ABSTRACT
For universities, this allows for the opportunity to license technology to governments and both large and small businesses. The mechanism to do this is called a licensing agreement. A licensing agreement is a written contract in which the owner of the intellectual property (IP) allows the licensee to use the IP either exclusively or nonexclusively. In return for this right, the licensee pays royalties or some other exchange.23 A royalty is a usage-based payment methodology in which payments could be received as a percentage of a sales price or a fixed amount per unit. Straight royalties are a good mechanism to use with governments or large businesses as they have existing funding sources. As is related to start-up businesses, universities frequently ask for a stake of ownership (called equity) or a combination of equity and royalties for a license.
