The National Institutes of Health (NIH) has developed a new short-term licensing arrangement they hope will encourage licensing of NIH and FDA inventions to start-up companies. The NIH Start-Up Exclusive License Agreements targets start-up companies less than 5 years old, with less than $5M in raised capital, and fewer thans than 50 employees. By offering an exclusive license, they hope to accelerate the technology transfer process. However, this temporary pilot program runs only until September 30, 2012.
The most unique aspect of this program is the one-year exclusive license for $2000 with the option to amend to a permanent exclusive license. Through the use of this mechanism, the NIH is creating a one year trial period where the parties can come back to the table and reevaluate where they stand before they enter a more standard license agreement that includes milestone payments, performance benchmarks, royalties, etc.
We will soon see whether this program garners enough interest in a tough economy to be effective.