Licensing

University employees are required to comply with all policies (including but not limited to the Conflict of Interest and Conflict of Commitment policies), guidelines, and procedures of the University, as well as any management plans or resource usage requirements. Obligations to the University are and must be kept separate from work with, or in support of, any outside interests. Approval of any individual license, or conflict of interest or conflict of commitment requests, will be subject to continued compliance with University obligations including any current or future project or research-specific management plans.

Although not technically part of either policy, income generated through the commercialization of intellectual property (IP) is shared with all IP contributors as set forth in the Royalty Distribution Schedule (see "How are royalties distributed?" below).

In general, the contributors share is the largest single portion of the royalties. In specific circumstances, a department may take the role of the contributors, garnering the contributor share, the contributor lab share, and the department’s share. This occurs when the intellectual property is determined to be a departmental work.

The U of A royalty distribution schedule (see "How are royalties distributed?" below) is based on net income. Net income consists of the cumulative gross revenues generated through the transfer or other commercialization of ABOR-owned IP through Tech Launch Arizona, including royalties, up-front and license fees, milestone payments, settlement amounts, and any other compensation, less: (a) a 15% University administrative fee to fund TLA operations; (b) unreimbursed legal costs and direct costs, including any amounts required to be remitted to the State of Arizona or any other costs incurred by Tech Launch Arizona, associated with the ABOR-owned IP; and (c) amounts owed under any agreement related to the ABOR-owned IP, including those with a sponsor, federal or state agency, co-owner, or other university or nonprofit entity. No University personnel, overhead, or other costs not directly related to legal protection or other contractual obligations will be deducted as part of the net income calculation.

Net income is distributed according to the following schedule:  

Revenue from license agreements is shared with all inventors regardless of their participation in the licensee. In addition, the University considers all revenue received under a license agreement, including any revenue garnered from warrant or equity positions in a startup, as revenue to be distributed.

Once a liquidation event occurs TLA will generally sell the warrants, or the Foundation will sell the shares of stock, within a short timeframe, typically days, after legally able to sell (often, especially in the case of an IPO, there is a “hold period” during which equity cannot be sold.).

On rare occasions TLA or the UA Foundation may have reasonable belief based on special circumstances that holding the equity for a short time would result in a higher return. In these cases, discussions with all potential recipients of these royalty distributions may take place to decide to hold the equity for a limited time prior to selling. Once sold, the revenue is distributed according to the Royalty Distribution Policy.