Dutch universities update Deal Term Principles
The process of valorising university intellectual property (IP) is a major hurdle for many startup companies. Negotiations often take a long time, do not favour entrepreneurship, and can negatively impact future investment rounds. The new National IP Deal Term Principles 2.0, recently published by the Universities of the Netherlands (UNL), aim to change this by clarifying and speeding up the process. But do they really address the pain points entrepreneurs face?
A though road from science to business
For entrepreneurs, time is of the essence. Bringing a biotech innovation from lab to market is already expensive, risky, heavily regulated, and knowledge-intensive. Much of this knowledge originates in universities, where IP is created and owned. When startups try to license this IP with the university’s Knowledge Transfer Office (KTO), they often encounter lengthy negotiations and complex procedures that are largely shaped by university interests and internal risk management.
What’s new in the deal terms 2.0?
After introducing the Deal Term principles in 2023, thirteen Dutch universities have now published an updated version containing several major improvements. Building on practical experience and feedback from the field, this framework should offer clearer guidance for companies and universities to collaborate effectively and accelerate innovation. Changes include:
- Broader applicability: The framework now also covers employees who remain at the university part-time, not just those who transfer fully to a startup. This is expected to attract more venture builders to spin out university IP.
- Flexible IP compensation: Universities can now choose between equity, royalty or a combination, with internationally benchmarked percentages to help streamline negotiations and align expectations.
- Clearer requirements: The principles provide more detailed guidance on continued use of university IP, including expectations around additional funding and revenue targets.
- Will this solve all valorisation issues?
While the new principles provide more clarity and guidance, significant challenges remain – especially for biotech startups. For example, university medical centers are not included, leaving many relevant biotech patents outside the scope. Moreover, the principles follow a ‘comply or explain’ model, meaning universities are not strictly bound to these principles and can still adjust their terms if preferred. As we continue to explore how these new terms play out for Dutch biotech, we welcome your experiences and ideas – please share them with us so we can keep working towards a more effective approach for biotech startups. And stay tuned for further updates!