This glossary of licence terms is provided to explain the meaning of some common words and phrases found in the terms of licence agreements. During your commercialisation journey, you may encounter or be asked to comment on these terms by Imperial's Commercialisation team members or your commercial or legal representatives if you are forming a startup company. This glossary is provided as an information guide and is part of our commitment to support you during the commercialisation process.
Licence agreements are needed not only when IP is licensed to external organisations, but also when Imperial staff launch their own companies using Imperial's IP.
Glossary
- Diligent and reasonable endeavours
- Indemnity
- Licensee
- Licensor
- Milestones
- Net receipts
- Net sales
- Payment terms
- Royalties on net receipts
- Royalties on net sales
Imperial has a duty, along with other publicly-funded universities, to maximise the societal impact of its research outputs. This clause sets a standard by which the licensees efforts to achieve that impact are judged. It is the expectation that the licensee makes a reasonable effort to develop the licensed intellectual property into a product or service.
This clause protects ICIL and Imperial in the event there is a court action, claims and damages awarded resulting from the licensee’s use of the IP. The licensee makes a promise of financial protection to ICIL and Imperial for any potential legal liabilities and claims issued by a third party as a result of the licensee’s use. This is a standard provision requested by licensors in all licence agreements and is an essential requirement particularly in licences granted by universities and their technology transfer organisations.
The entity to whom a licence is granted.
The entity that grants the licence.
These are one-off payments to the licensor in the event of certain developmental (e.g. regulatory approval) or sales milestones achieved by the licensee. They are designed to share the increased value of the IP resulting from the achievement of such milestone events between the licensee and licensor.
The income generated by the licensee in sub-licensing the intellectual property. The clause details the forms which that income may take.
The sales price of the product or service covered or enabled by the intellectual property under licence minus the cost of shipping and taxes along with a few other permitted deductions. It is the most common way to calculate royalties based on sales.
The method, frequency and currency of payment of royalties on net sales and net receipts.
The percentage of net receipts payable to the licensor (along with the other financial terms of the licence) payable by the licensee in return for granting the licence.
The percentage of net sales payable to the licensor (along with the other financial terms of the licence) by the licensee in return for granting the licence.
Who should I contact about IP?
Depending on where you are in the intellectual property process, you have a few options:
- Faculty commercialisation Teams are the point of contact for staff starting their commercialisation journey.
- Intellectual Property Strategy team is the point of contact for policy questions, such as Imperial's IP policy and Rewards to Inventors.
- Support for the commercialisation team is the point of contact for supporting activities of the Faculty Commercialisation Teams.