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The Ins and Outs of In-Licensing

September 30, 2014

Connecticut Innovations

In the research, development and design of new products, an increasing number of startups are turning to “in-licensing” technology from universities and other institutions as a means of getting products to market quicker while reducing both risk and cost in the early stages of development.

Rapid progress in product development also allows for financing opportunities beyond what is possible for most technology startups. An increase in capital, in turn, can help support more aggressive development of novel technologies (both internally and by way of additional in-licensing arrangements).

While in-licensing can result in a successful “marriage” between licensor and licensee, it’s important for the parties to recognize that – just like in any marriage! – they often come to the table with different (and at times conflicting) experiences, incentives and goals. Therefore, a better understanding of key issues involved in structuring and negotiating the in-licensing arrangement will help the parties better establish a clear framework for a mutually beneficial relationship.

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