Full-Service Law Firm solving complex challenges through bold thinking, precise execution, and shared purpose.

Full Service Law Firm | Michael Best & Friedrich LLP

Specializing in the Intersection of Business &amp; Government

Meet our team of trusted advisors, strategic thinkers, and community builders dedicated to client success.

Learn about our full-service legal and business solutions, designed to address complex challenges for leading organizations across industries.

Access thought leadership, news, and resources to stay informed about the latest trends, legal developments, and industry innovations.

Discover how partnership, bold thinking, and precise execution drive results for clients nationwide.

Explore how our national reach and local expertise support clients across the United States and beyond.

Grow at a firm designed to bring out your best.

The landscape of university intellectual property licensing continues to evolve at a rapid pace. The 2026 AUTM Annual Meeting in Seattle offered a comprehensive examination of the challenges, opportunities, and best practices that technology transfer offices and their institutional partners must navigate to effectively commercialize academic innovations. Below are key themes and takeaways from conference presentations, along with actionable guidance for higher education institutions around licensing intellectual property in the current environment.<h2>The IP Ownership Imperative: Getting the Foundation Right</h2>Before licensing can occur, universities must ensure clear the title to the intellectual property they seek to commercialize. Conference presentations revealed that this fundamental requirement continues to present challenges across institutions of all sizes.&nbsp;Universities should ensure their IP policies are clear, consistently applied, and communicated to all personnel. Several institutions shared their experiences navigating situations where inventors had inadvertently assigned patents to other entities, sometimes discovered only when a third party inquired about licensing opportunities. Notably, one university's complex IP policy—last revised in 1985 and spanning sixteen pages—demonstrates the importance of periodic policy review and simplification. By comparison, another institution's policy is only five pages.Additionally, it was highlighted that conflicts of interest and commitment policies intersect with IP ownership in important ways. Employees conducting outside activities must understand when resulting IP belongs to the university, particularly when university facilities, equipment, or funding are involved. If they are not already doing so, universities should consider requiring all faculty, staff, and students to actually sign an IP policy agreement form to ensure awareness and compliance, rather than just having a policy in place.&nbsp;<h2>Strategic License Structuring: Lessons from the Field</h2>Conference presenters shared numerous "clauses I regret" that offer cautionary lessons for license negotiators. Among the most critical takeaways:Always include a royalty rate. One presenter described executing a license with a startup that stated royalty terms would be "negotiated later closer to product launch," which ultimately resulted in an amendment specifying a 0% royalty rate in exchange for a one-time payment of $2,500. When the startup was acquired for a substantial sum, the university received nothing.&nbsp;Exercise caution with field-limited exclusive licenses. Field limitations often create downstream complications when licensees approach the boundaries of their defined field or when future applications emerge that were not initially anticipated. Consider whether non-exclusive licensing might be preferable, or whether separate patent filings could preserve flexibility for licensing to different parties.&nbsp;Include diligence milestones throughout the development timeline. One presenter described a case where diligence milestones were omitted based on the assumption that if a company reached Phase 2, it would be unlikely to halt development. When the development stalled, the university had no contractual mechanism to recover the technology.&nbsp;Draft precise definitions. Ambiguity in definitions creates opportunities for dispute. One university experienced a situation where a licensee argued that no royalties were due because no product was supported by "all of the claims" of the licensed patents, as the contract language specified. Have multiple people review draft agreements, and read them again before execution.&nbsp;Protect university interests in infringement litigation. Licensees controlling infringement litigation may not share the university's priorities regarding claim validity or settlement terms. Consider revising template language to require university consent to all aspects of lawsuits, including filing, claims at issue, and strategy.&nbsp;<h2>Software Commercialization: Building the Startup Engine</h2>Software innovations present a distinct opportunity for university commercialization due to efficiency advantages over traditional physical technologies. As presenters from the University of Minnesota, University of Michigan, and Johns Hopkins University explained, software moves at the speed of the market rather than laboratory cycles, requires significantly less upfront capital to reach a minimum viable product, and often bypasses extensive regulatory hurdles.&nbsp;Universities seeking to accelerate software commercialization should consider establishing dedicated programs. Minnesota's Software Startup Development (SSD) program provides structured funding to support software startup creation, with licensing terms varying based on the nature of the IP.&nbsp; For example, open source software startups often have financial structures where the licensor may receive licenses for 2% equity, while proprietary software typically commands 5% equity. Michigan was notably the first university in the country to adopt equity-only licenses for VC-track software startups.&nbsp;Additionally, it was highlighted that institutions should leverage existing federal and state support programs in licensing software. SBIR/STTR programs have specific solicitations for AI, cybersecurity, and data science that prioritize software-led innovation with non-dilutive funding. The Economic Development Administration's Build to Scale program provides grants to strengthen regional entrepreneurial ecosystems, and I-Corps offers customer discovery support. Such programs can help accelerate faculty startups around university based software licenses.