Patent Assistance Program

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1 REQUEST FOR APPLICATIONS (RFA) Patent Assistance Program Purpose: The Patent Assistance Program (the Program ) provides matching funds to help start-up companies pay on-going patent expenses for technologies licensed from Maryland s Universities. For the purpose of this program, on-going patent expenses are patent expenses incurred by the university following the effective date of a license agreement and subject to reimbursement by the licensee under the terms of the license agreement. Shortly after completing a license agreement for a start-up company, entrepreneurs often struggle with raising the funds needed to pay on-going patent expenses and to pay for broad patent protection on licensed technologies. Moreover, universities have constrained patent budgets and must consider an entrepreneur s ability to pay ongoing patent expenses before engaging in license negotiations. In an effort to help address these challenges, the Program will: Incentivize entrepreneurs to license university technologies by reducing their obligation to pay licensing costs associated with patent expenses incurred for 18 months after the effective date of a license agreement; Help start-up companies maintain or expand the breadth of patent coverage for licensed technologies by increasing the funding available to maintain licensed patent applications and patents and broaden their coverage; Incentivize universities to license their technologies to start-up entrepreneurs due to the increased likelihood of receiving reimbursement for on-gong patent expenses; and Increase the number of university start-up companies in Maryland. Eligibility: Maryland start-up companies, which are new companies that are dependent on technology licensed from a university in Maryland for their initiation (and therefore meet the Association of University Technology Manager s [AUTM s] definition of a Start-up Company ), are eligible for an award under the Program. The company s license agreement with the university must have a provision requiring the applicant company to reimburse the university for patent expenses incurred after the effective date of the license agreement. Start-up companies may not use money from any other Program as a match. Patent Assistance Program Page 1 of 6 Version 2.0 1/17/2013

2 Award Amount: TEDCO will make awards of up to $10,000 over a period of 18 months following the effective date of a license agreement for payment of half of ongoing patent expenses owed to a Maryland university under the license agreement. Award Mechanism: Program awards are made in the form of a grant. Company Match Requirement The applicant company must match (1:1) the funding received through a Program award in support of the on-going patent expenses incurred. This match must be paid to the university for reimbursement of patent expenses as required in the license agreement. Applying for a Patent Assistance Program Award: Applications for a Program Award can be submitted to TEDCO at any time. Completed applications received by the first (1 st ) of each month will be considered for the following review cycle. The full review cycle begins on the first day of each month and takes approximately 30 days. All applications must be submitted using TEDCO s on-line submission system, which can be accessed at: Application Components: There are three components to the Program application: (i) a form with General Application Information, (ii) an Executive Summary of the company s business plan, and (iii) a Letter from the Technology Transfer Office providing the date of the license, or the status of the negotiations, and a listing of the licensed patents. I. The General Application Information is entered directly into the on-line application form and includes: Official company name, address, etc.; Contact name, title, phone number, address; A one-paragraph, non-confidential description of the company; and Key words that describe the company/licensed technology. Patent Assistance Program Page 2 of 6 Version 2.0 1/17/2013

3 II. The Executive Summary may not be more than 5 pages (one-sided) in length, and should have at least one inch margins, a 12 point font, and each page should be numbered. Applications not meeting these requirements will be rejected and returned after an initial review. The Executive Summary should contain the following sections: Header Information: The first page of the Executive Summary must include the name of the applicant company, the name of the company s official contact person with their phone number and address, and the name of the university with which the company has, or is in the process of negotiating, a license agreement at the top of the page. This information should match the information included in the General Application Information section in the on-line application. Problem/Opportunity Description: This section should describe the problem or market opportunity that the company will be addressing. A summary of the current approaches for addressing the problem or opportunity and the limitations of these approaches should be included. Product/Service Description: The company s technology and anticipated product offering should be described including how it specifically addresses the problem or market opportunity described above. This section should include the product s state of development, how much time and investment it will take to get to an initial product launch, and the importance of the licensed patents in preventing others from selling similar products. Market Description: The size of the market opportunity should be identified along with a brief summary of any industry trends that might have an impact on the company. The market should be properly segmented and a brief description of any initially targeted segments should be provided with a rationale for its selection. Competitive Analysis: All competing technologies and products should be described as part of a competitive analysis. Applicants are encouraged to include comparison tables and other graphics for comparison. Patent Assistance Program Page 3 of 6 Version 2.0 1/17/2013

