by Becky Mahurin

In FY 1995 MSU faculty and research professionals performed $8.17 million in privately sponsored research. This work was approximately one-fourth of the University's total extramural research. The high percentage of sponsored research from the private sector implies that MSU is performing commercially relevant research and is providing important contributions to the competitiveness of the companies for which it works.

The University has some ground rules by which we transfer the results of this research. We have a Standard Sponsored Research Agreement that we implement to provide the avenue for ultimately licensing the technology to the sponsPs agreement reflects some basic philosophy we have regarding the appropriate process for transferring such technology. First, we believe it is appropriate to maintain title to the technology developed at MSU and to retain the opportunity (for both MSU and the inventors) to derive a revenue stream from the technology in the event that it is successfully commercialized. In addition, we feel that it is imperative that the investigators at MSU retain the right to publish the work performed under this agreement and to be allowed to utilize the results for educational purposes.

Companies sometimes argue that they have "paid for the technology" through the sponsorship of the project and, therefore, should not be obligated to license or provide a royalty stream. In fact, companies do not pay the "full freight" on projects that they sponsor. They do not fully reimburse for facilities, equipment or for the expertise of the investigators involved. The University bears those costs. Additionally, most of our researchers have federal dollars in these projects at some point. In such cases, federal law prohibits the University from giving away the technology thus developed.

The Standard Sponsored Research Agreement provides that the sponsor, for the life of the research plus usually one year, retains the option to exercise a license to the technology. In exchange for such an option, the company agrees to reimburse MSU for patenting expenses and to negotiate for a royalty-bearing license. This model, utilized by most research institutions across the nation, works well to protect the interests of both the company and the University.

If you have questions about the Standard Sponsored Research Agreement, call me at 994-7868.

Becky Mahurin
Director of the Technology Transfer Office at MSU

© 2000 Montana State University-Bozeman
Discovery March 1996

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