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Republika Srbija                    MINISTARSTVO EKONOMIJE                    I REGIONALNOG RAZVOJATechnology Transfer, Te...
Republika Srbija                    MINISTARSTVO EKONOMIJE                    I REGIONALNOG RAZVOJAIntroducing Workshop 2 ...
Session 1   Technology Transfer from   public research organisations:   developing 3rd stream activityLisa CoweyKey Expert...
Outline of talk• Economic, Political and Legislative Drivers  of Innovation from PROs.• Direct and indirect benefits of 3r...
Innovation from Public Research Organisations (PROs)PRO Mission:• Teaching• Research• Innovation (3rd Stream)• Why are Uni...
Economic And Political Drivers of Innovation University-Industry technology transfer plays    an acknowledged role in econ...
University spinout activity USA•   ~12% of USA university inventions are    realised though the medium of technology    tr...
UK University Activity (2001-2002)•   turnover of spin-off companies increased from    £212m to £289m•   number of people ...
Economic And Political Drivers of Innovation• University innovation as  commercialisation of an invention, is  thus consid...
Why 3rd Stream activities?It’s the economy stupid!                              James Carville         (1992 Clinton Presi...
Direct vs. In-direct benefitsTechnology transfer is not a large revenue generator for  the universityUK Lambert Review of ...
In-direct BenefitsStanford•   remains a leader in technology transfer•   has generated more start ups than any other    US...
Indirect benefits to the UniversitiesIncreased potential for :• participating in interesting and well resourced   collabor...
Perceived Government Benefits• National industry as a whole• Related employment prospects• Induced investment into the Nat...
Legislative Drivers of InnovationLegislation: considered to be one of the driving forces of university    technology trans...
Commercialisation of inventionsLegislation allows Universities/ Faculties/ PROs tohold the rights to IPR (“ownership”).Onc...
Technology Transfer•   Definition•   Technology Transfer - “the process whereby    inventions or intellectual property fro...
Realising Value: Practical routes for IP TransferTechnology can be transferred and knowledge can  be exchange through one ...
Main stages of Technology Transfer•   Identification•   Capture•   Evaluation•   Market              Finansira Evropska un...
Technology Transfer Models• All generic models of Technology Transfer  or Innovation include:  – General Processes  – Deci...
General processes  •   Disclosure  •   Technology Evaluation  •   Market Evaluation  •   Legal (IPR protection)  •   Route...
Models of Technology TransferDeal Based Model (Just in Time)• rate of production of IP = expected rate of transfer/  licen...
Deal based vs. Inventory?•   The processes, controls and human resources    required for efficient implementation of    te...
Commercial Exploitation of R&D    Finansira Evropska unija
Commercial Exploitation of R&DFinansira Evropska unija
Appendix A: Technology Transfer Process                                                       Disclosure                  ...
DocumentationThe following documents are normally required to supportthe Innovation process.• Disclosure• Assignment of Ri...
Stage I Invention Assessmentto assess optimum management strategy for  commercialisation  •   Claims to Ownership (due dil...
Disclosure•first signal that an invention has been made•a method of formalising the confidentialdescription of an inventio...
Appendix A: Technology Transfer Process                                                       Disclosure                  ...
DisclosureThe key information required on the disclosureform should include:•Title of the invention•Name(s) of the invento...
ExamplesExamples of disclosure formsUniversity of Stanford:http://otl.stanford.edu/inventors/resources/disclosure.pdfMIT:h...
Premature DisclosureWhat qualifies as: “PrematureDisclosure”?                     Discussion     Finansira Evropska unija
Premature DisclosureThe public release of information relating to aninvention before a patent has been filed.•abstracts•po...
Non-Disclosure Agreements• Examples of CDAs• Stanford University see:• http://otl.stanford.edu/pdf/cda.pdf• MIT see:• web....
Assignment of Rights• Inventor Assignment of Invention Form    •transfers ownership of the invention to the University of ...
Stage II Assessment of the Technology              Opportunity•Investigation of Patentability andmarketability.•During the...
Appendix A: Technology Transfer Process                                                       Disclosure                  ...
