Rules for Commercialization through Licensing

University of Zagreb Rules 

Pursuant to Article 21 of the Statute of the University of Zagreb, the Senate of the University of Zagreb, at its 15th regular session in the 353rd academic year (2021/2022), held on 19 July 2022, adopted the  Regulation on Intellectual Property Management at the University of Zagreb, which establishes the general rules governing the commercialization of intellectual property, including commercialization through the conclusion of licence agreements.  

Section 4.3. Commercialization of Research Results of the Regulation provides as follows:   

4.3.1. Regardless of the commercialization method selected and implemented in a particular case, all agreements concluded during the commercialization process shall, through their respective provisions, ensure that:  

• the protection of the interests of the constituent unit and the University, as well as those of their employees, students, and collaborators; 

• wherever possible, the reservation of rights in favour of the constituent unit and the University to use the intellectual property for teaching, other educational purposes, and future research.  
• that the use of the intellectual property will not be restricted, nor will it be used in a manner that is unethical or unlawful. 

4.3.2. The constituent units and the University encourage the commercialization of the intellectual property referred to in the Guidelines and this Regulation in a manner that strengthens the scientific and artistic entrepreneurship of their employees, students, and collaborators, while promoting the establishment of new legal entities based on innovative and creative outputs (start-up companies and spin-off companies). 

Rationale and Support  

Licensing is a means of commercializing intellectual property whereby the holder of an intellectual property right authorizes another party (the licensee) to exploit the subject matter of that intellectual property right in a specified manner and under specified conditions. In return, the licensee undertakes to use the intellectual property in the agreed manner and to the agreed extent, and to pay the agreed remuneration.  This legal relationship is governed by a licence agreement, which must be concluded in writing. The subject matter of a licence may consist of any industrial property right (such as a patent, trademark, industrial design,  or other industrial property right), and a licence agreement may also be concluded in respect of an unregistered invention, know-how, or a trade secret.   

A licence may be granted on either an exclusive or a non-exclusive basis. An exclusive licence exists where the licensee is the only party authorized to use the licensed subject matter in the agreed manner. A non-exclusive licence means that the licensee is merely one of several authorized users. If a licence agreement does not specify the type of licence granted, it is presumed to be a non-exclusive licence.
A licence may be granted either for consideration or free of charge. Where consideration is payable, the licence fee may be agreed as a percentage of revenue (royalty) or as a fixed lump-sum payment.   

A licence granted for consideration also includes a cross-licence, under which two holders of different intellectual property rights mutually grant each other the right to exploit their respective intellectual property. 

During negotiations for the conclusion of a licence agreement, it is essential, at a minimum, to clearly define: 

• the subject matter of the licence; 
• whether the licence will be exclusive or non-exclusive; 
• the geographical territory for which the licence is granted (e.g. Croatia, the European Union, or worldwide); 
• the duration of the licence (e.g. five years or an indefinite period), provided that a licence relating to subject matter protected by an intellectual property right may not extend beyond the statutory term of protection applicable to that right; 
• the field of use and the manner in which the licensed subject matter may be exploited (e.g. for the manufacture of pharmaceutical products); 

• whether the licensee is entitled to authorize third parties to exploit the licensed subject matter (i.e. to grant sublicences); 
• which party will own the rights to any improvements to the technology developed by the licensee; 
• the amount of the licence fee, together with the method (e.g. a lump-sum payment, instalment payments in fixed amounts, or royalties based on a percentage of production or sales, or another agreed method) and the timing of payment. 

In addition to the matters listed above, a licence agreement may also regulate other issues, such as the obligation to maintain minimum quality standards in the manufacture and/or distribution of products embodying the intellectual property, the obligation to label products as being manufactured under licence, and other similar matters.   

In the field of copyright and related rights, the legislation does not use the term licence. Instead, it refers to the granting of authorization to use a work or the establishment of exploitation rights. In substance, however, this is the same type of legal transaction and may be regarded as equivalent to a licence.  

For reference, you may also download the Model Licence Agreement.   

Given the complexity of licence agreements and the wide scope for tailoring their provisions, the team of the Centre for Research, Development and Technology Transfer provides support in planning the commercialization of intellectual property through licensing, as well as in negotiating and concluding licence agreements.² Information on the support we offer to researchers is available here.

Sources 

The explanatory text on licensing and the model licence agreement have been adapted from the publication Intellectual Property Management at the Universityby Iva Knešaurek,¹ Romana Matanovac Vučković,² Vlatka Petrović,³ and Tatjana Sučić.⁴ Published by the University of Zagreb,⁵ Centre for Research, Development and Technology Transfer,⁶ as part of the BISTEC – Building Innovation Support Through Efficient Cooperation Network project,⁷ Zagreb, 2015, pp. 66–67 and 126–133.