The Technology Licensing Office (TLO) manages the process of obtaining patent protection and seeks parties that may be interested in developing and commercializing the technology. Once you have submitted your disclosure, TLO will determine whether or not the technology fits the criteria for patentability. Using the Research@MIT app, you can track whether or not your case is still active or closed, as well as find relevant details about your cases.
Patenting Your Invention
Patenting an invention gives the holder the right to exclude others from making, using, selling, offering to sell, and importing the invention.
The United States Patent Office (USPTO) grants patents to inventions that meet three main criteria. The invention has to:
- Be novel
- Be non-obvious
- Have utility
Once we have received your invention disclosure, you will be assigned to one of our experienced licensing officers who will become your main point of contact for everything. Your licensing officer will begin the assessment process, evaluating the invention tor commercial licensing potential and patentability. The patentability review is performed in consultation with patent attorneys.
Commercial Assessment Factors
Commercial assessment factors include consideration of:
- Unmet needs or problems the technology might solve and any competing solutions
- Potential market applications
- Potential costs associated with the solution and whether it may be supported by the market
- Challenges that may impede sustainable commercialization
- Whether a relevant industry is open to licensing of early-stage technology
- The technology’s stage of development or reduction to practice
While we will work closely with you to discuss all the factors relevant factors to whether or not a patent application is filed, the TLO will make the ultimate decision. If the assessment is favorable, your licensing officer will contact you to determine the next steps, which may include starting the process of obtaining patent protection with the USPTO and/or foreign patent offices.
Applying for a Patent
Once the TLO has determined a patent application should be filed, the TLO will collaborate with an outside patent counsel to support the process, assuring access to patent specialists in diverse technology areas. The patent counsel may continue to seek inventor input on technical issues during patent prosecution.
To justify the dedication of resources to development and commercialization of a technology from a university, a company often seeks exclusive commercial rights to an invention, in its end use market application. The TLO carefully reviews the commercial potential for an invention before investing in the patent process. However, because the need for commencing a patent filing usually precedes finding a licensee, we look for efficient ways to seek early protection for as many promising inventions as possible.
Posters, abstracts, or presentations describing an invention to the public are considered public disclosures, which can prevent patenting in most countries if the public disclosure occurs prior to filing a patent application. The US allows inventors to file a patent application for up to one year after public disclosure. It is best if you disclose your technology to the TLO well in advance of public disclosure of your work.
For extra protection, we recommend that any presentation of the invention to a party outside of MIT be covered by a nondisclosure agreement (NDA), a tangible property agreement, and/or an Incoming Material Transfer Agreement (MTA) if applicable.
The process of obtaining a patent with the USPTO occurs over several years—the average US utility patent application is pending for about three years, though inventors in the biotech and computer fields should plan on a longer patent prosecution period.
Once a patent is issued, it is typically enforceable for 20 years from the initial filing of the application that resulted in the patent.
Filing a non-provisional US patent application may cost between $10,000 and $20,000 and the cost of obtaining an issued patent may cost a total of $40,000 to $50,000, in addition to maintenance fees which must be paid to keep patents active after issuance. Pursuing and obtaining patents in other countries is an expensive undertaking.
Marketing Your Invention
Working in close collaboration, we will identify and market MIT protected inventions to appropriate companies that have the expertise, resources, and business networks to bring the technology to market. The TLO uses many sources and strategies to identify potential licensees and market inventions, sometimes including existing relationships. An investigator’s personal connections to industry counterparts and entrepreneurs may support the matching of an invention to a potential licensee.
Your licensing officer may generate marketing materials detailing non-confidential information packages to share with potential company licensees or potential investors, including the creation of an in-depth listing on our website, which is updated on an ongoing basis. Supporting materials may include a one-page summary outlining the benefits of technology, publications and published patent applications or issued patents.
Once interested licensees are identified, an inventor may be the best person to describe the details of the invention and its technical advantages. The most successful technology transfer results are obtained when the inventor and the licensing professional work together as a team to market and promote the use of the technology.
Commercializing Your Invention
After we have identified the right party to take your technology to market, the next step is to negotiate a license agreement. The TLO pursues commercial license agreements with companies that are committed to commercializing MIT’s inventions.
After obtaining a license, the licensee will continue the development of the technology and make investments to develop a product or service incorporating or using the MIT technology. Most licensees continue to develop an invention with the goal of meeting a market need and making the technology robust for volume commercialization.
A licensee's development may include additional testing, prototyping for manufacturability, durability and integrity, and further development to improve performance and other characteristics. Documentation for training, installation, and marketing is also often created during this phase. Benchmarking tests are often required to demonstrate the product/service advantages and to position the product in the market.
The TLO maintains an ongoing working relationship with each licensee over the term of the license agreement to monitor progress toward the development and commercialization of products embodying or produced using MIT-licensed technology.
The revenues received from a licensed technology are shared with inventors (defined as named inventors on patents or authors of copyrighted materials) and among MIT departments, labs and centers, and the MIT General Fund. Revenues going to MIT entities are reinvested in additional research and education, thus fostering the creation of the next generation of MIT research, researchers and entrepreneurs. That said, the TLO believes that the rewards of an invention reaching the market are often more significant than the financial considerations alone.
Annual Licensing Fees
Annual license fees are typical.
Royalties are derived from the eventual sales of licensed products and services and can generate revenues that may be significant. Often, commercial sales may occur years after a license agreement is executed. The “inventors’ share” of royalties is divided equally among all inventors unless all inventors agree in writing to another distribution formula.
Distribution of yearly royalty revenue received occurs once a year, usually in the first quarter of the following MIT Fiscal Year.
The equity that MIT receives under a license agreement is distributed to all inventors in accordance with the same policy that governs the distribution of cash royalties. MIT typically liquidates its equity with a liquidation event such as a public offering or acquisition of the licensee.
License revenues paid to inventors are generally taxable and are reported as Form 1099 income. Consult a tax advisor for advice relating to your personal tax obligations.
- Deductions from Gross Revenue include a 15 percent administrative fee to cover the operating costs of the TLO, as well as any unreimbursed patent costs or other costs associated with the protection and defense of the intellectual property, and any payments due to third parties such as Joint Owners.
- Net Revenue is then distributed 33 percent to inventors, authors, or contributors (as applicable) and is divided equally between those inventors, authors, or contributors (unless they have all agreed in writing to an alternate distribution).
- The remaining Net Revenue is distributed evenly across the MIT General Fund, to be used for educational and research purposes, and academic departments, centers and labs, after adjustments are made to recover any remaining MIT unreimbursed patent costs.
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