Joy Goswami, MS, MBA, RTTP Office of Economic Innovation & Partnerships University of Delaware 2012

 TTOs facing all round budget cuts  Being confronted with issues such as down-sizing their patent portfolios to prioritize focus on the more ‘licensable’ patents  Number of new invention disclosures being received is on the rise but proportionally, the number of license deals are NOT  Requirements to develop a more structured screening process to reduce accrual of ‘non-licensable’ patents  Demands to increase efficiency of already under-staffed and over- worked offices!

1. What is triage? 2. Major elements of triage 3. Properties of a triage tool 4. Interpretation of ‘licensable’ technology 5. In the shoes of potential licensee 6. Objectives defined 7. Decision matrix 8. Interpretation of the Decision Matrix 9. Proposed Model for adoption (9-month rule) 10. Conclusion ‘licensable’ technologies

Triage is: Preliminary screening assessment undertaken in an effort to …. Identify high potential projects that may be worthy of significant effort and investment in commercialization. AUTM- 09 US Licensing Activity Survey reported  20,309 disclosures  4,374 licenses executed  18,214 total U.S. patent applications filed

 Legality  Safety  Environmental impact  Societal impact  Potential market  Product life cycle  Usage learning  Product visibility  Service  Durability  New competition  Functional feasibility  Production feasibility  Stability of demand  Consumer/user compatibility  Marketing research  Distribution  Perceived function  Existing competition  Potential sales  Development status  Investment costs  Trend of demand  Product sales  Development status  Investment costs  Trend of demand  Product line potential  Need  Promotion  Appearance  Price  Protection  Payback period  Profitability  Product interdependence  R&D University of Oregon’s Innovation Center (1970s) developed a list of 33 areas and factors that should be determined for commercial potential of invention.

Desired: 1. Objective analysis 2. Not ranking based 3. Simple to use and apply 4. Easy and reliable interpretation of results Commonly known tools:  TechAccess ™ (Texas A&M)  TechAdvance™ point system, based on 43 researched and validated criteria, provides an easy-to-use system for ranking your technologies  Innovation Assessment Program at Washington State University  Others: mostly from commercial organizations

Triage is the preliminary screening assessment undertaken by us in an effort to identify high potential projects (‘licensable technologies’ ) that may be worthy of significant effort and investment in commercialization. “We do not want to leave any scope of MAYBE in our assessment here”

 An invention that is legally protectable.  Is relevant to a market need (has commercial value)  Can be envisioned as a material product (mature)  Is supported by inventors showing willingness to facilitate ‘technology transfer’

What Licensees really want from the technology: ‘Good’ Competitive Technology Threats to Substitute Barriers to Entry Freedom to operate Minimize Risk Value Extraction Consideration

What Licensees really want from the technology: Strong Buy technology Develop technological capability Concentrate on opportunity (in-license) Average Keep outLook for opportunities Strengthen marketing function Weak Keep outFind nicheLook for partners WeakAverageStrong Market Strength Technological capability

1. Licensing Revenue 2. Sponsored Research 3. University – Industry Partnership development 4. Start-ups (Spin-outs and Spin-ins) 5. Economic Development

 Patents are the media and NOT the end point for success  Even best patents might not be licensable  Patents can be obtained for almost everything if aimed low at claims  Defining a ‘good’ versus ‘bad’ patent is subjective but important  ‘Good’ Patent = Licensable ; ‘Bad’ Patent = Non-licensable  All disclosures mandates close scrutiny and good screening to get ‘good’ patents

THE DECITION MATRIX

1. Very clear idea of the invention (technology for protection) 2. Precise idea of what the end (commercial) product will look like 3. Value Proposition: Faster/ Better/Cheaper (1992 NASA initiative) 4. Inventor(s) background

Receive well documented invention disclosures that:  Describes invention clearly and concisely. Highlight why it is unique, non-obvious and useful  Attach all prior patent art, literature, citations  Mention Funding Source and Agencies  State the invention’s commercial value (with justifications)  Attach all commercial contacts (names/addresses) that may be interested in the invention  List Inventors (each inventor having at least one contribution to the patent claims)

