Evaluation Agreement

An evaluation agreement (sometimes called an evaluation license) is a short-term, narrowly-scoped contract that a university or research institution's technology transfer office (TTO) uses to let a prospective licensee test a specific technology — a device, material, dataset, or piece of software — before either party commits to a full commercial license negotiation. What makes an agreement an evaluation agreement, rather than something else, is the combination of: (1) a limited internal-use-only purpose (testing, benchmarking, or feasibility assessment — not manufacturing, sale, sublicensing, or use in a marketed product); (2) a short, fixed term (commonly 90 days to one year, sometimes renewable once); (3) non-exclusivity as the default, since the institution is not yet committing the technology to any one party; and (4) little or no financial consideration, since the point is to let the evaluator decide whether the technology is worth licensing at all, not to monetize use during the trial itself. Many evaluation agreements also include, or are paired with, confidentiality terms and a right of first negotiation or option period for a subsequent full license.

ByCASRAI Editorial Board

· Last updated 18 Jul 2026

Worked examples

Is an instance

A university TTO ships a prototype biosensor to a medical device company under a six-month, royalty-free evaluation agreement. The company may run internal validation testing and report results back to the TTO, but the agreement expressly excludes any right to sell, distribute, or incorporate the sensor into a commercial product; if the company wants to commercialize it, the parties must separately negotiate a <a href='/guides/license-agreement-structure'>license agreement</a>.

Is an instance

A startup requests access to university-developed software before committing to a purchase. The TTO grants a 90-day, non-exclusive evaluation license permitting internal testing on the startup's own systems only, with no right to modify, redistribute, or embed the code in a shipped product, and no source code escrow or maintenance obligations of the kind a full <a href='/dictionary/term/software-license-agreement'>software license agreement</a> would include.

Looks similar, but isn't

Not an instance

A signed contract granting a company the right to manufacture, use, and sell products incorporating a university's patented technology, in exchange for royalties, is not an evaluation agreement — it is a full <a href='/guides/license-agreement-structure'>license agreement</a>, even if it happens to run for a short initial term or start with a low royalty rate. The dividing line is the scope of rights granted (commercial exploitation vs. internal testing only), not the length of the term or the dollar amount involved.

Not an instance

A one-page agreement that only restricts a company from disclosing confidential information it received during a site visit, without granting any right to use, test, or evaluate a technology, is a <a href='/dictionary/term/confidentiality-agreement-nda'>confidentiality agreement (NDA)</a>, not an evaluation agreement. An NDA controls information flow; it does not itself authorize any use of the technology described — a company under NDA alone still has no contractual right to actually run, test, or benchmark the technology unless a separate evaluation agreement (or a use-rights clause added to the NDA) grants that right.

An evaluation agreement is the document a university technology transfer office (TTO) uses to authorize a prospective licensee, collaborator, or customer to test a specific technology for a limited purpose and a limited time, without granting the broader commercial rights a full license agreement would confer. It sits at a specific stage of the tech-transfer pipeline — after an invention disclosure has been made and, often, after a non-disclosure agreement (NDA) has already been signed to let the prospective licensee even see enough about the technology to decide whether it’s worth evaluating — and before any due diligence questionnaire or full license negotiation begins.

Why institutions use a separate evaluation agreement

Without an evaluation agreement, a TTO faces an awkward choice: either let a prospective licensee test a technology with no contract at all (leaving the institution’s IP unprotected and giving the evaluator no clear legal basis to even run the tests), or jump straight into negotiating a full commercial license before either side actually knows whether the technology performs as expected. An evaluation agreement resolves this by granting just enough — a narrow, temporary, non-exclusive right to test — to let both sides make an informed decision about whether a full license is worth pursuing, without either side committing prematurely to commercial terms, royalty rates, or exclusivity.

What an evaluation agreement typically covers

Limited grant of rights. Internal testing, benchmarking, or feasibility assessment only — explicitly excluding manufacture, sale, sublicensing, distribution, or incorporation into a product the evaluator sells to others.
Defined evaluation period. A fixed term, commonly 90 days to one year, after which the evaluator must either return or destroy any physical materials or software provided, cease use, or move to a full license.
Non-exclusivity. The institution generally remains free to offer the same technology for evaluation, or license it, to other parties during and after the evaluation period, unless the agreement specifically negotiates a short exclusivity window.
Nominal or no fee. Many evaluation agreements are royalty-free or charge only a small administrative fee, since the purpose is to enable a licensing decision, not to generate revenue during the trial.
Confidentiality terms. Either incorporated directly into the evaluation agreement or carried over from a separate, already-executed NDA that typically precedes it.
No implied license or option, unless stated. An evaluation agreement does not, by itself, obligate either party to enter a full license afterward. Some agreements add an explicit right of first negotiation or a time-limited option, but that has to be a separate, deliberately negotiated clause — it is not automatic.
IP ownership and improvements. A clause clarifying that the institution retains ownership of the underlying technology, and addressing who owns any improvement or new invention the evaluator makes while testing it — a point that becomes contentious if evaluation uncovers a genuinely new, jointly-relevant invention.

