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United States Department of Agriculture

Agricultural Research Service

License Application
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HOW TO APPLY FOR A PATENT LICENSE

BACKGROUND

The USDA patent licensing program grants patent licenses to qualified businesses and individuals who wish to commercialize inventions resulting from federally supported research performed at USDA laboratories and research locations. The objective of the program is to use the patent system to promote the utilization of such inventions so that their benefits are available to the public on reasonable terms.

The licensing of federally-owned inventions must be done in accordance with the terms, conditions and procedures prescribed under 37 CFR Part 404. A copy of these regulations can be supplied upon request from the USDA/Office of Technology Transfer for reference. Application for a license must be addressed to the Federal agency having custody of the invention. A license may be granted by the Federal agency only if the license applicant has supplied the agency with a satisfactory plan for the development and marketing of the invention and has provided evidence of capability and intention to fulfill the submitted plan.

37 CFR 404.8 sets forth the information which must be provided by a license applicant. For the convenience of the applicant, USDA has itemized the information needed on a Patent/License Application Form.  Click here to download a generic form in pdf format.  The information submitted is used to determine whether the applicant has both a complete and sufficient plan for developing and marketing the invention and has the necessary manufacturing, marketing, financial and technical resources to carry out the submitted plan. Under the provisions of 37 CFR 404.14, any plan submitted by a license applicant may be treated as privileged and confidential and not subject to disclosure under 5 U.S.C. 552 (Freedom of Information Act).

HOW TO OBTAIN INFORMATION ABOUT APPLYING FOR A LICENSE

The USDA technology licensing program is administered by the Agricultural Research Service (ARS), Office of Technology Transfer (OTT). All members of OTT can provide general information regarding the licensing program. All Patent License Applications downloaded electronically from the OTT Home Page should be forwarded to:

Coordinator, Technology Licensing Program
USDA, Agricultural Research Service
Office of Technology Transfer
5601 Sunnyside Avenue Beltsville, MD 20705-5131
Phone: (301) 504-5989
Fax: (301) 504-5060

The Technology Licensing Program Office is happy to answer any questions concerning the license application process, how to complete the license application form and license agreement terms

INSTRUCTIONS FOR COMPLETING PATENT/LICENSE FORM

The on-line Patent License Application form is provided for your convenience by the Office of Technology Transfer. If you prefer, you may answer the questions on sheets of letter size plain paper and attach these to the Patent License Application form. Please be sure to identify your responses by item number. Whether you use the form or separate sheets for your responses, the license application must be signed and dated by an authorized company representative.

The purpose of the form is to provide a format for the submission of information regarding the research and analysis already completed by the license applicant in the process of making a business decision to invest in the development and marketing of a federally owned invention. The USDA recognizes that all inventions and business plans are unique and that the amount of research and analysis required for a specific project will vary. Itemized instructions for completing the form are provided below.

Items 1, 2, 3 and 4 - These items are for the purpose of identifying the federally owned invention which is the subject of the license application. Please complete either item 1, item 2 or item 4, as appropriate. If you complete item 2, please include the issue date of the patent under item 3.

Item 5 - Indicate whether applicant is applying for an exclusive or nonexclusive license. The term of most licenses is the life of the patent rights.

Item 6 - Provide the title of the patent or patent application to be licensed.

Item 7 - Identify the individual, publication or other source of information concerning the availability for licensing of the identified invention. In many cases, the appropriate response will be "ARS, Office of Technology Transfer."

Item 8 - Provide the complete name and address of the business or individual applying for a license.

Item 9 - If different from the response to Item 8, provide the complete name and address of the appropriate contact person for all license discussions.

Item 10 - Provide the state of incorporation for a business applicant or the state of citizenship for an individual applicant.

Item 11 - Provide a telephone number and, if possible, a fax number for the contact person identified under item 9.

Item 12 - Provide a brief description of the applicant''''s current business, including the varieties of products produced and sold and the geographic area of product distribution. The description should also include basic business information concerning the applicant; e.g. the length of time the applicant has been in business, the size and location of business operations, etc. The response to item 12 may be submitted on a separate sheet, if needed. IN ALL CASES, please submit supporting documentation with your application; e.g., annual report, product catalogs, price lists, advertisements, etc.

Item 13 - Provide the number of employees employed by the applicant.

Item 14 - Indicate whether the applicant is a small business.

Item 15 - List fields of use in which applicant intends to practice the invention.

Item 16 - Indicate whether applicant is willing to accept a license for less than all fields of use indicated in Item 15.

Item 17 - Indicate any special license terms or conditions desired by applicant. It is not necessary to respond to this item if it is not applicable.

Item 18 - Indicate applicant''''s best knowledge of any current use of the invention by industry or government for research or commercial purposes.