Step 1 Preliminary Screening Step 2 Implement Decision Matrix

Step 1 Preliminary Screening

Look for non-favorable ‘licensing characteristics’ (commonality in disclosures that have been not been successfully licensed in the past). One size does not fit all…

Screen-out disclosures that have such non-favorable ‘licensing characteristics’. Some of these characteristics include: ▪ Simple artifacts, involve rudimentary use of scientific principles ▪ Disclosures involving know-how or process only (and not part of a portfolio) ▪ Comprise non-cooperative inventors ▪ Have specific and narrow application base ▪ Is not amongst the list of emerging technologies*

 Advanced Materials  Superconductors  Advanced semiconductor devices  Digital Imaging Technology  High Density Data Storage  High-performance computing  Optoelectronics  Artificial Intelligence  Flexible computer-integrated manufacturing  Sensor technology  Chemical Engineering  Agriculture and Plant Science  Medicine  Biotechnology  Medical devices and diagnostics (Source: Technology Administration Division, US Department of Commerce)

Step 2 Implement Decision Matrix

1. Patentability 2. Commercial Viability 3. Stage of Technology Maturity Protectable Invention (IP) Commercial Value Maturity Good (Licensable) Patent Decision Matrix

CategoryPatentabilityMarketabilityMaturity StageGo/No-GoActivity INarrowLowEarly or LateNo-Go Abandon or Assign rights back to inventors 2 BroadLowEarly or LateNo-Go Abandon or Assign rights back to inventors 3NarrowHighEarly Further diligence required Seek collaborators for sponsored research 4NarrowHighLateGo Seek Licensee with non- exclusivity terms 5BroadHighEarlyGo Actively seek licensee with option terms 6BroadHighLateGo Actively seek licensee for exclusivity

1. To what extent has the invention already been disclosed to the public? (i.e. is it novel) 2. Obviousness - TSM test, an invention is obvious (and therefore un- patentable) only if there is a teaching, suggestion or motivation to combine prior art references. 3. Anticipated scope of claims? Rate: Broad or Narrow Protectable Invention (IP) Commercial Value Maturity Good (Licensable) Patent

1. Nature of the technology in the market: breakthrough or incremental improvement? 2. Competitive products: currently available in the market? 3. Market Assessment: size, fields of use, company players? 4. Value Proposition: Does the added value exceed the cost of development? Rate: High or Low Protectable Invention (IP) Commercial Value Maturity Good (Licensable) Patent

1. Anticipated time to license? Rate: Early or Late Protectable Invention (IP) Commercial Value Maturity Good (Licensable) Patent

CategoryPatentabilityMarketabilityMaturity StageGo/No-GoActivity INarrowLowEarly or LateNo-Go Abandon or Assign rights back to inventors

CategoryPatentabilityMarketabilityMaturity StageGo/No-GoActivity 2 BroadLowEarly or LateNo-Go Abandon or Assign rights back to inventors

CategoryPatentabilityMarketabilityMaturity StageGo/No-GoActivity 3NarrowHighEarly Further diligence required Seek collaborators for sponsored research

CategoryPatentabilityMarketabilityMaturity StageGo/No-GoActivity 4NarrowHighLateGo Seek Licensee with non- exclusivity terms

CategoryPatentabilityMarketabilityMaturity StageGo/No-GoActivity 5BroadHighEarlyGo Actively seek licensee with option terms

CategoryPatentabilityMarketabilityMaturity StageGo/No-GoActivity 6BroadHighLateGo Actively seek licensee for exclusivity

CategoryPatentabilityMarketabilityMaturity StageGo/No-GoActivity INarrowLowEarly or LateNo-Go Abandon or Assign rights back to inventors 2 BroadLowEarly or LateNo-Go Abandon or Assign rights back to inventors 3NarrowHighEarly Further diligence required Seek collaborators for sponsored research 4NarrowHighLateGo Seek Licensee with non- exclusivity terms 5BroadHighEarlyGo Actively seek licensee with option terms 6BroadHighLateGo Actively seek licensee for exclusivity

