1. Creating Technology-Based Commercialization Alliances
Gene Slowinski

2. Hollywood Model of Innovation
Patent Prosecution
Implementing the “Want, Find, Get, Manage” Model®
High risk, high reward deal structure

3. The majority of food-related IP is external to Kraft*
97.8%
2.2%
* From Food Related means patents coded with International Patent Classification A21/A22/A23 or US Classification 426. US, Europe and PCT. Presentation by Dr. Steve Goers, CoDev 2008, Phoenix, AZ

4. Billions of IQ points
Linked to centuries of experience
Driven to creativity by passion
Yet isolated from my organization

5. The Customer Does Not Care About the Source of Innovation

6. Hollywood Model of Innovation
Patent Prosecution
Implementing the “Want, Find, Get, Manage” Model®
High risk, high reward deal structure

7. Understand the patent landscape in your area of business interest
Understand the patent landscape in your area of business interest. File patents to maximize your value in the landscape. File in all relevant geographies. In-license patents to create a “Bundle”.
Characteristics of the right Patent attorney
20+ years as a patent attorney
graduate degree in the technical area of interest
works as hard to understand the business as the technology
writes claims that are enforceable
Red team review

8. Hollywood Model of Innovation
Patent Prosecution
Implementing the “Want, Find, Get, Manage” Model®
High risk, high reward deal structure

9. Want Find Get Manage Transformational Growth: The “WFGM” Model
Industry is accessing the world for innovation
The “WFGM” Model
Manage
What tools, metrics and management techniques will we use to implement the relationship?
Want
What external resources do we need to succeed in our mission?
Find
What mechanisms will we use to find these resources?
Get
What processes will we use to plan, structure and negotiate an agreement to access the resources?

10. How Do You Get Found Patents Publications Conference presentations
Social Networking (LinkedIn)
Advisory board (retired execs from your industry)
Trade associations (network with long-time members)
Key to success: Network with networked people in your business area of interest.

11. First Contact 3 Pronged Approach
Business Unit Head
Chief Technology Officer
or BU R&D Head
Business Development
or Licensing
Critical First Sentence = “This document contains non-proprietary information
concerning Company X’s technology.

12. Alliance
Framework®

13. Want Find Get Manage Transformational Growth: The “WFGM” Model
Industry is accessing the world for innovation
The “WFGM” Model
Manage
What tools, metrics and management techniques will we use to implement the relationship?
Want
What external resources do we need to succeed in our mission?
Find
What mechanisms will we use to find these resources?
Get
What processes will we use to plan, structure and negotiate an agreement to access the resources?

14. The Alliance Framework®
A rigorous process and document for planning and negotiating an alliance.
Goal is to develop a high quality deal quickly or, to understand that a deal is not possible ... quickly.
Adaptable, not a cookie cutter
Can be used at any stage of alliance formation
Accelerates implementation because implementers are part of the Planning and Negotiating Team.
Works best when both firms use the process.
Requires internal commitment from all key internal stakeholders (anyone with a budgetable resource).

16. Alliance Framework Elements
Typical Elements:
Objectives (ours, theirs)
Roles (ours, theirs)
Overall resources
Boundaries
Market model
Strategic exclusivity
Intersections with the potential alliance
Business plan summary
Detailed objectives and detailed resources
Financial pie-split
Intellectual property
Working process and governance
Term and termination
Alliance structure

17. Innovation Portfolio – Tools for Risk Mitigation and Value Creation
Stan Lech
Vice President, Global Innovation R&D
GSK Consumer Healthcare
&
Gene Slowinski
Rutgers University

18. GSK Consumer Healthcare
Over $6 Billion of sales in 120 countries
R&D budget of $200 million+
Uniquely headquartered in both U.S. and U.K.
3rd largest OTC consumer healthcare company and 3rd largest oral care company
More than 30 leading brands, 5 with sales in excess of $300 million

19. GSK 2007 Collaborative Innovation Results
New Innovative Products, Market Models
~400 Finds against 45 clearly defined Wants
50 technologies still under review by category team’s
Closed 12 early stage technology agreements
6 additional agreements under negotiation

20. +13% +14% Jan 2007 Feb What Happened? £m 3100 3000 2900 2800 +9% +6%
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
+3%
+2%
+4%
+5%
+6%
2004
2005
2006
2800
2900
3000
3100 £m
+9%
Jan
2007
Feb

21. Hollywood Model of Innovation
Patent Prosecution
Implementing the “Want, Find, Get, Manage” Model®
High risk, high reward deal structure

22. Phase Model Specifically designed for early stage R&D relationships
Particularly when the potential value is high but uncertain

23. Definitions:
Market facing partner – firm that interacts with the ultimate customer (e.g., Lilly, P&G, Kraft)
Technology source – firm that has the primary role for developing (or leading the co-development) of the technology (that’s you)

24. Technical potential is high, but uncertain
Three Phase Structure
Phase 1 - Evaluation
Standstill agreement with payment (usually 6 months)
Phase 2 - Development
Milestone 1 Milestone Milestone N
Milestones often follow the firm’s stage gate process
Market facing partner earns exclusivity by making a development launch payment and subsequent milestone payments
Market facing partner can terminate at any milestone by not making the milestone payment
Technology source cannot terminate
Consequences of termination
Technology source receives exclusive rights to the foreground
Market facing partner grants background rights needed to practice the foreground ?
Technology source is free to work with the market facing partner’s competitors
Technology source may earn a termination fee to compensate for the opportunity cost
of working with the market facing partner
Phase 3 – Commercial launch
Launch payment
Royalties and other payments designed to meet the agreed upon NPV split

25. Questions?