Reviewing an intellectual property licence from a university

A licence of university intellectual property gives a company or a spin-out the right to develop and sell something the university's researchers created, in return for royalties, milestone payments and, for a spin-out, equity. The university's technology transfer office uses a standard form with diligence obligations, reserved rights and termination triggers designed to take the technology back if the company does not perform. I review the licence from the licensee's side and return it marked up with a written explanation of the changes and which ones a university will accept, for a fixed fee of £495 in three working days.

Who this is for

Companies, founders and spin-outs in England and Wales taking a licence of software, copyright works, know-how, designs or patented technology from a university or research institute, and want a licence they can build a business on. Both parties are organisations; where the licensed rights include patents, the patents themselves are a matter for a patent attorney regulated by IPReg and the review addresses the licence terms.

What to look for in a university IP licence

The rights, the field and the territory

The licence should identify each right licensed, by registration number, title or description, and state the field of use, the territory and whether the licence is exclusive, sole or non-exclusive. An exclusive licence of copyright must be in writing under section 92 of the Copyright, Designs and Patents Act 1988. The review checks that the field is wide enough for the company's plans, that the licensed know-how is described so the company knows what it may use, that sub-licensing is permitted for manufacturing and distribution, and that the university warrants it owns what it is licensing and has obtained assignments from students and staff.

Diligence, milestones and the licence being taken back

University licences require the licensee to use its best or reasonable endeavours to develop and commercialise the technology, to meet development milestones by dates, and to sell in every country of the territory, failing which the licence can be narrowed or terminated. The review asks for reasonable endeavours rather than best, for milestones that reflect a realistic development plan with a right to extend on notice, for a shortfall to lead first to loss of exclusivity or of an unexploited field or territory rather than termination, and for the licensee's funding round dates to be recognised as milestones where the plan depends on them.

Royalties, milestone payments and stacking

The financial terms combine an upfront fee, milestone payments on development or regulatory events, royalties on net sales, a share of sub-licensing income and, for a spin-out, equity. The review checks that net sales excludes returns, taxes and agreed costs, that royalties reduce where the company must pay third-party licensors to sell the product, that milestone payments are tied to events the company controls, that the sub-licensing share is a percentage of sub-licence income rather than of the sub-licensee's sales, and that payment and reporting periods are workable, with the Late Payment of Commercial Debts (Interest) Act 1998 applying to sums due either way.

Improvements and who owns what comes next

The company will improve the technology and the university's researchers will continue to work in the field. The review checks that improvements the company makes belong to the company, with at most a licence back to the university for research and teaching, that university improvements within the field are offered to the company on defined terms, and that any assignment either way is in writing under section 90 of the Copyright, Designs and Patents Act 1988. Joint improvements should be allocated rather than jointly owned, since co-owners cannot exploit a copyright work without each other's consent under section 10.

The university's reserved rights, publication and freedom of information

The university will reserve the right to use the licensed technology for research and teaching and to publish, and the licensee needs those rights limited so that a competitor cannot obtain the technology through an academic collaboration. The review asks for the reserved right to exclude commercial use and third-party research funded by a competitor, for a publication review period that lets the company protect confidential information and file for protection, and for the university to consult the company before disclosing the licence in response to a request under the Freedom of Information Act 2000, applying the exemptions for commercially sensitive information.

Warranties, liability, insurance and termination

University licences give no warranty that the technology works or does not infringe, cap the university's liability at the fees received, and require the licensee to indemnify the university for product liability claims and to carry insurance before first sale. The review checks that the university warrants title and its right to grant the licence, that the indemnity is limited to claims arising from the licensee's products, that insurance requirements start when the product is sold rather than at signature, and that termination is limited to unremedied material breach, non-payment and insolvency, with the licensee keeping its own improvements and a sell-off period.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Complex review, £895. Heavily negotiated or unusually complex documents. Five working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

The university wants best endeavours to commercialise. What does that commit us to?

A demanding standard that can require you to act against your own commercial interest. The review asks for reasonable endeavours measured against a development plan with milestone dates, so that the obligation is one you can plan for and prove you have met.

If we improve the technology, does the university get the improvements?

Only if the licence says so, and some drafts assign improvements back or make them jointly owned. The review asks for your improvements to be yours, with at most a licence back for research and teaching, and for university improvements in the field to be offered to you.

Can the university license the same technology to someone else?

Not within your field and territory if the licence is exclusive, but the reserved rights for research and teaching can let a competitor in through a collaboration. The review limits the reserved rights to non-commercial use and excludes research funded by a competitor in your field.

Related guidance and services

• Contract review, £495, the service this page describes
• Shareholders agreement, £995
• Reviewing a research collaboration agreement with a university
• Reviewing a licence agreement for your product or brand

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.