CategoryPatentabilityMarketabilityMaturity StageGo/No-GoActivity INarrowLowEarly or LateNo-Go Abandon or Assign rights back to inventors 2 BroadLowEarly or LateNo-Go Abandon or Assign rights back to inventors 3NarrowHighEarly Further diligence required Seek collaborators for sponsored research 4NarrowHighLateGo Seek Licensee with non- exclusivity terms 5BroadHighEarlyGo Actively seek licensee with option terms 6BroadHighLateGo Actively seek licensee for exclusivity

Getting market ‘cues’ is most critical for fruitful decision making

1. Enforcement Licensing 2. Opportunity Licensing 3. Opportunistic Licensing 4. Divestiture licensing 5. Partnering Licensing 6. Startup Licensing

 Identify sensitivity of the technology to various risks:  Technology itself  The market  IP issues  Government and society  Consider economics  Identify application fit to an unmet need  Review production capacity  Study scale-up or mass production feasibility

Invention disclosure submitted to TTO Provisional Filed: 0 months “Marketing Active” Decision to convert or abandon: 9 months Review disclosure using DECISION MATRIX Patent Prosecution: 12 months Prepare technical flyer, Assess target market and contact companies (20 +), review start-up interest assess technology and gather data “9 months rule” – No conversion unless favorable marketability response Within the 9 month period of provisional filing: 1. Perform ‘push’ marketing to pertinent target market 2. Collect data (positive, negative and no responses) 3. Analyze data in light of the decision matrix to determine conversion decision

TTO Current Licensees Alumni (Expert Network) University ‘Excels’ Inventors Companies (Potential Licensees) VCs and Entrepreneurs

USE INTERNET AS THE PRIMARY TOOL Contact Potential Licensees  first  If a known contact, either or call, but respect their time. Follow up  Ensure receipt by phone or Respond to requests for more info in a timely manner  Have a draft CDA ready to send out within a day of the request  Call faculty to get answers to speed up response to the company  Keep complete records of your marketing activities (data collection)

 Lots of good ideas are patentable but may not be licensable  Take a comprehensive approach to your screening process  Identify ‘good’ (licensable) technologies using a well designed triage tool  Define your objectives (… merely getting patents is NOT an objective)  Get all critical pieces of the invention

 Adopt a simple two-step triage process comprising of preliminary screening, and decision matrix  Decision matrix comprising of a minimum of the three criteria: patentability, marketability and stage of maturity  Analyze – go or no-go (no intermediates)  Capitalize on the provisional period to gather data (market cues) Step 1 Preliminary Screening Step 2 Implement Decision Matrix

 Lowe Paul. The Management of Technology – Perception and Opportunities: 1st edition. Chapman & Hall, 1995  Kotler, Philip and Kevin Lane Keller. Marketing Management, 12th edition. Upper Saddle River, NJ: Prentice Hall, 2006  Razgaitis, Richard. Valuation and Pricing of Technology – Based Intellectual Property, 2nd edition. Hoboken, NJ: John Wiley and Sons, Inc.,  Christopher M. Arena and Eduardo M. Carreras. The Business of intellectual Property. 1 st edition. Oxford University Press,  Stim Richard. License your invention – sell your idea and protect your rights with a solid contact. 3 rd edition. Nolo, 2002

THANK YOU It is better to debate a question without settling than to settle a question without debating it. - Jeseph Joubert Joy Goswami (MS, MBA, RTTP) Licensing Associate Registered Technology Transfer Practitioner University of Delaware Office of Economic Innovation & Partnerships 1, Innovation Way, Suite 500 Delaware Technology Park Newark, DE Phone: (Cell) Fax: Web: Joy Goswami (MS, MBA, RTTP) Licensing Associate Registered Technology Transfer Practitioner University of Delaware Office of Economic Innovation & Partnerships 1, Innovation Way, Suite 500 Delaware Technology Park Newark, DE Phone: (Cell) Fax: Web: