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INSTITUTE OF TECHNOLOGY VALUE CREATION

Request Technology Implementation Contract

  • After mutual discussion regarding important details of the technology transfer, the research lab must turn in the “Technology Implementation Contract Request” to the affiliated department head or department head of the affiliated department of the chief researcher (director of the research center, project director, or etc.) for their approval before submitting it to the department in charge of technology implementation contracts.
  • The “Technology Implementation Contract Request“ must include the name of the research project and technology produced.
  • According to Article 4 (preliminary negotiations) of the “Technology Implementation Contract and Use Regulations“ if KAIST is the sole or joint owner of the technology and requests to use or apply such technology, then the chief researcher of the corresponding technology must discuss the following in depth with the user and department in charge of technology implementation to determine the appropriate royalty and enforcement period: Level of Technology, Stage of Technological Development, Commercialization and Economic Feasibility of the Product, Relative Difficulty of Application, Technology Use and Transfer, Training Time, and etc.
  • If the person in charge of technology transfer finds a possible user, the “Technology Implementation Contract Request” need not be drafted.

Contract Review and Conclusion

  • Upon completion of mutual negotiations regarding the technology transfer, the “Technology Implementation Contract Request” must be drafted and submitted to the department in charge after receiving approval from the department head of the chief of research’s affiliated department (or director of the research center, associate vice president, director of research, department head, and etc.)
  • Prior to the implementation of the “Technology Implementation Contract Request” the title of the research project must be specified and filled out.
  • According to Section 4 (Prior Negotiations) of the “Technology Transfer Contract and royalty Use Regulations,” if there is a request to utilize technology owned (or jointly owned) by the Science and Technology Institute, the chief of research of the relevant technology must take into consideration the level of technology, stage of technological development, marketability and economic feasibility of the product, difficulty of application, and technology implementation and training to determine the appropriate royaltyl, time of enforcement, and etc. must be negotiated in-depth with the user and department in charge of the technology implementation contract.
  • According to Section 4 (Prior Negotiations) of the “Technology Transfer Contract and royalty Use Regulations,” if there is a request to utilize technology owned (or jointly owned) by the Science and Technology Institute, the chief of research of the relevant technology must take into consideration the level of technology, stage of technological development, marketability and economic feasibility of the product, difficulty of application, and technology implementation and training to determine the appropriate royaltyl, time of enforcement, and etc. must be negotiated in-depth with the user and department in charge of the technology implementation contract.

royalty Collection

  • The royalty must be paid in cash according to the Technology Implementation Contract.
  • The royalty may be paid through fixed royalty payments and/or advanced payments, and for a certain period the running royalty or minimum royalty is to be collected in case of fluctuation in royaltys.
  • If the royalty is paid using fixed payments, the payment may be made in lump-sum, or if there is a justifiable cause the payment made be paid in installments (maximum of 3 installments) within a reasonable period.
  • If the running royalty method is chosen to pay the royalty, the rule is that the product of the stipulated royalty percentage(%) and the total sales of all products (all assets with value including products) that utilize the technology will equal the royalty. However, if the contracting party stipulates that the product of the net sales and fixed royalty percentage (%) will equal the running royalty, then the items excluded from the total net sales must be clearly stipulated before concluding the contract.
  • If the running royalty method is chosen as the method of payment for the royalty, the basic retainer fee may be paid at a fixed rate from the prepayment of the royalty.
  • The method of determining the minimum royalty is through fixed payments within a fixed limit or if the assumed minimum sales amount does not reach the set minimum, the concerned sales amount is considered to have been achieved then the amount is determined. Furthermore, if the minimum royalty generally permits sole license rights, exclusive license rights, and other rights the school will request such from the user.
  • After the royalty has been collected the royalty deposit receipt must be scanned and registered through PPMS.

royalty Allocation

  • From the collected royalty, the fixed rate (50%) is the standard amount for incentive allocation to each inventor, according to the “royalty Incentive Payment Request”.
  • The chief researcher or inventor must receive the “royalty Incentive Request Form” from the department in charge of technology implementation contracts and submit the original copy to the department within 15 day after having each inventor fill out and sign the form.
  • Upon registration of the “royalty Incentive Deposit Request Form,” the department in charge of technology implementation contracts must make deposits to each inventor within 30 days.

Post Management

  • The person in charge of technology transfer must frequently check to see if the technology transfer/implementation fee (technology retainer fee, advanced payment of the royalty, fixed royalty, minimum royalty, running royalty) has been deposited as stipulated in the contract.
  • Upon implementation of the technology, the person in charge must frequently check to see if the patent maintenance fee is being deposited by the user throughout the implementation period. If there is a default in payment a press for payment and warning of possible termination of the contract, in accordance to the contract, must be transmitted via e-mail. If the user still does not make proper payment within 30 days of the notification, a written notice of the termination of contract (including evidence) shall be transmitted to the user.
  • If the fixed royalty is paid in installments the user must submit the “Fulfillment Guarantee Insurance Policy” by the stipulated date and the user is allowed up to 3 default payments. If this is breached a 30 day grace period is given, and if the payment is still in default an e-mail must be sent warning the user of the contract termination, then a written notice of the termination of contract (including evidence) will be sent.
  • The user is requested to be notified of the termination of contract 30 days before the termination date for prior verification.
  • According to the full faith and credit clause on the contract, the user is requested to report the generation of sales for verification and a written request with the date production began, date of occurrence of sales, the year profits were generated is to be requested. If such is not fulfilled, the profit generated by the user will be retroactively bundled and redemption will be arranged. Furthermore, if the user’s sales need to be verified, an on-site investigation will be carried out.
  • An external institution or expert will also participate in the on-site investigation to verify sales.
  • The calculation and confirmation of running royalty royaltys will abide by the following standards.
    • The user must submit an implementation report including actual payment and basis of calculation with documentary evidence with the audit report issued by an accounting firm. Furthermore, if necessary, accounting and tax documents necessary for verification and verification documents from the CPA must be requested from the user.
    • The annual running royalty will be determined following discussions after the conclusion of 1 fiscal year depending on the amount of sales indicated on the profit and loss statement drafted in accordance with recognized impartial business accounting standards and standard financial statement drafting methods (if the sales amount cannot be determined by the profit and loss statement in accordance to the contract, the sales statement will be used as the standard). The appointed date of payment of the yearly running royalty shall be within 30 days the running royalty payment date has been finalized.
    • Relevant accounting documents for the verification of basis of the running royalty royalty calculation, an examination may be conducted in person or by a representative, and in this case if there is a difference in amount due to accounting errors by the user, the difference in amount is to be collected immediately. Furthermore, if the difference in the actual payment and the amount due is over 5% due to errors, all investigation expenses must be paid for by the user.
    • If the sales amount cannot be determined, it will be decided in accordance to a fair and legitimate investigation.
  • If the implementation contract for exclusive rights is concluded, the school will provide the user with requested and necessary documents for the registration for establishment of rights, but the user must pay for all expenses that arise from the registration process.