About MIT TLO     MIT Community     For Industry     Resources  
 
 
 

Frequently Asked Questions

The MIT Technology Licensing Office is one of the most active technology transfer offices in the country. We manage the patenting and licensing process for MIT and Lincoln Laboratory. We are often asked by other universities and federal laboratories to describe how we do it. This is designed to answer many of the frequently asked questions. It is based on our most recent Fiscal Year, but reflects our performance generally. Please feel free to contact us if you have additional questions.

A. General Background and Statistics

  1. What are your statistics for FY 2013?
  2. What was your revenue for FY 2013?
  3. What were your expenditures on patents?
  4. Do you use inside or outside patent counsel?
  5. Do you file foreign patents?
  6. What share of royalties do inventors get? How much money was distributed to inventors last year?
  7. Is there a cap on inventor royalties?
  8. What is the structure of your organization? Are you a separate foundation?
  9. What is the staffing of the Technology Licensing Office?
  10. What is the background of your licensing officers?
  11. What functions are performed by your licensing officers?
  12. Who decides whether to file a patent?
  13. Do you have a patent committee for deciding what to patent?

B. Startup Companies

  1. What fraction of your licenses are to startup companies?
  2. Do you have a formal incubator?
  3. Do you write or help to write business plans?
  4. Do you assemble management teams?
  5. Do you invest money in startups?
  6. Then how do you start up so many companies?
  7. Does MIT take equity in its startups?
  8. How much equity do you take for the technology?
  9. Does MIT take any management role in the company?
  10. Do startup companies in which M.I.T. owns equity have any special access to future "improvement inventions" coming from M.I.T.?
  11. Will MIT license know-how to its startup companies?
  12. Can MIT inventors take equity in startups? How much?
  13. What types of venture capitalists invest in MIT technology?

C. Success Factors

  1. What accounts for your success in licensing and especially in startups?

D. Can Any University Do It?

  1. Can any university do it?

SECTION A: General Background and Statistics

1. What are your statistics for Fiscal FY 2013?

 
Research Budget Fiscal Year 2013
$ 674.3 M
  On-Campus Federal
$   466.0 M
  On-Campus Industrial
$   106.4 M
  Other (Non-profit, Internal, Local etc.)
$   101.9 M
     
  Lincoln Laboratory Federal
$   881.5 M
  Lincoln Laboratory Non-federal $       2.7 M
  Total Lincoln Laboratory
$  884.1 M
 
Number of Invention Disclosures Total   765  
  Number from On-Campus   698  
  Number from Lincoln Labs   67  
         
 
Number of U.S. Patents Filed 387
Number of U.S. Patents Issued 288
Number of Licenses granted
(not including trademarks)
59
Number of Trademark Licenses
139
Number of Material Transfer Agreements
Negotiated 
463
Number of Options granted (not including
options as part of research agreements)
45
Number of Companies started
(venture capitalized and/or with
minimum of $50K of other funding)
16

2. What was your revenue for FY 2013?

 
Gross Revenue $ 79.6 M
 Royalties $46.14 M
 Patent Reimbursement   $9.86 M
 Equity Cash-In   $3.59 M

3. What were your expenditures on patents?

$18.99 Million in FY 2013

4. Do you use inside or outside patent counsel?

Mostly outside

5. Do you file foreign patents?

We attempt to preserve foreign filing rights by filing the initial U.S. patent, whenever possible, before the first public disclosure. More than half of our U.S. filings are followed up with an international PCT filing. Later foreign patent prosecution is dependent upon the licensing situation.

6. What share of royalties do inventors get? How much money was distributed to inventors last year?

Inventors share one-third of royalties after deduction of a 15% administration fee and any unreimbursed patent expenses. Over 17 million dollars were distributed to inventors in FY 2013.

7. Is there a cap on inventor royalties?

No.

8. What is the structure of your organization? Are you a separate foundation?

We are a department of the university, reporting to the Vice President of Research, who in turn reports to the Provost. MIT is a private university, with no state support.

9. What is the staffing of the Technology Licensing Office?

   
  12   Senior Technology Licensing Officers 
  5   Associate Licensing Officers
7
  Licensing Associates
1
  Financial Manager
3
  Staff Accountants
 
1
  Equity Docketing Assistant
1
  Patent Administration Manager
2
  Information Systems Specialists 
1
  Office Manager
2
  Patent Compliance Administrators
7
  Support Staff
 
  42   Total

10. What is the background of your licensing officers?

Most have technical backgrounds (often engineering) and have spent a dozen or more years in industry. Most have worked in product development, marketing and/or business development and understand the process of bringing new technology to market. Some also have Ph.D.'s, some M.B.A.'s, and some legal backgrounds. All are problem solvers with excellent communication skills and are good negotiators.

