Many research institutions transfer their intellectual property to new firms founded to exploit it and tend to receive equity in a new firm instead of, or in combination with, cash royalty like annual royalties on sale. Especially in U.S., U.K. and Ca...
Many research institutions transfer their intellectual property to new firms founded to exploit it and tend to receive equity in a new firm instead of, or in combination with, cash royalty like annual royalties on sale. Especially in U.S., U.K. and Canada where business infrastructure is well organized for new firms, research institutions have positive attitude to equity licensing. Even in other regions where entrepreneurial infrastructure is weak, taking equity has also been considered as an important method of IP transfer. Because taking equity is likely to expedite IP transfer and maximize expected payoff to the research institutions. And the application of IP transfer with equity can be explained as a response to the trend in which research institutions are becoming more entrepreneurial.
This paper examines types and application processes of IP transfer with equity. And we review the need for the application of IP transfer with equity and raise several points on applying of equity licensing in the regulations in force. The result of this study can help research institutions to set up their effective strategy in IP transfer.