Item 19 - List the countries in which applicant intends to practice the invention. International patent rights may be available for some inventions.

Item 20 - THIS IS THE MOST CRITICAL ITEM ON THE APPLICATION FORM. The response to item 20 may be submitted on separate sheets, if needed. Provide the applicant''''s plan for commercializing the invention. The submitted plan should include:

  • A brief description of all commercial products expected to result from the patent license and how these products fit into applicant''''s current product line. You may also include any anticipated competitive advantages of these products and any possible product line extensions.
  • An approximate time line, with relevant milestones, from the date the license agreement is signed until products are offered for sale. Itemize any factors that may arise during product development and scale-up which may affect the ultimate decision to offer products for sale.
  • Applicant''''s best current estimates of potential market size, market growth potential and any other market information available to applicant. A profitability analysis and any other financial projections available to applicant should also be included. These data will be used to help determine fair and reasonable license fees and royalties.
  • A concise description of the manufacturing, marketing, financial and technical resources needed to carry out applicant''''s submitted plan, and how these resources will be provided and/or obtained by the applicant (e.g., applicant''''s existing facilities, in-house technical expertise, contract manufacturing, partnering with other entities, marketing through distributors, source(s) of financing, etc.).
  • Documentation of applicant''''s capability to provide and/or obtain the financial resources necessary to carry out the submitted plan. Such documentation might include the most recent annual report, the most recent SEC submission, accounting statements, bank statements, written commitments from third party investors, or any other documented source of financing sufficient to cover the anticipated financial investment required to carry out the submitted plan.

Item 21 - Provide any additional information that applicant would like to submit in support of the license application. It is not necessary to respond to this item if it is not applicable.

Item 22 - The patent license application must be signed and dated by an authorized company representative.

SPECIAL CONSIDERATIONS FOR EXCLUSIVE

AND PARTIALLY EXCLUSIVE LICENSES

Exclusive or partially exclusive patent licenses, including coexclusive, exclusive territory and exclusive field of use licenses, may be granted on a federally owned invention only after certain requirements for public notification have been fulfilled. A notice that an invention is available for licensing must be published in the Federal Register for at least 90 days prior to the granting of an exclusive or partially exclusive license. A notice of intent to grant an exclusive license or partially exclusive license must also be published in the Federal Register, providing the opportunity for filing written objections within a 30-day period. The two notification periods may run concurrently.

In addition to the public notification requirements, the agency granting an exclusive or partially exclusive license must prepare a written determination that such a license will best serve the interests of the Federal government and the public. The specific factors to be considered are:

  • Will an exclusive license be most likely to bring the invention to practical application or otherwise promote the invention''''s utilization by the public? If so, why?
  • Is the desired practical application of the invention likely to be expeditiously achieved by nonexclusive licensing? If not, why not?
  • Is exclusive licensing necessary as an incentive for the investment of risk capital and other resources? If so, why?
  • What scope of exclusivity is required to provide an incentive for investment?
  • Will the granting of an exclusive license tend to substantially lessen competition?

Applicants requesting exclusive or partially exclusive licenses should submit any information and/or justifications for exclusivity which they are able to provide in response to the questions itemized above. Responses should be submitted on separate sheets and attached to the license application.

TERMS OF LICENSE AGREEMENTS GRANTED BY USDA

Patent licenses granted by USDA are royalty bearing and also include provisions for a license execution fee, annual license maintenance fees and patent cost reimbursement. License fees and royalty rates are negotiable. Information submitted by the applicant, including estimates of potential market size, market share and profitability, is used to help determine fair and reasonable terms. Other factors, such as the scope of the licensed patent, the scope of rights granted and the financial and resource investments required for commercialization, are also considered.

USDA license agreements also include other terms required by law and regulation. (Please refer to 37 CFR 404.5). Licensees are granted the right to enforce licensed patents. Licensees are required to submit periodic progress reports detailing the progress being made to commercialize the licensed patents. After the first sale of royalty bearing products, licensees are required to submit royalty reports, setting forth the amount of products made, used and sold and the amount of royalties due to USDA. Pursuant to 37 CFR 404.14, all such reports may be treated by the Federal agency as privileged and confidential and not subject to disclosure under 5 U.S.C. 552 (Freedom of Information Act).

Applicants with questions concerning the terms of USDA license agreements should call the Technology Licensing Program Office at (301) 504-5989.

AGENCY DISCLOSURE OF ESTIMATED BURDEN

According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0518-0003. The time required to complete this information collection is estimated to average 3 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Applicants with suggestions for reducing this burden may contact: Coordinator, Technology Licensing Program, 5601 Sunnyside Avenue, Rm. 4-1158, Beltsville, MD 20705-5131.

Revision 11/99


Last Modified: 6/18/2001
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