Technology Transfer & Commercialization Flashcards

What is a 'reach-through royalty' and why is it controversial in biotech licensing?

Answer: A royalty claimed on products discovered using licensed research tools; controversial because it taxes downstream innovations that may be far removed from the original tool

Reach-through royalties on products developed using licensed research tools are controversial because they can discourage use of enabling tools and create unpredictable financial burdens on innovators.

A company is evaluating an in-licensing opportunity. Which financial metric is most appropriate for valuing the technology?

Answer: Net Present Value (NPV) of projected royalty-adjusted cash flows from commercializing the technology

NPV of risk-adjusted future cash flows from the licensed technology is the standard valuation tool for in-licensing decisions, accounting for time value and commercial risk.

What is the primary function of a Material Transfer Agreement (MTA) in research and technology transfer?

Answer: To govern the transfer of tangible research materials (cell lines, compounds, data) between organizations while protecting IP rights and defining permitted uses

MTAs set terms for sharing physical research materials, including restrictions on use, publication rights, and IP ownership of any derivatives created with the materials.

Which commercialization strategy is most appropriate when a breakthrough technology has unclear market applications?

Answer: Pursue broad patent protection while conducting market discovery to identify the highest-value application

Broad IP protection combined with active market discovery allows innovators to preserve options while learning which application offers the greatest commercial potential.

A pharmaceutical company licenses a compound from a university. The compound fails Phase II trials. Under a typical licensing agreement, what happens to the license?

Answer: Depending on agreement terms, the licensee may terminate, renegotiate milestone obligations, or the license may revert to the university

Clinical failure outcomes depend on specific contract terms — most agreements allow licensee termination for convenience or define what happens when milestone-triggering events aren't met.

What role does a 'champion' play in internal technology transfer within a large corporation?

Answer: A champion advocates for adopting or commercializing a new technology internally, bridging R&D and business units to overcome organizational barriers

Internal champions are critical for technology transfer success because they drive adoption across organizational silos where competing priorities and NIH (not-invented-here) syndrome often stall promising technologies.

What is the significance of 'first to file' versus 'first to invent' in U.S. patent law for technology commercialization strategy?

Answer: First to file means filing speed is now critical; the U.S. switched to first-to-file in 2013 under the America Invents Act

The America Invents Act (2013) moved the U.S. to a first-inventor-to-file system, making prompt patent filing strategically essential to secure priority rights.