11. What functions are performed by your licensing officers?

Each officer manages individual "cases" from beginning to end, including: evaluation of invention disclosures, management of literature searches, market assessment, decisions on patent filing, managing of outside attorneys on patent prosecution, marketing of the technology to potential licensees, negotiation of license agreements, and monitoring of licensee performance.

12. Who decides whether to file a patent?

The technology licensing officer, in consultation with the inventor and occasionally the patent attorney.

13. Do you have a patent committee for deciding what to patent?

No.

SECTION B: Startup Companies

1. What fraction of your licenses are to startup companies?

About 27% (16 companies in FY 2013).

2. Do you have a formal incubator?

No, nor do we allow companies to use our laboratories, except as part of CRDAs at Lincoln Laboratory when inventors do not own equity.

3. Do you write or help to write business plans?

No.

4. Do you assemble management teams?

No.

5. Do you invest money in startups?

No.

6. Then how do you start up so many companies?

Our experienced technology licensing officers identify those technologies potentially suitable for startups: cutting edge technologies in new markets, with a broad range of potential applications, and, usually, an inventor interested in founding a company (The founder may or may not plan to leave the university to be part of the management team of the company).

We then introduce the technology to potential investors (usually, but not always, venture capitalists) whose investment profiles appear to fit. It is then up to the investors (usually with the founder) to pull together a business plan for the company and to formally "found" the company.

The formal mechanism of transfer of MIT's technology to the company is a license agreement. This defines the intellectual property to be transferred, the development milestones to be met by the company (often including minimum amounts of capital to be raised) and the royalty terms.


7. Does MIT take equity in its startups?

We frequently take equity "in partial lieu of royalties".  Typically our licenses also require some licensing fees and some running royalties.

8. How much equity do you take for the technology?

Generally a small percentage, but undiluted through one round of funding (depending on the technology). This removes MIT from any management control while still preserving the value of our contribution.

9. Does MIT take any management role in the company?

No, and we do not take any seats on the board.

10. Do startup companies in which MIT owns equity have any special access to future "improvement inventions" coming from MIT?

No, except for very limited rights to inventions dominated by the initial patents licensed.

11. Will MIT license know-how to its startup companies?

All scientific results emerging from MIT research must be publishable and, except to the extent limited by patents or copyright, are available to the public.  We therefore cannot license "confidential know-how".

12. Can MIT inventors take equity in startups? How much?

Yes, with no numerical limit on percentage of company.  However, investigators who hold equity in a company may not accept sponsorship of research by that company. Such equity arrangements are subject to yearly review by the academic department. MIT Inventors at Lincoln Laboratory are subject to different rules; and, questions should be addressed to the Lincoln Laboratory's Technology Transfer Officer.

13. What types of venture capitalists invest in MIT technology?

Generally, investment is by "seed investors". Only a small number of venture capital firms are true "seed investors".  These investors provide not only initial capital, but help with business plans and assembling management teams, access to other investors, and, generally, substantial management guidance through the early years of the company.

SECTION C: Success Factors

What accounts for your success in licensing and especially in startups?

We attribute our success to the following factors:
  • A wealth of good technology coming from our investigators, and an entrepreneurial spirit among the faculty.
  • Clear policies well thought out and consistently applied.
  • Enthusiastic support from the upper administration of MIT who are committed to technology transfer.
  • A highly simplified invention disclosure and review process, "lowering the barriers" for investigators to submit inventions.
  • A staff of technically trained, industrially experienced licensing officers who understand both academia and industry and who get a great deal of satisfaction from "getting the deal done"--within university policy. Most have negotiated literally dozens of licenses (some more than 100), so that they have many alternative solutions to roadblocks and realistic expectations.
  • Straightforward licensing procedures and the ability to "commit at the negotiation table". Most agreements can be signed in the Technology Licensing Office without further review.
  • An entrepreneurial climate in the Cambridge/Boston area. Startup companies benefit from the presence of a large number of seed-stage venture capital firms (not all with offices in the area, but all frequent visitors); many consultants and experienced executives; hundreds of "role models" (both on-campus and in the area) who have built companies before; local incubators (even if not at MIT); and a number of "venture forums" and related business networking clubs, including, notably, the MIT Enterprise Forum. The MIT Technology Licensing Office cannot take credit for these, but we are a good source of introductions.

SECTION D: Can any university do it?

Yes.  Start with outstanding people; clear, articulated policies; and a streamlined process.  To get started, however, you will also need a sum of money to invest in filing patents and building a portfolio. Do not expect to break even for five years or more.