RALEIGH — A multinational chemical company has signed a $10 million deal with N.C. State University that school leaders hope will become a model for streamlined research partnerships that attracts other companies.
The deal with Eastman Chemical Co. sets the terms for collaboration across a broad range of disciplines and different schools within the university. It also sets out a blanket plan for sharing revenue from all resulting discoveries so that terms for each don’t have to be negotiated separately.
“We’re finding a lot of our industry partners are really interested in these sorts of agreements,” said Terri Lomax, NCSU’s vice chancellor for research, innovation and economic development.
The deal gives Eastman the commercial rights to any products that result from the research with sales of less than $20 million. For sales beyond that amount, NCSU receives royalties, Lomax said.
The university hopes to soon unveil a generic policy outlining how such deals should work, she said.
Having the revenue terms settled in advance is good for the company in part because it means Eastman won’t have to worry about heavy costs early in the life of an invention before it generates revenue, said Greg Nelson, the chief technology officer at Eastman.
It also means the university will gain by being able push more new products and technologies into the marketplace – one of its missions – and do so quickly, he said.
Eastman will provide the money over a six-year period to fund the partnership and open a lab on NCSU’s Centennial Campus.
The partnership will involve research in materials science, chemistry, chemical engineering and textiles among other areas, said Bob Clemens, Eastman’s vice president of corporate technology.
In the past few years, NCSU has placed more emphasis on creating new companies and new products to boost the state’s economy.
In 2010, Chancellor Randy Woodson announced an initiative to double the number of private companies NCSU spins off every year, and to boost by 50 percent annually the amount of grants and contracts its faculty and staff win to fund research.
The emphasis on such arrangements apparently paid off in the Eastman deal.
When Eastman began considering a research partnership, it considered every university in the nation, then narrowed the field to 10 finalists before picking NCSU, said Clemens.
The ease of dealing with the contract and the new approach to the terms played a big part in its selection, said he and Nelson.
“I haven’t seen a more pleasant negotiation in 25 years in the industry, and it was obvious that N.C. State is really motivated to make public-private partnerships work and get more innovative products out there to help the economy,” Nelson said.
NCSU’s peer universities, he said, would likely use the deal as a model to compete for similar arrangements with corporate partners.
Several aspects of the deal make it a more nimble arrangement for both sides, said Lomax.
Having the conditions pre-negotiated for commercial rights eliminates the lengthy negotiations that can arise, she said. Not every promising product turns out to be marketable, so this can eliminate months of wasted wrangling.
The deal also offers up-front protection for the commercial rights to things Eastman has already created.
That gives the company confidence that it can share important inside knowledge with NCSU researchers without risk that it will be obtained by competitors.
Also, it gives the company the ability to handle the legal aspects of obtaining intellectual property rights for the fruits of the partnership, such as patents.
That’s something that companies often feel they can handle more quickly than universities, meaning that discoveries are protected sooner, Lomax said.
Initially, the company’s presence in Raleigh will be small – just four people to work with the NCSU scientists. Its lab, which it expects to open early next year, can accommodate about 10, and it hopes to outgrow that space, Clemens said.
Under the deal, visiting Eastman scientists can work at NCSU and university researchers can do the same at Eastman facilities. NCSU students are also expected to participate in the projects that arise from the partnership.