The primary mission of the CDC is to improve human health by increasing scientific knowledge related to health and disease through the conduct and support of biomedical and behavioral research. In pursuit of its mission, CDC supports a broad spectrum of research approaches, ranging from basic laboratory research to clinical research. This continuum of research activities creates a synergism essential to the effective advancement of knowledge. The synergy that exists among these research approaches is dependent upon the ability of CDC investigators to discuss and explore new ideas freely and openly. The Federal Technology Transfer Act of 1986 (FTTA) and Executive Order No. 12591 codified the principle that US industrial competitiveness can be greatly enhanced if technology developed in Federal laboratories is commercialized. The FTTA authorizes and provides incentives for Federal laboratories to enter into collaborations with other Federal laboratories, state and local governments, universities, and the private sector. The CRADA is not a Federal contract, grant or Cooperative Agreement (as defined in 31 USC § 6303 et seq.). Rather, it is a unique agreement between a federal laboratory and a non-federal party for conducting specified research or development.
CRADAs are authorized only with collaborators who will make significant intellectual contributions to the research project undertaken or will contribute essential research materials or technical resources not otherwise reasonably available to CDC. CRADAs cannot attempt to direct or restrict research in a CDC laboratory. Sponsored research, such as routine, conventional testing, with no collaborative, intellectual contribution, is not appropriate for a CRADA.
Under the PHS CRADA, the CDC laboratory can provide personnel, services, facilities, equipment or other resources with or without reimbursement (but not funds to non-federal parties) and the other party can provide funds, personnel, services, facilities, equipment or other material and/or technical resources. Importantly, the CRADA provides the non-Federal party the option to negotiate an exclusive license to the resultant CRADA Subject Invention(s). The CRADA is the primary legal mechanism the Federal government has to convey such rights in advance of an invention.
The model CRADA and model Materials CRADA (M-CRADA) are standard documents developed by PHS to facilitate the negotiation and approval process and to incorporate PHS policies on collaborative agreements and technology transfer. The primary difference between the standard CRADA and the Materials CRADA is the level of CDC collaborative involvement with the non-Federal party. Typically, the Materials CRADA involves simply the transfer of proprietary material to the CDC laboratory where no collaboration is intended.
A Material Transfer Agreement (MTA) generally is utilized when any proprietary material is exchanged, when the receiving party intends to use it for his/her own research purposes, and when no research collaboration between scientists is planned. However, unlike a CRADA, neither a licensing option nor rights for commercial purposes may be granted under this type of agreement. MTAs define the terms and conditions under which the recipients of materials, provided by either the CDC scientist or the other party, may use the materials. Included in the MTA are provisions addressing confidentiality, data access and dissemination, publication, and the requirement that the material be used only for research purposes. The CDC also requires that that all materials received by their scientists originating from humans, be collected under 45 CFR 46, Protection of Human Subjects.
A standard CRADA generally is used when a collaborative R&D project between the CDC and a scientist from the private sector is contemplated; when the exchange of material and/or research and development collaboration takes place over a period of time; when staff or equipment is to be supplied by one or more parties; or when the private sector partner contributes funding or requests an exclusive licensing option. A Materials CRADA may also be appropriate when a company is providing an otherwise unavailable material to the CDC and requires an upfront option to an exclusive license.
- I want to use a technology for commercial purposes, but I don't foresee an actual collaboration between our company and PHS scientists. What agreement process do I use?
- What is a license?
- How do I obtain a license?
- How much will it cost to obtain a license?
- Can I obtain a world-wide license?
- Is a license necessary for unpatented Biological Materials?
- Is a license necessary to obtain Biological Materials for which a patent application is pending?
- What types of licenses are available?
- What is the process that the Technology Transfer Office (TTO) uses to decide when to file patents and license technology to companies?
- Who negotiates licenses for PHS inventions?
- How do I get an exclusive license?
- What are the criteria considered when TTO evaluates exclusive license applications?
- Do I have to submit a detailed development plan with my exclusive license application?
- Is public notice of my exclusive license application required?
- What terms are included in a license agreement with PHS?
I want to use a technology for commercial purposes, but I don't foresee an actual collaboration between our company and PHS scientists. What agreement process do I use?
If a company would like to acquire an unpatented material or a patented or patent-pending material for commercial purposes, a Commercial Evaluation License, a Biological Materials License, PTLA or an Exclusive/Nonexclusive Patent License is required. Please click here for an Overview of the Licensing Process.
A license is a legal agreement, subject to Federal, state, and local regulatory authorities, by which a patent owner promises not to take action to exclude the licensed party from making, using, or selling a potential invention. An exclusive license limits the use of the invention to a single group or entity, while a nonexclusive license allows for use by multiple concerns. A license may be for patented, or patent pending technology, or for unpatented biological materials.
If a company would like to acquire commercial rights to either an unpatented material or a patented or patent-pending material, a license is required. The first step in obtaining a license is to complete the license application form. The application is received by the CDC unit of the NIH OTT and docketed. The NIH OTT Licensing and Patenting Manager (LPM) reviews the application for completeness and, if the application is incomplete, requests additional information before beginning negotiations. After the application is complete, the license is negotiated between the company's representative and the NIH OTT LPM.
Licensing fees are determined based on the type of license awarded and its value in a commercial product development.
Usually, the licensing of inventions is granted on a worldwide basis although this is not required. Most biomedical companies, whether large or small, require worldwide patent protection to secure foreign markets or to use their assets in establishing strategic alliances with foreign companies who provide important foreign marketing expertise. When a PHS invention is licensed worldwide, a simultaneous transfer of both U.S. and foreign patent rights occurs so that the company can manufacture and market its products in commercially important production or marketing regions. Licenses are also granted on a country or regional basis. This strategy may be more appropriate for technologies where there is less interest from one company in developing a product for world markets.
