Intellectual property commercialisation agreements - guidance

So that we can make sure the research we fund achieves our mission to improve health, we require institutions to manage and commercialise Wellcome-funded intellectual property (IP) in a way that maximises public benefit. 

Our policies on intellectual property and consent and revenue and equity sharing, and our standard grant conditions (sections 4.8 and 8) have more information. 

Key issues 

The following list includes some of the key issues that we expect to see addressed in commercialisation agreements. It is not intended to be an exhaustive list and it will depend very much on the circumstances of the particular IP and the chosen commercialisation route. 

If our consent is required prior to commercialisation (see section on consent to commercialise Wellcome-funded IP below), we will consider these points when assessing consent applications. 

Resources and expertise of the proposed commercialisation partner

The proposed commercialisation partner should have the necessary expertise and adequate resources to exploit Wellcome-funded IP. For example, to be able to take a new drug through the necessary regulatory process to the market place. 

This does not mean that the proposed partner has to have all necessary expertise and resource for all stages of commercialisation at the date of consent, but the commercialisation plan must be realistic. 

For example, it may be prudent to:

  • set a deadline within which a new spin-out company has to raise additional funds or enter into a further commercialisation deal, without which the IP reverts to the institution 
  • provide for IP to revert on insolvency to the extent that is legally possible. 

Diligence obligations

The terms of an agreement commercialising Wellcome-funded IP should place appropriately-worded diligence obligations on the commercialisation partner to make sure:

  • suitable resources are devoted 
  • development is not sidelined or shelved if commercial priorities change. 

For example, the IP may revert to the institution if diligence obligations are not complied with.

Step-in rights on IP

If the institution gives responsibility to the commercialisation partner for filing, prosecuting and maintaining Wellcome-funded IP and the partner fails to do so adequately, or decides to abandon a piece of registered IP, the institution should retain the right to take back that responsibility at its own cost. 

This may be considered to be particularly important for early spin-out companies where financial resources are tight, or where there is a potential application in low- and middle-income countries, but the partner may not wish to maintain patents in these countries. 

Appropriate financial return

While we do not wish to get involved in laying down guidance for the amount of return that an institution should seek to get from commercialisation, we will check that the return is not obviously disproportionate (in either direction) to the institution’s contribution. 

This is to ensure that, as required by charity law, the private benefit to the commercialisation partner is no more than incidental to public benefit arising from the commercialisation of Wellcome-funded IP (through the improvement of human health and contributions back to charitable funds). 

Research licence reserved for the institution and researchers

We generally expect that the institution will reserve the right to continue using Wellcome-funded IP for academic research and teaching so that its researchers’ careers are not restricted. This should be sub-licensable/transferable if the researcher changes institution.


Any delays on publications by the institution or its researchers should be limited to a reasonable time period (typically three months, maximum six months) and only to:

  • allow for filing of new IP 
  • remove information that is genuinely confidential to the commercial party.

Appropriate exclusivity

Where an institution wishes to grant an exclusive licence to a commercial third party, we expect it to evaluate whether exclusivity is the most appropriate way of achieving public benefit. 

We recognise that exclusivity is often required to attract the investment necessary to successfully commercialise Wellcome-funded IP. However, in cases where Wellcome-funded IP underlies a new research field or could act as a fundamental platform for further important work, the public benefit may be better served by a series of non-exclusive or co-exclusive licences to avoid giving one party a blocking position. 

Provisions to address commercialisation agreements in low- and middle-income countries

We encourage institutions to consider including provisions in commercialisation agreements for low- and middle-income countries where appropriate. 

These will need to be negotiated on a case-by-case basis, but examples include:

  • dividing up territories between a commercial and a not-for-profit partner
  • providing for territories to revert to the institution if not commercialised by the commercial partner 
  • requirements for products to be supplied to low- and middle-income countries at or close to cost.

Please see our equitable access to healthcare interventions statement for more details.

Pipeline arrangements

Pipeline arrangements prevent the institution or Wellcome from assessing, on a case-by-case basis, the most appropriate way to commercialise Wellcome-funded IP to achieve public benefit. 

As a result, the institution should not enter such an arrangement unless:

  • it is appropriately limited in time and scope
  • the third party is clearly the most suitable commercialisation partner
  • the institution receives an appropriate return. 

Although we do fund companies directly to carry out translational research, we use different terms and conditions to the ones we use for our standard grants.

Consent to commercialise Wellcome-funded IP 

We maintain a right under our standard grant conditions to review and approve proposed transactions to commercialise Wellcome-funded IP before they are entered into by institutions.

However, having conducted a long-term consent waiver trial, we have determined that not-for-profit universities and research institutions are typically able to ensure themselves that such transactions deliver adequate public benefits. The delay caused by us reviewing and consenting to proposed agreements prior to their signature typically far outweighed the value of those reviews. We have therefore waived the requirement for prior consent for not-for-profit universities and research institutions funded under our standard grant conditions. See our consent and revenue and equity sharing policy for further details.

We will instead review details of the transactions of Wellcome-funded IP by such institutions on an annual basis, when reviewing their Consolidated IP and commercialisation reports. We will still provide consent for those transactions, retrospectively, as part of our revenue and equity sharing agreement with the institution. Provided these transactions are reported fully to us, comply with our intellectual property policy, and appropriately address the issues listed above, the waiver of prior consent will remain in place.

If we have concerns over a transaction, we will raise this with the relevant institution. It will not affect the validity of that transaction. However, it may lead to us withdrawing the prior consent waiver for the specific institution in question until we are satisfied that all their future transactions will fully comply with our requirements. The institution would then have to seek formal written consent from us before entering into any further transactions.

We will give guidance on the proposed terms of a particular transaction, on request. However, we will only give our formal consent on the basis of the final agreement.

Companies must always obtain our prior consent before commercialising Wellcome-funded IP.

More information 

Contact us 

Contact our information officers if you have a question about our funding policies.

Phone us on+44 (0)20 7611 5757

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