“ ‘Penn State and other research universities typically have IP that has been marketed by their tech transfer offices but for a variety of reasons has not been picked up by a commercial entity and therefor sits on the proverbial shelf’, said in Huss in a statement. This auction is an effort to get our IP off of the shelf and in the hands of companies that can use the technology, at very favorable terms and price points. The buyers get the rights to use the IP, and the university gets a financial return. It’s a win-win situation.”A somewhat different narrative explaining the rationale for the auction was given by Mr Neil Sharkey, Interim Vice President for Research. As reported in the Statement announcing the auction, here:
“the novel approach of an online auction was chosen in part to raise awareness among interested parties in business and industry that the University does have licenses available whose commercial applications could prove extremely valuable.” Further-- "[a]s a land-grant institution, Penn State has always strived to pursue research that has real-world impact," Sharkey said. "Our researchers have worked to develop IP that has the potential to add significant value to companies' products and services, but it has no value if people are not made aware of it."
As we all know, a proper patent licence is typically a multi-page document where the respective rights of the licensor and licensee are negotiated (sometimes more, sometimes less) against the backdrop of the particular circumstances of the transaction. Thus, the article states that ‘[t]he winners will have to sign a license agreement with the university.” If that is so, then what exactly is being auctioned with respect to the licence; is it akin to an option on being granted an exclusive licence or is something else intended? The article is not clear. Moreover, what is the process for ultimately negotiating the licence agreement? How much leeway does the winner of the auction have in negotiating the terms and conditions of the licence? Will the extent of this negotiating leeway be taken into account in the amount that the bidders will be prepared to offer? These and other questions cast a shadow on the expected degree of participation by the public and the expected monetary success of the auction. Still, the results of the action bear close attention to see if this auction model will have traction in the marketplace.