application For License To Public Health Service Inventions. This application forms the primary basis for licensing decisions and provides the OTT with information about the potential licensee, the type of license desired, and the proposed development, marketing, and distribution strategy of the licensee. Also, if the applicant desires exclusivity, the completed application provides the OTT with the applicant's justification for an exclusive license.

After reviewing the license application, the OTT, in consultation with the IC that sponsored the research, determines if the applicant's proposal is consistent with the licensing strategy developed for the invention and whether the grant of the license would benefit the public and be consistent with the interests of the Federal government. If the applicant has requested a nonexclusive license and a favorable review of the application is given by the OTT, negotiations will generally begin within short order.
Request for exclusive or partially exclusive licenses require a 30 to 60 day notice be published in the Federal Register. Followingthe required posted time, OTT will evaluate the application and all comments received from the public to make a final determination regarding the license. The criteria to be considered in evaluating exclusive license applications (37 CFR 404.7) include:

• Does exclusive licensing serves the best interests of the public,
• Practical application of the invention is not likely to be achieved under a nonexclusive license.
• An exclusive or partially exclusive license is a reasonable and necessary incentive to promote the investment of business capital expenditure by a company to develop the invention into a commercially viable product.
• Exclusive or partially exclusive license terms and conditions are not broader than necessary
• Exclusive licensing will not lessen competition.

Terms Included In The License

The OTT has developed several model license agreements that serve as the basis for license negotiation. The business development plan submitted as part of the license application process serves as the basis for establishing performance benchmarks that are included in the license agreement. The OTT works closely with licensees to monitor performance and to adjust benchmarks, when appropriate, to ensure the successful commercial development of PHS inventions.
Licenses are required to respond at least annually on their utilization of or efforts to utilize license patent rights. These responses are kept confidential and, to the extent permitted by law, are exempt from disclosure under the Freedom of Information Act (5 U.S.C. §.552).