Selling University-Developed Software and Services
All the external sales procedures are applicable to selling University developed software and services. This procedure is applicable only to the specific activity of selling University developed software and services. This procedure in not applicable to other external sales activity.
University-Developed Software Services
Software that is developed as a result of an academic activity or project may be considered for commercialization. The path of commercialization depends on the intent of the transaction and whether the Intellectual Property (IP) ownership rights will be transferred externally with the software. If the University will retain IP rights the activity is classified as an external sale and must be facilitated via the External Sales Office or the Office for Technology Commercialization. This type of activity is most commonly referred to as Software as a Service (SaaS), End User Licensing and Annual Support.
If the intent of the transaction is that IP rights will be transferred or licensed externally the activity must be classified as a Commercialization of Intellectual Property and must follow Board of Regents Policy: Commercialization of Intellectual Property Rights and related processes and procedures facilitated by the Office for Technology Commercialization.
For best results, or if the future strategy of the University-developed software is unknown, discuss the transaction with both the Office for Technology Commercialization and the External Sales Office. Refer to the process diagram that highlights decision points for the interrelatedness of this type of activity .
It is highly recommended that authors of academic work opt into a formal agreement with the University prior to considering the external sale of University developed software and services. Authors of academic work will be responsible for developing or procuring external services to create their own independent agreements.
Handling of Transaction
SaaS, End User Licenses and Annual Support transactions treated as external sales are considered high risk; therefore, the unit conducting the activity must follow Administrative Procedures: Conducting External Sales Activity, Establishing External Sales Accounting Structure, Establishing External Sales Rates, Establishing External Sales Agreements and Unrelated Business Income Tax Procedures, and Collecting and Remitting Minnesota Sales Tax on External Sales Transactions.
In addition to the above referenced procedures, specific action or additional procedures are required as follows:
- Conducting External Sales Activity – during the approval process, the unit must engage with the Office of Information Technology related to both technology security and infrastructure capabilities.
- Establishing External Sales Rates – rates must fully recover all reoccurring and maintenance costs required to support the activity.
- Establishing External Sales Agreements – use the specific standard contracts under development by the Office of General Counsel developed for SaaS, End User License and Annual Support activity.
Units must comply with all applicable information technology policies and procedures referenced under Related Information in the Policy.
Units are required to use University standard processes and technology to support University-developed software technology. The standard processes and technology include but are not limited to; billing, accepting credit cards, etc. Refer to the appendix with the standard processes and contact information .
If the University-developed software uses another entity’s software technology, a licensing agreement is required. All licensing agreements require Office for Technology Commercialization review.
Depending on level of activity and scope of customer base, Office for Technology Commercialization and External Sales Office will meet with units conducting this type of activity on a reoccurring basis. The objective of the review is to highlight any programmatic, financial, technological or market impacts related to the original strategy and determine if strategy changes are in the best interests of the University.
If it is determined that an external technology licensing exit (sale of technology) is in the best interest of the University, Board of Regents Policy: Commercialization of Intellectual Property Rights and related Office for Technology Commercialization procedures take precedence. Contractual and financial obligations related to existing external sale agreements could impact financial distribution of any commercialization proceeds and will be resolved according to the Appendix: Recovery of Project Costs for Commercialization.