Swift Startup License Program

To promote innovation and entrepreneurship, KUIC is offering a simple, ready-to-use license agreement for start-up companies based on KU’s patented intellectual property. The Swift Startup License agreement has a back-end loaded deal structure with no upfront payments, no past patent costs, no annual minimum fees, no minimum royalties, one low flat patent royalty rate and a success fee at the time of an exit/liquidation event. This would allow start-up companies to invest time and effort in developing the KU technology.

The Swift Startup License program goal is to stimulate the creation of new companies by University of Kansas (KU) researchers as founders, by licensing KU inventions. To promote innovation and entrepreneurship, KU Innovation & Collaboration (KUIC) is offering a simple, ready-to-use license agreement for start-up companies based on KU’s patented intellectual property.

Summary of the Program

The Swift Startup License agreement (pdf) has a back-end loaded deal structure with no upfront payments, no past patent costs, no annual minimum fees, no minimum royalties, one low flat patent royalty rate and a success fee at the time of an exit/liquidation event. This would allow start-up companies to invest time and effort in developing the KU technology. The Swift Startup License will minimize contract negotiations enabling KU faculty and researchers to concentrate on the development of products. The Swift Startup License will be structured to make it more attractive to prospective investors. Following are the proposed general terms:

  • Exclusive license grant with rights to sublicense
  • No payment for past patent costs ($20,000 limit) - future patent costs to be paid by licensee
  • No upfront fees and no annual fees
  • Financial and diligence milestones based on a detailed business plan
  • No equity for KU A fixed 2% patent royalty rate on sales of any product(s)
  • No minimum annual royalty payments
  • A sliding sublicense revenue starting at 35% that steps down to 15% over five years
  • A 1% “success fee” when the company is acquired or goes public

 

Criteria for Qualification

Special attention has been given to streamline the process, reduce upfront legal costs and expedite the contract execution process by KUIC and Licensee. To qualify for this Swift Startup License you must meet the following criteria:

  • Employed at KU and a founder of a start-up based on a solely owned patent pending or patent KU intellectual property (IP) and an inventor of the IP
  • The IP is the basis for forming the new company
  • Graduated from Startup School@KU and iCorp@KU satisfying all requirements therein
  • Have a CEO (with relevant business experience; not the PI) and an assembled team of advisors committed to the start-up

Swift Startup License Approval Process

The following steps will need to be completed before a Swift Startup License (pdf) is executed:

  • Completing of SS@KU and providing deliverables of Startup School@KU to KUIC
    • POC application
  • Completing of and providing deliverables of iCorp@KU to KUIC
    • Team members
    • Business model canvas
    • Investor ready pitch deck
  • Completing conflict-of-interest [COIC] approval from the respective COIC committee. This process is independent of KUIC and is the responsibility of the faculty member.

Contacts and Communications

The primary and first point of contact for Swift Startup License (pdf) at KU is the KUIC Licensing Officer and at the company contact should be the CEO or his/her designate. The KU faculty member who is the founder of the company should not be the primary point of contact for the company.

Frequently Asked Questions

  1. Who qualifies for the Swift Startup License?
    If you are a KU employee, a founder of a Startup based on a patented (solely owned) KU intellectual property (IP) and an inventor on any such IP
  2. I am a KU employee and a co-founder but not an inventor on the IP. Will my company qualify for this license?
    No, you will not qualify (please refer to question 1).
  3. I am a KU employee, an inventor and a co-founder but the IP is jointly owned with another university. Will my company qualify for this license?
    Yes, but only if the third party is willing to accept the terms and conditions of the Swift Startup License.
  4. I am a KU employee and an inventor but not a co-founder. Will the company qualify for this license?
    No (please refer to question 1).
  5. I am a KU employee, an inventor and a co-founder of a company that has executed a license with KU previously. Can I re-negotiate the terms of the previous license?
    No, you will not be able to re-negotiate the terms of the previous license.
  6. What happens if an inventor wants to start a company but his fellow KU co-inventor(s) do not?
    The KU inventors will need to resolve this issue independent of KUIC. The formation of a KU startup should be agreed upon by all inventors.
  7. Who do I contact to discuss the Swift Startup License?
    Please refer to www.kuic.ku.edu for contact information for KUIC Licensing Officers. If you already work with a KUIC Licensing Officer, you can contact him/her directly.
  8. Is the Swift Startup License negotiable?
    No, the terms of the Swift Startup License are fixed and if not acceptable, a more detailed and time consuming exclusive license agreement template will be used.
  9. I have a few edits to the Swift Startup License; what do I do next?
    This agreement may not be edited. However, if there are specific concerns you may discuss it with KUIC. Please note that a request for additional edits will slow down the execution process because KUIC will need to involve the Office of the Vice Chancellor for Research & General Counsel to review and comment on any such edits.
  10. I have not completed Startup School@KU. Can I sign the Swift Startup License and complete Startup School@KU later?
    It is preferable to attend Startup School@KU prior to receiving Swift Startup License terms.  However, if the startup has a credible CEO and business plan the company can apply for a waiver.  The applicant’s business plan will be reviewed and a recommendation made regarding the viability of the company to obtain such a waiver.
  11. I am uncertain what the diligence milestones are at the current time point; can I provide them post-execution of the Swift Startup License?
    No, you will not qualify for the Swift Startup License. The diligence milestones will be addressed in Startup School@KU.
  12. What are the salient features of the Swift Startup License?
    In order to expedite and simplify the contract process and lessen the burden on startup companies, the Swift Startup License template (pdf) has a simple deal structure with one flat royalty rate, a low success fee at the time of liquidation/IPO (initial public offering), waiver on all past patent expenses, no upfront fees, no annual maintenance fees and no minimum annual royalties. However, the licensee will be responsible for all ongoing and future patent costs post-execution of the Swift Startup License. KUIC will be in control of the prosecution process but the licensee will be copied on all relevant correspondence and have time for comment.
  13. Will I be able to license copyrights, software or unpatented technology under this license?
    No. Under this license you are able to license only patented technology. A non-exclusive license to tangible research property and technical information is also included in the Swift Startup License to the extent that such a license is needed to practice the licensed patent rights.
  14. Why are the non-financial and financial diligence requirements important?
    The diligence requirements are critical checkpoints that ensure that the KU startup is working diligently towards commercializing the licensed technology. This metric can also be used to track and monitor the progress of the licensee throughout the term of the agreement. This licensing consideration is of paramount importance to KU.
  15. What is a Success Fee?
    Success Fee means the rate that will be used to calculate the amount that Licensee shall pay to KUIC upon a liquidation event or Initial Public Offering (IPO). The success fee rate for the Swift Startup License is 1%. Please note that this provision shall survive the termination or expiration of the Swift Startup License.
  16. Where can I find a copy of the Swift Startup License?
    To access the template, follow the Swift Startup License (pdf) links on the KUIC website.
  17. Are there scenarios where a Swift Startup License would not be appropriate to use with an otherwise qualifying start-up company?
    Yes. In addition to meeting the criteria for a Swift Startup License, examples where the terms of an Swift Startup License would not be appropriate may include license requests that involve
    (a) a patent application that has been filed as a non-provisional, PCT, or foreign filing;
    (b) multiple patent estates that could give rise to distinct product families;
    (c) 2 or more distinct patent families;
    (d) jointly owned intellectual property.