4 Marketing and Operations: The company s general approach to product development, manufacturing, and marketing should be described include cost requirements and development timeline. If the company anticipates partnering for manufacturing and distribution, potential partners should be identified and a strategy for establishing the partnerships should be included. The company should also include a description of the financing that will be needed and the strategy for fundraising. Growth Projections/Financials: The company should provide a brief summary of a five-year revenue, expense, and profit projection in a simple table. The company should also provide a listing of any funding received by the company and/or the source of funding for the required match of patent expenses. General financial assumptions should also be included along with employee growth projections. Management Team: The key managers, board members, and/or advisors should be described briefly along with their level of commitment or role with the company. III. A Letter from the University Tech Transfer Office stating that the company is in negotiation for licensing the described technology, or that it has been licensed, should accompany the proposal. The letter must include a listing of the patents and patent applications that are/will be licensed including their serial number or issuance number, as applicable; the filing date; the title of the patent; and the assignee(s), if different than the university providing the letter. Review Process: Program awards will be made on a competitive basis. A review process will be used to evaluate all proposals. The process includes two distinct steps: a Detailed Review and a Final Decision. Detailed Review: Applications will be reviewed by a committee, which consists of TEDCO staff and outside reviewers from the business community. The reviewers will make a recommendation to fund or to reject the application based on the criteria described below. A reviewer may contact applicants during this process if questions arise. Patent Assistance Program Page 4 of 6 Version 2.0 1/17/2013

5 Final Decision: All review committee recommendations will be taken to TEDCO s President/Executive Director for a final review and decision. Once a final decision is made, the applicant will be notified. Actual awards will be made subject to the execution of a license agreement and a formal Closing Process comprising the execution of a grant agreement, as further described below. Review Criteria: The Review Committee will make its recommendations using the following general criteria: Completeness of the Application: The reviewers will consider how thoroughly the applicant has completed each of the sections of the Executive Summary. This is critical for TEDCO s review committee to make a proper assessment of the applicant company. Strength of the Application: The review committee will also assess how convincingly the applicant describes the business opportunity and the company s likelihood of success. As part of this process, the review committee will assess the potential economic impact of the company in the State of Maryland. Assessment of Need: The review committee will also take into consideration the company s need for assistance with paying on-going patent expenses. Closing Process: Once an application is approved for an award, the program manager will so notify the applicant. The applicant will then have up to ninety days to complete the license, if not already executed, and execute the grant agreement (the Closing ). The Closing will be managed by TEDCO s appointed counsel. The applicant will be asked to provide a list of documents for the Closing including the following: A certificate of good standing from the Maryland Department of Assessments and Taxation dated no more than 30 days prior to the Closing Date AND from the State in which the corporation is organized, if other than Maryland; Patent Assistance Program Page 5 of 6 Version 2.0 1/17/2013

6 A copy of its Articles of Incorporation & Bylaws (for corporations) or Articles of Organization & Operating Agreement (for LLCs), as applicable; and Any other information necessary to complete a grant agreement and any associated documents. The TEDCO Patent Assistance Program grant agreement can be found at the following link: A Closing must occur within ninety days of the date of the award notification. Award Payments: Upon successful completion of the Closing, the applicant may invoice TEDCO for 50% of the cost of on-going patent costs incurred following the effective date of the license up to $10,000 total and within 18 months of signing the license. Invoices sent to TEDCO should include (i) a letter to the company, or an invoice, from the university referencing the license and the obligation to reimburse patent expenses, and (ii) copies of the invoices from the law firm or equivalent from an internal university patent group. Payments by TEDCO will be made to the company with a copy of the correspondence to the university. Reporting Requirements: As a condition of accepting an award from TEDCO, the applicant will be required to submit periodic reports, as follows: Financial Reports. For a period of 6 years following the award date, the awardee shall provide TEDCO with annual Financial Reports, which include an annual Income Statement and Balance Sheet, complete State and federal income and payroll tax returns, and other information as might be requested by TEDCO. Program Manager Information: Inquiries regarding the Patent Assistance Program should be directed to: Linda Saffer, Ph.D. lsaffer@tedco.md Patent Assistance Program Page 6 of 6 Version 2.0 1/17/2013

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