1.8.1 Refining Relation of Inventiveness and Market Relevance
By developing a firm understanding of inventiveness and market relevance of the invention (see Topic 6: The Ten-point Tech Scoring Template), the TTP is poised to bring the business development approach to the commercialization planning and action. By diving deeper into the invention’s inventiveness and its link to market relevance, the TTP is building the foundation for a creative and proactive IP/technology commercialization campaign.
Here are more details of a deeper dive into links of inventiveness and market relevance, with examples.
1.8.2 Envisioning Potential Product/Service and Value
In Topic 5: Basic Tech Triage: Assessing and Selecting Disclosures, Section 1.5.2, we discussed imagining an initial hypothetical product or service enabled by the invention. This process serves as a first means of assessing the commercialization potential. Here, we envision potential a product/service based on a more thorough understanding of the invention’s inventiveness and its relevance in particular markets. Most importantly, in this part of the envisioning product process, the TTP talks to industry to better assess the potential commercial value of enabled products/services. In this work the TTP learns marketplace realities of potential applications of the invention. Initial assumptions about market relevance will be validated or invalidated. The TTP’s perspective will be refined and grounded in reality – the reality of actual company, product and service information that will ultimately guide the products/services enabled by the IP/invention. In the short term, this deeper dive into potential products/services will lead to enhanced licensing opportunities and an optimal negotiating position for the TTO/TTP.
Here are more details on deeper dives into product/service envisioning.
1.8.3 Considering/Imagining Potential Licensees
Normally there is only one path to commercialization for a TTO/TTP to consider: licensing to a private sector partner (i.e., a for-profit company). Thus, finding a suitable Licensee(s) is a key priority for the TTP when initially managing an invention. The immediate challenge is to identify and contact a number of potentially interested commercial parties who have the technical, business and financial capacity to effectively develop and commercialize the technology. Of course, commercial partners should also be considered based on the potential for a positive working relationship with the inventor and the TTO/TTP.
Finding a company that is seriously interested in the TTP’s technology is a matter of probability. Only a small percentage of companies contacted will be interested. So, the larger the pool, the greater the chances of finding a partner ready to engage in serious discussions. How does the TTP find these potential partners? Often, the inventor will be a good source of such partners. However, when the TTP must identify partners, they must be creative and thoughtful. The process begins with understanding the technology’s market relevance (see Topic 4: Managing the Invention Disclosure and Topic 5: Basic Tech Triage: Assessing and Selecting Disclosures). From this exercise, the TTP can identify companies in those markets. The TTP should research into these companies and imagine how the company might profitably use the invention/IP. Since it is practically impossible for the TTP to really know whether a company will be interested, they should develop a pool of companies that differ in size, business model, product line, etc. The TTP should look for clues that a company is or is not innovative.
Here are more details on how a TTP imagines how any company in the identified pool could profit from the IP/invention.
1.8.4 Commercialization/Licensing Strategy
The TTP must develop a commercialization/licensing strategy for each IP/invention case they manage. This strategy is designed entirely on a case-by-case basis and is based on the TTP’s analysis of inventiveness and IP quality, market relevance and value proposition. The TTP will determine if the technology will support a non-exclusive license approach or if an exclusive license is the best way to successful commercialization. Variations on the exclusive vs. nonexclusive are also to be considered. The experienced TTP will also think of different types of exclusive licensing including Field of Use and consortium. Of course, the TTP will also consider the geographical scope of value of the IP/invention.
Here are more details on the process of developing a commercialization/licensing strategy.
1.8.5 The Technology as Client
In the Tech Transfer process, the TTP and TTO are at the center of a number of activities and actors: inventors, senior institution leaders and department managers, potential and current Licensees, local governments and economic development officials, and the public. These different actors often have competing goals. The TTP must understand who their client is – while their institution and the technology’s inventor are key stakeholders, ultimately the technology should be considered the TTP’s ultimate client. Over many years of trial and error, mistakes and successes, it is clear that all parties will be satisfied if the technology itself is successful.
More details about this subtopic can be found in this presentation.
1.8.6 Start-ups: Why are They Important?
Start-ups play an important role in Tech Transfer. They are frequently the preferred first commercialization vehicle for new technologies, particularly revolutionary technologies which may appear too unproven and risky to attract established companies. Start-ups will carry out the earliest, highest risk phases of developing the technology, and when risk has been reduced, then partner with a large company to fund large-scale trials, manufacturing and global distribution.
Academic technologies are always early stage and totally untested, and it’s critical that the university has policies to allow inventors to actively work with their spin-out companies in the early-stage development of the technology. In the United States and Europe, universities generally allow their inventors to consult one day per week with industry, and they can use this time to work with their start-ups. Government labs rarely have such policies and are much more challenged in creating viable start-ups.
Start-ups are particularly important in economies without a well-developed industrial sector. They can become the seeds of flourishing industrial economies.
Click here for a few slides on the Triple Helix model of economic development, in which start-ups play a critical role.
Start-ups introduce a lot of complexity into Tech Transfer, including stock options – who should get it and how much? How does the stock become worth something? It also raises many questions of conflict-of-interest, and it’s important to have robust conflict-of-interest and conflict-of-commitment policies in place before you start going down this path.
Start-ups are such an important topic that we will come back to look at them in depth in Track III (Advanced-level TTP), Topic 1: Start-ups.