If a company would like to acquire an unpatented material or a patented or patent-pending material for commercial purposes, a Commercial Evaluation License, a Biological Materials License, PTLA or an Exclusive/Nonexclusive Patent License is required.
If the materials being distributed are covered by a patent application filed on behalf of CDC or FDA, the recipient must negotiate a license through the CDC unit of the NIH OTT in order to be able to use the materials for commercial purposes.
Exclusive/Nonexclusive Patent License Agreement (PLA):
Commercial patent licenses can be exclusive or nonexclusive and allow commercialization of the technology, under appropriate circumstances, pursuant to applicable statutes and regulations.
Intellectual Property Not Covered by a Patent/Patent Application -- Biological Materials License:
A biological materials license is required and grants the right to make, use, and/or sell commercially useful biological materials for which patent protection will not be obtained. This type of license typically is nonexclusive and facilitates the commercial development of biological materials without requiring that patent protection be obtained for every material. The company and PHS scientists should work with the PHS agency Technology Development Coordinator (TDC) and the CDC unit of the NIH Office of Technology Transfer (OTT) first to determine whether a material can be licensed for either internal use or commercial purposes.
Commercial Evaluation License Agreement (CELA):
Commercial evaluation licenses grant the nonexclusive right to make and use the technology for the purpose of evaluating its commercial potential. The licenses are for a limited number of months, and do not grant the right to sell the technology. Companies are subsequently then required to obtain one of the licenses below for further use and development of a technology. CELAs are available for BMLAs, PTLAs, and PLAs.
Internal Use licenses grant the nonexclusive right to make and use, but not sell, the technology for an extended period of time. Typical internal uses include compound screening and use of animal models. These licenses have no "reach through˜ obligations to new products discovered during their use. Internal Commercial use Licenses are available for BMLAs, PLTA,s and PLAs.
What is the process that the CDC Technology Transfer Office (TTO) uses to decide when to file patents and license technology to companies?
A U.S. patent application must be filed prior to any public disclosure of an invention to preserve international patent rights and must be filed within one year of the official publication date or public use to preserve U.S. patent rights. After appropriate PHS Technology Development Coordinator (TDC) and TTO reviews of patentability and commercial marketability, a patent application is filed with the U.S. Patent and Trademark Office (PTO) by a contract attorney. The TTO is responsible for the supervision of patent prosecution and for ensuring that all information and material are forwarded to the PTO to assure that a patent may be awarded. Once the U.S. patent application is filed, TTO will update its preliminary marketability and patentability analysis and will provide, within 12 months, a recommendation to the PHS agency regarding international filing. In general, where international filing is possible and one can reasonably anticipate commercial interest, TTO recommends at least preliminary filing under the Patent Cooperation Treaty 12 months after the U.S. filing date, to preserve international rights for an additional 18 months at modest cost. Upon PHS agency determination to exercise international patent rights, the contract attorney arranges for international patent prosecution. In parallel with the filing of a patent application, TTO reviews the invention and its commercial potential, develops a licensing approach, and identifies potential companies to commercialize the invention. This is coordinated by the in whose marketing portfolio the invention fits, and is a collaborative process requiring input from the inventors, and the TDC. After formally advertising for potential licensees and promoting the technology to companies, the CDC unit of the NIH OTT receives an application for a license. The CDC unit of the NIH OTT reviews the application, with input from the involved PHS agency when an exclusive license is proposed, to ensure that the proposed exclusivity is consistent with ongoing research activities. The CDC unit of the NIH OTT then negotiates the terms of the license, and administers the license.
The CDC unit of the NIH OTT negotiates licenses for CDC inventions. This includes CRADA-subject inventions and licenses for technology developed by CDC intramural scientists.
While Government regulations reflect a preference for nonexclusive licenses, exclusive licenses are available when appropriate to promote successful commercial development of a licensed invention. To obtain an exclusive license a company must complete a license application and submit the application to the CDC unit of the NIH OTT. Upon receipt of an exclusive license application, the CDC unit of the NIH OTT evaluates the license application using a number of criteria to determine if an exclusive license is warranted (see, 37 CFR §404.7). If the CDC unit of the NIH OTT determines an exclusive license is warranted after review of the application a notice of intent to grant the license is published in the Federal Register for a period of time, generally 30 days, unless the application is for an invention developed under a CRADA. During this time the public may object to the grant of the license. After the notice and comment period closes the CDC unit of the NIH OTT makes a final decision regarding the grant of the exclusive license.
What are the criteria considered when the CDC unit of the NIH OTT evaluates exclusive license applications?
The criteria the CDC unit of the NIH OTT uses when evaluating an exclusive license application are based on the requirements set forth in 37 CFR §404.7. These criteria include whether:
- 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 risk capital to bring the invention to practical application.
- Exclusive license terms and conditions are not broader than necessary.
- Exclusive licensing will not lessen competition.
Applicants seeking an exclusive license are required to submit a detailed justification addressing each of these criteria as well as a complete business development plan.
Notice of a proposed exclusive license (other than those resulting from a CRADA) is required by law. Notice will be published in the Federal Register, to provide an opportunity for public comment. The public comments generally must be received within 30 days from the publication date of the Federal Register notice of intent to grant an exclusive license. Any such comments will be evaluated, and a final decision will be made as to whether or not an exclusive license is warranted.
PHS 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 TTO works closely with licensees to monitor performance and to adjust benchmarks, when appropriate, to ensure successful commercial development of CDC inventions. Licensees are required to report at least annually on their utilization of, or efforts to utilize, licensed patent rights. These reports are kept confidential, by law. The license is revocable for specific reasons, such as non-use of the patent or failure to comply with governing regulations or to satisfy public health needs.