What Is An Option And Can A Startup Take That Instead Of A Full License?

An option agreement is nothing more than a promise from Yale not to license the technology to another party.  It is often used to reserve a “right” to license an invention while a company evaluates the technology, explores funding opportunities and raises the capital needed to fully license the rights in question. Startups that are eligible for the Startup License can receive a “no cost” option to the technology, provided they are engaged in one of the many business development programs at YEI.

For therapeutic companies, option agreements often include financial consideration to Yale in order to reserve those rights, particularly if the startup seeks Yale’s commitment to a set of negotiated terms. Startup companies sometimes prefer this route and OCR may grant options for any time period up to one year in duration, most often in 6-month increments.

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