Managing the Technology Transfer and Commercialization Process Best thing since sliced bread

Which Patent is Illustrated Here?

Otto Frederick Rohwedder Bread Slicer

Agenda 1.University Decision Process 2.Licensing Best Practices 3.Best Practice National Policies 4.Startup Best Practices 5.Discussion

The disruptive nature of the technology Funding needs of the technology The commercial value of the technology Market potential and size Number of potential licenses University Decision Process

Competition Stage of development, ease of implementation and timing Prior art and patentability (Intellectual Property Strength) Potential for additional IP to strengthen Intellectual Property to strengthen the value proposition University Decision Process

University/Industry Licensing Best Practices Universities should reserve the right to practice licensed inventions and allow other non-profit and government organizations to do so as well Exclusive licenses should be structured to encourage tech development Strive to minimize licensing of future improvements

Universities should anticipate and help to manage technology transfer related conflicts of interest Ensure broad access to research tools Enforcement action should be carefully considered University/Industry Licensing Best Practices

Be mindful of export regulations Be cautious when working with patent aggregators Consider including provisions that address unmet needs University/Industry Licensing Best Practices

Strong and focused university research feeds the pipeline for commercialization Federal Research and Development funding provides a critical base for success Early stage capital is critical in launching University Start-ups University/Industry Licensing Best Practices

Entrepreneurial culture is key! Strong networks build the entrepreneurial culture inside and outside the University Entrepreneurship programs add value University/Industry Licensing Best Practices

Incubators and Research Parks provide a visible tech based entrepreneurial presence Champions catalyze successful technology based economic development University/Industry Licensing Best Practices

Private Corporations and Foundations play major role Champions catalyze successful technology based economic development Incubators and Research Parks provide a visible tech based entrepreneurial presence University/Industry Licensing Best Practices

1.Support proof-of-concept funding National Science Foundation Budget FY Connect federal researchers with private companies Extend NASA Ambassadors Program government- wide Steps for Creating Jobs, Improving Technology Commercialization and Building Communities of Innovation

3.Create more private sector involvement near federal lab and regional research clusters Expand Enhanced Use Leasing (EUL) government-wide 4.Expand the corporate R&D tax credit U.S. tax policy lags other leading countries 5.Encourage entrepreneurship as a national goal, and include entrepreneurship in STEM initiatives From STEM to ESTEEM Steps for Creating Jobs, Improving Technology Commercialization and Building Communities of Innovation

Create more private sector involvement near federal lab and regional research clusters Expand Enhanced Use Leasing (EUL) government- wide Expand the corporate R&D tax credit U.S. tax policy lags other leading countries Encourage entrepreneurship as a national goal, and include entrepreneurship in STEM initiatives From STEM to ESTEEM 10 Steps for Creating Jobs, Improving Technology Commercialization and Building Communities of Innovation

Friction between private industry and University over intellectual property Conflict between the mission of research/teaching and commercialization of inventions Issues Related to University Commercialization Best Practices

Favoring Intellectual Property licensing over Spin-out creation Unproven capital platforms inside the University Issues Related to University Commercialization Best Practices

COMPANY FORMATION MILESTONES

Phase One Companies License executed with University Corporate documents filed and entity established Executive summary or commercialization plan created Necessary trademarks filed Brand and logo developments and creation of necessary marketing material Web development and hosting

Phase Two Companies Business Plan Developed Target Market Defined Financial Models and Pro-Formas Capital Structure Defined Business Model Defined

Phase Two Companies (cont.) Product Development Proof of Concept Prototypes and /or Alpha and Beta products developed External Validation CEO formally engaged External grant money secured

Phase Three Companies Independent Board of Directors Investors identified and engaged Critical management in place (CFO, CSO, COO, etc.) Institutional finding secured Market ready product First customers

Phase Four Companies Long term growth strategy Sales and marketing teams in place Strategic partners engaged Potential exits identified Net sales according to definition outlined in license agreement Additional products and IP being created

Phase Five Companies Exit Long term growth

Licensing PreferencesStart-up Preferences Technology  Technology represents an incremental improvement to existing technology used by existing and already established companies  Technology is market ready  Technology is usually disruptive  Platform technology is far from market ready  No appropriate licensee  Broad range of potential applications for technology Intellectual Property  Crowded field, potential infringement risk  Potential to mitigate risk (exit strategy) Market  There is an existing market, customer loyalties exist towards particular companies  Well established distribution channels have already been created by existing companies  New market with potentially high market demand  Clearly defined and addressed need  Reasonable chance for overcoming barriers for entry  Short time to market  Large market with significant growth potential  Significant profit margins Availability of Investment/Funding and Management  Nature of technology makes raising capital difficult in comparison with others  No management team available  Investors and funding can easily be identified  Inventors are willing to dedicate time and resources and have the desire to be involved Regulatory Considerations  In house resources available at existing companies  Quality assurance system in place  No funds available to acquire  No expertise in securing regulatory approvals

