Common Negotiation Areas

NC State spells out the details associated with university-industry sponsored research agreements.

Common negotiation areas include intellectual property, licensing terms, liability and other critically important elements.

Ownership of Intellectual Property that Results from the Research

When a company sponsors research with NC State University, ownership of the resulting intellectual property (IP) follows US patent law regarding inventorship.  Generally, the company owns what it creates, the university owns what it creates, and if the two parties create the IP jointly, they own it jointly.  Specific management procedures and commercialization right for jointly created IP and University created IP are described in the research agreement.  These agreements are typically negotiated once a specific project or research initiative has been agreed upon between a sponsor and the University and are based on the scale and scope of partnership being sought, the type of research being conducted and researchers’ input. NC State has a long history of engaging with industry sponsors and has created flexible IP models to work with companies toward mutually beneficial IP arrangements.

common-negotiation-areasTransfer of Ownership of University-owned IP and Ownership of all of the Results

See response to #1 above.  Often companies often ask why they can’t own all of the results and intellectual property since the company is paying for the research being conducted.  In general, all University research agreements must be in accord with NC State’s mission of education, research and economic development.   In addition, as a non-profit tax-exempt educational institution, various laws, including the Bayh-Dole Act and the Tax Reform Act of 1986, place certain restrictions on transferring ownership of University-owned intellectual property.

Publication of Information Generated from the Sponsored Research

NC State is a publicly funded research institution and freedom to publish is essential to its academic mission.  When requested industry sponsors will be given a limited amount of time to review publications prior to public disclosure to ensure the publication does not contain any of the sponsor’s confidential information and that any patentable inventions can be protected prior to publication.  Publications may be delayed to allow for patent applications to be filed but delays cannot impact any academic progress (e.g., a student’s ability to graduate).

Licensing Terms

The license terms described in this document are based on NC State’s extensive experience in negotiating industry-sponsored research agreements; each project has unique elements and requires specific negotiations to meet the needs and policies of both parties. It is important that both parties realize benefit from the engagement and the sponsors have some options to use sponsored research results to meet their commercialization goals.
Traditional Model: NC State’s traditional model is the most commonly used approach by public universities. NC State provides the sponsor with an up-front, non-commercial, non-exclusive royalty-free (NERF) license to use the intellectual property generated from the project solely for the sponsor’s internal research and development use.  An option to negotiate for an exclusive commercial license is also granted, but the terms of the commercial license (exclusive or non-exclusive) are negotiated after the intellectual property is developed.  This model is often used for fundamental research; it shortens the research agreement negotiation process; and allows both parties the benefit of inventions as opposed to speculative scenarios around research that has yet to be conducted.
Non-traditional Models: Based on years of successfully working with industry sponsors, NC State has developed multiple licensing approaches to increase a company’s certainty in the ability to use the intellectual property generated from sponsored research towards their research and commercial goals. NC State uses a range of non-traditional mechanisms including commercial NERF licenses, exclusive licenses where the terms are negotiated after the intellectual property is developed and exclusive licenses with pre-set terms. The inclusion of these non-traditional license terms is at the discretion of the university, depends on whether there is other funding involved and typically lengthens the negotiation process.


NC State signs confidentiality agreements (CDAs) to protect both the University’s and a company’s proprietary information. The CDA is between the University and the company and covers all NC State employees. In addition, NC State’s sponsored research agreements include confidentiality terms. When faculty are involved with a company that has a CDA with the university, they are notified of the terms, provided a copy of the agreement and must acknowledge that they have read and understood the agreement.


As an agency of the State of North Carolina, NC State University is prohibited from entering into any agreement under which the University would be obligated to “hold harmless” or indemnify a third party, since such an agreement would be a waiver of the State’s sovereign immunity, which is prohibited by the Constitution and laws of the State of North Carolina. In addition the University cannot transfer any intellectual property to an industry sponsor unless the sponsor agrees to indemnify the University from any use of said IP, which would be beyond the University’s control.


NC State is delivering results to the industry sponsor; therefore, NC State has no responsibility for the product, process or service that may be developed through use of the research results IP, which would be beyond the University’s control.


Due to the nature of research, in general universities do not provide any warranties on the results of a research project, since the outcome of the research cannot be guaranteed.


PLEASE NOTE: The negotiation of research agreements and any intellectual property terms are the responsibility of NC State University’s office of Sponsored Programs and Regulatory Compliance (SPARCS) an Office of Technology Transfer (OTT) under the advice of the Office of General Counsel.



Get started today by calling 919.515.7036 or by emailing us at