How an evaluation agreement differs from an NDA

An NDA and an evaluation agreement answer different questions and are frequently used together rather than as alternatives. An NDA controls the flow of confidential information — it restricts what the receiving party can disclose or do with information it learns, but it does not itself grant any right to use, test, or operate a technology. An evaluation agreement grants a limited use right — the right to actually run, test, or benchmark the technology itself, subject to the scope and term limits above. In practice, many TTOs sign an NDA first, simply to permit a candid technical discussion about whether an evaluation is worth pursuing at all, and then sign a separate (or combined) evaluation agreement once both sides agree an actual hands-on trial makes sense.

How an evaluation agreement differs from a full license agreement

The core distinction is scope of rights, not size or duration. A full license agreement grants commercial rights — to make, use, sell, or sublicense products incorporating the technology — typically in exchange for royalties, milestone payments, or equity, and typically for the life of the underlying patent or a substantial fixed term. An evaluation agreement grants none of that: no right to sell, no right to build a commercial product around the results, and no royalty stream, because its only purpose is to let the evaluator decide whether those commercial rights are worth negotiating for. Institutions structure it this way deliberately: granting commercial rights before a licensee has even confirmed the technology works as claimed would put the institution at a negotiating disadvantage, and would give the evaluator no reason to move promptly to a full license once they already had de facto commercial access.

For software specifically, CASRAI’s taxonomy of software license types covers the evaluation/trial license as one point on the broader deployment-model spectrum (alongside site, enterprise, per-seat, SaaS, and OEM licenses) — useful context if the technology being evaluated is code rather than a device or material, since software evaluation agreements often add delivery-specific terms (e.g., no right to copy or redistribute the installed evaluation build) that a hardware or biological-material evaluation agreement wouldn’t need.

What happens after the evaluation period ends

An evaluation agreement’s term expiring is not, by itself, a decision about licensing — it simply ends the evaluator’s authorized use. Three outcomes are common: the parties proceed to negotiate a full license agreement, informed by what the evaluation showed; the evaluator declines to license, and the agreement’s termination provisions (return or destruction of materials, continuing confidentiality obligations) take effect; or, less commonly, the parties extend or renew the evaluation period if more time is needed to reach a decision. Because the evaluation agreement itself creates no automatic path to a license, institutions that want to preserve negotiating momentum sometimes add a short right-of-first-negotiation clause — but this has to be drafted in, not assumed.

Frequently asked questions

Does an evaluation agreement need a separate NDA?

Often yes, though the two are sometimes combined into a single document. An NDA controls confidential information; an evaluation agreement grants a use right. Many TTOs execute an NDA first (to allow a substantive technical conversation) and then a separate evaluation agreement once a hands-on trial is agreed on, but institutions vary on whether they combine the two into one instrument.

Is an evaluation agreement legally binding even though there’s often no fee?

Yes. Consideration in a contract doesn’t have to be a cash payment — the institution’s grant of a limited right to test the technology, and the evaluator’s corresponding obligations (confidentiality, scope limits, return-or-destroy provisions), are themselves sufficient consideration to make the agreement enforceable.

Can an evaluator publish results from testing under an evaluation agreement?

Only if the agreement says so. Most evaluation agreements are silent on or expressly restrict publication, since the underlying technology may not yet be patent-protected and an evaluator’s public disclosure of test results could itself create prior-art or novelty problems for the institution. Any publication plan should be addressed explicitly in the agreement, not assumed to be permitted.

Does evaluating a technology obligate a company to eventually license it?

No, not unless the agreement specifically includes an option or right-of-first-negotiation clause. Absent that, either party can walk away at the end of the evaluation period with no further obligation beyond winding down use and honoring any surviving confidentiality terms.

Related CASRAI resources

License Agreement Structure — the full commercial license an evaluation agreement typically precedes
Confidentiality Agreement (NDA) — controls information disclosure, distinct from the use rights an evaluation agreement grants
Non-Disclosure Agreements in Research and Technology Transfer
Software License Agreement
Types of Software License Agreements — covers the evaluation/trial license as a software-specific deployment model
Due Diligence Questionnaire in Technology Licensing
Invention Disclosure
The Technology Transfer Process

Use in your systems

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