Licensing PreferencesStart-up Preferences Technology  Technology represents an incremental improvement to existing technology used by existing and already established companies  Technology is market ready  Technology is usually disruptive  Platform technology is far from market ready  No appropriate licensee  Broad range of potential applications for technology Intellectual Property  Crowded field, potential infringement risk  Potential to mitigate risk (exit strategy) Market  There is an existing market, customer loyalties exist towards particular companies  Well established distribution channels have already been created by existing companies  New market with potentially high market demand  Clearly defined and addressed need  Reasonable chance for overcoming barriers for entry  Short time to market  Large market with significant growth potential  Significant profit margins Availability of Investment/Funding and Management  Nature of technology makes raising capital difficult in comparison with others  No management team available  Investors and funding can easily be identified  Inventors are willing to dedicate time and resources and have the desire to be involved Regulatory Considerations  In house resources available at existing companies  Quality assurance system in place  No funds available to acquire  No expertise in securing regulatory approvals

Licensing PreferencesStart-up Preferences Technology  Technology represents an incremental improvement to existing technology used by existing and already established companies  Technology is market ready  Technology is usually disruptive  Platform technology is far from market ready  No appropriate licensee  Broad range of potential applications for technology Intellectual Property  Crowded field, potential infringement risk  Potential to mitigate risk (exit strategy) Market  There is an existing market, customer loyalties exist towards particular companies  Well established distribution channels have already been created by existing companies  New market with potentially high market demand  Clearly defined and addressed need  Reasonable chance for overcoming barriers for entry  Short time to market  Large market with significant growth potential  Significant profit margins Availability of Investment/Funding and Management  Nature of technology makes raising capital difficult in comparison with others  No management team available  Investors and funding can easily be identified  Inventors are willing to dedicate time and resources and have the desire to be involved Regulatory Considerations  In house resources available at existing companies  Quality assurance system in place  No funds available to acquire  No expertise in securing regulatory approvals

Licensing PreferencesStart-up Preferences Technology  Technology represents an incremental improvement to existing technology used by existing and already established companies  Technology is market ready  Technology is usually disruptive  Platform technology is far from market ready  No appropriate licensee  Broad range of potential applications for technology Intellectual Property  Crowded field, potential infringement risk  Potential to mitigate risk (exit strategy) Market  There is an existing market, customer loyalties exist towards particular companies  Well established distribution channels have already been created by existing companies  New market with potentially high market demand  Clearly defined and addressed need  Reasonable chance for overcoming barriers for entry  Short time to market  Large market with significant growth potential  Significant profit margins Availability of Investment/Funding and Management  Nature of technology makes raising capital difficult in comparison with others  No management team available  Investors and funding can easily be identified  Inventors are willing to dedicate time and resources and have the desire to be involved Regulatory Considerations  In house resources available at existing companies  Quality assurance system in place  No funds available to acquire  No expertise in securing regulatory approvals

Licensing PreferencesStart-up Preferences Technology  Technology represents an incremental improvement to existing technology used by existing and already established companies  Technology is market ready  Technology is usually disruptive  Platform technology is far from market ready  No appropriate licensee  Broad range of potential applications for technology Intellectual Property  Crowded field, potential infringement risk  Potential to mitigate risk (exit strategy) Market  There is an existing market, customer loyalties exist towards particular companies  Well established distribution channels have already been created by existing companies  New market with potentially high market demand  Clearly defined and addressed need  Reasonable chance for overcoming barriers for entry  Short time to market  Large market with significant growth potential  Significant profit margins Availability of Investment/Funding and Management  Nature of technology makes raising capital difficult in comparison with others  No management team available  Investors and funding can easily be identified  Inventors are willing to dedicate time and resources and have the desire to be involved Regulatory Considerations  In house resources available at existing companies  Quality assurance system in place  No funds available to acquire  No expertise in securing regulatory approvals

Licensing PreferencesStart-up Preferences Technology  Technology represents an incremental improvement to existing technology used by existing and already established companies  Technology is market ready  Technology is usually disruptive  Platform technology is far from market ready  No appropriate licensee  Broad range of potential applications for technology Intellectual Property  Crowded field, potential infringement risk  Potential to mitigate risk (exit strategy) Market  There is an existing market, customer loyalties exist towards particular companies  Well established distribution channels have already been created by existing companies  New market with potentially high market demand  Clearly defined and addressed need  Reasonable chance for overcoming barriers for entry  Short time to market  Large market with significant growth potential  Significant profit margins Availability of Investment/Funding and Management  Nature of technology makes raising capital difficult in comparison with others  No management team available  Investors and funding can easily be identified  Inventors are willing to dedicate time and resources and have the desire to be involved Regulatory Considerations  In house resources available at existing companies  Quality assurance system in place  No funds available to acquire  No expertise in securing regulatory approvals

Licensing PreferencesStart-up Preferences Technology  Technology represents an incremental improvement to existing technology used by existing and already established companies  Technology is market ready  Technology is usually disruptive  Platform technology is far from market ready  No appropriate licensee  Broad range of potential applications for technology Intellectual Property  Crowded field, potential infringement risk  Potential to mitigate risk (exit strategy) Market  There is an existing market, customer loyalties exist towards particular companies  Well established distribution channels have already been created by existing companies  New market with potentially high market demand  Clearly defined and addressed need  Reasonable chance for overcoming barriers for entry  Short time to market  Large market with significant growth potential  Significant profit margins Availability of Investment/Funding and Management  Nature of technology makes raising capital difficult in comparison with others  No management team available  Investors and funding can easily be identified  Inventors are willing to dedicate time and resources and have the desire to be involved Regulatory Considerations  In house resources available at existing companies  Quality assurance system in place  No funds available to acquire  No expertise in securing regulatory approvals