&nbsp;<h2>Non-Exclusive and High-Volume Licensing</h2>For certain innovations, non-exclusive licensing represents a strategic approach to maximize impact and generate sustainable revenue. Conference presenters from the University of Michigan, New York University, and University of Minnesota outlined attributes that make innovations suitable for this approach: broad applicability, easy replicability, and low regulatory burden.&nbsp;Universities pursuing high-volume licensing should develop efficient processes for packaging materials, including clear documentation and user guides. Technology hosting platforms such as Wellspring's Flintbox and E-lucid can support marketing efforts, while cross-posting on faculty websites and leveraging faculty conferences enhances visibility. Data-driven approaches, such as tracking website analytics, social media engagement, and conversion rates, enable continuous improvement of marketing strategies.&nbsp;<h2>Due Diligence on Licensees: Not Just Any Partner Will Do</h2>Selecting the right licensee is as important as structuring the right license. Presenters from MIT, Stanford, Johns Hopkins, and Osage University Partners emphasized the importance of evaluating prospective licensees based on credible business plans, capable teams, and strategic fit.&nbsp;Business plan reviews should encompass market analysis, competitive positioning, development timelines, financing sources, and exit strategies. For startups, written evidence of funding commitments or advanced fundraising discussions should be required.&nbsp;Furthermore, the evaluation of team composition matters significantly.&nbsp; Osage University Partners' analysis of their technology portfolio found that graduate students and postdocs generally outperform as CEOs, exhibiting deep humility, strong listening skills, and an ability to surround themselves with talented advisors. Professors serving as permanent CEOs generally do not perform well, though exceptions exist, particularly among computer science faculty.<h2>Founder Matchmaking and Accelerator Programs</h2>Several universities have developed structured programs to connect technologies with entrepreneurial talent. The University of Colorado Boulder's Embark program recruits entrepreneurs to commercialize university technologies that would otherwise remain on the shelf. Technologies selected for the program come with startup-friendly license terms and financial support, while entrepreneurs receive exclusive IP access, mentorship, and access to pre-seed investments.&nbsp;Michigan's Accelerate Blue Foundry similarly matches UM IP with entrepreneurial leadership through a structured five-month process. The pilot cohort produced eight startups, with successful participants receiving $50,000 seed investments from the Accelerate Blue Fund. Key lessons learned include engaging mentors earlier and consistently, setting expectations clearly, and providing background materials sooner to enable "fail fast" decision-making within two to three months.&nbsp;For universities lacking internal venture creation capacity, venture studios offer an alternative model. Studios typically serve as co-founders, providing rapid ideation and validation support while enabling researchers to focus on innovation rather than commercialization mechanics.&nbsp;<h2>Navigating AI and Emerging Technology Licensing</h2>Artificial intelligence and machine learning technologies present unique opportunities and challenges for university licensing. Conference presenters outlined the various forms of IP that may be implicated, including trained and untrained models, training data, know-how, real-world integrations, user interfaces, and branding.&nbsp;Patent eligibility remains unsettled. The Federal Circuit's decision in Recentive v. Fox held that patents claiming only the application of generic machine learning to new data environments, without disclosing improvements to the machine learning models themselves, are patent ineligible under Section 101. However, the USPTO's December 2025 memo on Ex Parte Desjardins signaled strong support for AI-related patents, cautioning examiners against high-level generality in their analyses and emphasizing that improvements in computer functioning or other technology are eligible.&nbsp;Universities should file patents on new model architectures (transformers, convolutional neural networks) and user-facing elements, but pause when inventions involve only off-the-shelf models with new training data or small structural changes to existing models. Inventor education remains critical, as disclosures often come from labs experimenting with commercially available AI models.&nbsp;Training data presents copyright risks. Courts have suggested that training on pirated materials is problematic, particularly when market impact can be demonstrated. Labs need to clean their data sets for licensing, avoiding unlicensed or unpermitted data in the training corpus, a process analogous to open source software code review. Labs should also avoid accidentally encumbering their work through journal requirements that mandate publication of code or data.Agreement structures must capture downstream value. Consider definitions that address licensed products incorporating algorithms trained with licensed data, and include royalty provisions that acknowledge the contribution of AI-related IP even as underlying patents may expire.&nbsp;<h2>Medical Device Commercialization: The Gap in University Licensing</h2>Direct licensing of university IP to medical device industry is less common than in other sectors. Industry increasingly pays premiums for acquiring existing companies with established products and sales revenues, seeking to avoid early-stage technology risk.&nbsp;Universities can bridge this gap through structured product development processes. Conference presenters outlined a framework encompassing innovation, ideation, problem characterization, technological feasibility, target product profile development, design planning, and clinical/prototype development, all as precursors to industry licensing or startup formation. Strategic use of consultants can supplement university capabilities in market research, design planning, regulatory pathway assessment, and reimbursement strategy.&nbsp;<h2>The Negotiation Process: Balancing Financial and Non-Financial Terms</h2>AUTM's multi-part negotiation course series offered guidance on the dynamics of licensing negotiations.&nbsp;First offers set the tone and upper limit for the entire negotiation.