Startup Obligations

After you have licensed the technology, your company must meet certain milestones and obligations. Financial obligations may include an upfront fee, patent reimbursement, milestone fees, ongoing royalties or grant of equity. WARF also requires the company to submit royalty reports on a quarterly basis once product sales begin. The royalty rate normally is calculated as a percentage of the selling price of the products.

Finally, the agreements may include the following development obligations:

  • Obtain an expert, independent evaluation of the invention
  • Develop products for sale in the commercial market
  • Provide WARF with a development plan
  • Provide WARF with written development reports
  • Hire a qualified chief executive officer (CEO) within a specified period of time
  • Obtain an agreed upon amount of financing within a specified period of time
  • Identify a date of first commercial sale
  • Provide audited financial reports on a regular basis
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