&nbsp;Term sheets should avoid surprises by signaling expectations in advance and using margin comments for clarity.&nbsp;Financial terms must be considered in context. If upfront fees are low, higher royalties and milestone fees are needed. If sublicensing sharing percentages are low, guarantees for investment before sublicensing should be required. Royalty structures may be tiered based on cumulative or annual sales, with portions converted to success payments or commercial milestones.&nbsp;Non-financial terms warrant careful attention. For instance, improvement provisions, if included, should be narrowly defined, e.g. limited by inventor laboratory, time period, scope of domination by licensed IP, and funding source. Diligence provisions should include general statements to diligently develop, specific milestone dates, annual maintenance fees, required sublicensing, and progress reports. Termination provisions should balance university interests in reclaiming shelved technology against licensee needs for investment security.&nbsp;<h2>Navigating the Political and Regulatory Environment</h2>University technology transfer offices are operating in an environment of heightened political scrutiny and potential policy change. Conference presenters identified several key issues facing the profession, including potential White House and Commerce Department proposals for a "patent tax" that would require universities to share 50% of royalties with the federal government on federally funded inventions. This proposal represents a fundamental challenge to the economic model that has supported university technology commercialization since the passage of the Bayh-Dole Act in 1980. At the same time, federal research funding itself faces uncertainty, with Congress pushing back against severe research cuts proposed by the current administration, and critical programs like SBIR/STTR operating under extended authorization while awaiting reauthorization by the Senate.&nbsp;These policy pressures underscore the importance of demonstrating the value of university technology transfer. Strategic licensing income helps universities fund research initiatives with reduced government dependency, support faculty development and institutional growth, and position IP for strategic enforcement and business development. As one presenter noted, demonstrating Bayh-Dole Act value is essential in this uncertain funding environment. Universities should proactively engage with advocacy organizations like AUTM to communicate the economic and societal benefits of the current technology transfer system, including job creation, startup formation, and the translation of taxpayer-funded research into products that benefit the public.<h2>Global Patent Portfolio Considerations</h2>Universities with international licensing aspirations must navigate increasingly complex global filing strategies. China's industrial policy system creates competitive and jurisprudential challenges, while patent landscaping serves as a tool for determining which markets warrant attention.&nbsp;Maintaining and monitoring patent portfolios is not a luxury. Monitoring infringement, tracking the impact of AI on search capabilities, and combating sophisticated online piracy require ongoing investment. The European Unified Patent Court system presents both opportunities for efficient enforcement and risks of pan-European invalidation, requiring strategic decisions about opting out or remaining subject to UPC jurisdiction.&nbsp;<h2>Conclusion: Key Principles for 2026 and Beyond</h2>The AUTM 2026 conference reinforced several principles that should guide university IP licensing strategy:Ensure foundational clarity. IP policies must be current, consistently applied, and communicated to all university personnel. Assignment and inventorship should be confirmed before licensing discussions advance.Structure licenses thoughtfully. Specifically indicate and carefully think through royalty issues for the intended path of commercialization for the licensee. Include measured diligence milestones throughout development and into the commercialization period. Draft precise definitions. Protect university interests in potential litigation. Consider the full lifecycle of the technology when negotiating scope.Evaluate licensee partners carefully. Credible business plans, capable teams, and demonstrated funding capacity are non-negotiable prerequisites for exclusive licensing.Leverage software opportunities. Software's efficiency advantages make it a strategic priority for universities seeking faster returns and higher disclosure-to-license conversion rates.Navigate emerging technologies with care. AI and machine learning licensing requires attention to evolving patent eligibility standards, training data provenance, and agreement structures that capture downstream value.Invest in marketing and matchmaking. Universities with dedicated marketing staff execute 35-60% more licenses per disclosure. Programs that connect technologies with entrepreneurial talent can launch companies that might otherwise never form.Think globally, act strategically. International filing decisions, portfolio maintenance, and enforcement capabilities require ongoing attention and investment.By embracing these principles, universities and their technology transfer offices can fulfill their dual mission of generating returns on institutional research investments while ensuring that academic innovations reach the marketplace for societal benefit.<div class="passle-featured-image passle-featured-image-position-bottom"><img src="https://images.passle.net/fit-in/400x400/filters:crop(0,45,2058,1154)/Passle/5f6edd8e8cb62a0bec3e5fd2/SearchServiceImages/2026-02-23-19-55-35-309-699cb0b79b0c9dc0e7a6a25f.jpg" alt="Featured Image" /></div>

core/freeform

Empty rows of modern lecture hall seating with warm natural light streaming in through a large window.

University IP Licensing in 2026: Best Practices and Emerging Considerations from the AUTM Annual Meeting

Related People

You may also be interested in these

Michael Best Welcomes Mark Hanson as Senior Counsel in Intellectual Property Practice

Michael Best Welcomes Michael Shaunessy as Partner in Litigation Practice

Michael Best Welcomes Lance Mueller as Senior Counsel in Real Estate Practice

Related People

You may also be interested in these

Michael Best Welcomes Mark Hanson as Senior Counsel in Intellectual Property Practice

Michael Best Welcomes Michael Shaunessy as Partner in Litigation Practice

Michael Best Welcomes Lance Mueller as Senior Counsel in Real Estate Practice

Slide Menu

Slide Search