Application for IP Protection  •Provisional Patent Application  •Copyright Application  •Trademark Application  •Design ri...
Appendix A: Technology Transfer Process                                                       Disclosure                  ...
Market Assessment•   Market for invention•   Number of potential market sectors•   Total Market size•   Market Profile•   ...
LicenseLicense Agreement:•20 + page document•dense legal prose•first draft created by the Licensor•Allows all IP Policy to...
Outcomes of the Technology Transfer Process     •Invention Protection     •Commercialization     •Successful Innovation   ...
Pitanja i komentari• schafernaker@secep.rs• lisa.cowey@icip-serbia.org• www.secep.rs• www.icip-serbia.org           Finans...
Technology Transfer, Technology Brokerage             Beograd June 2011. godine             Intellectual Property Office  ...
Session 2 I   Universities, Public Research   Institutions and Intellectual Property   Rights.   Lisa Cowey   Key Expert (...
Outline of talk•   What is a PRO IP Policy?•   Why are they important?•   Situational examples.•   What should an IP Polic...
What is “IP Policy”?• Legal Ownership of “IP” (Rights Holder)• Coverage of the IPRs• Commercialization rights and  respons...
Legal Ownership/ Rights Holding•   Who can:•   Sell it?•   Rent it?•   Develop it?                                        ...
“Why do we need IP Policy anyway?”• Gatorad!• Invented in 1965 by researchers at  the University of Florida and named  in ...
“Me too” claim to ownership of good IPNumber of people who claim “it was my idea too!”                        Money (or ku...
Disputed ownership: Outcome?   Money made by the legal profession in resolving disputesMoney made by the inventors        ...
“Nothing to do with me” claim to           ownership of bad IPNumber of people who claim “it was my idea too!”            ...
Who is responsible when Bad IP is sold?The Oxford Sugar Beat and Crop Dryers Ltd• Established:1926• Patents: Yes• Ownershi...
What does the Patent Promise?• GB344080 - 3rd May 1931• Inventor: BRYNAR JAMES  OWEN (M.A., iD.Sc., M.Eng.,  Director of t...
Who is responsible when Bad IP is sold?• Outcome: Litigation• University was sued in 1931 for £750,000• This was greater t...
“Clean” IP•   Ownership is clear•   Undisputed•   Smoothes the path of technology transfer•   Keeps Universities out of th...
Issues to be addressed by an IP Policy1. coverage of intellectual property policy;2. ownership of intellectual property;3....
Do all IP Policies look the same?• No!  – Effective IP Policy reflects local conditions –    they may not transfer success...
Oxford University• The University takes ownership and  responsibility for commercialisation of IP through  the TTO “Isis I...
Cambridge University• For many years the University had a policy of  giving legal ownership of IP to the inventors.• The U...
Oxford vs. Imperial• Oxford IP policy includes undergraduate  students• Imperial College London IP Policy  excludes underg...
Oxford University vs. Oxford Brookes University • Oxford University commercialises though   a wholly owned legal company “...
Revenue Sharing Model: Cornell Research Foundation               of Cornell University                                    ...
Revenue Sharing Model: University of OxfordTangible Financial Benefits to Scientists, Departments and UniversityLicensing ...
Differences in Processes: University of Virginia               Patent Foundation            Finansira Evropska unija
University of Reading UK                             Appendix A: Technology Transfer Process                              ...
Why do these differences occur?        Ownership/ Right Holders• Reasons are often highly practical• Who has the resources...
TTO a department or a separate Unit?• Internal department – an extension of the  University -more acceptable to researcher...
Regional Examples (Croatia)• University Zagreb (Rectorate Unit)• (Medical School Faculty TTO)• Rudjer Boskovic Institute• ...
Undergraduates included or excluded• Is the value of undergraduate IP worth the  effort to commercialise?  – Leave then ou...
Process Difference• USA vs. European  – First to Patent (Europe)  – First to Publish (USA)• Internal vs. External IP Evalu...
Deal with the Issues YOUR way• To summarise• All IP Policies deal with the same set of  issues• HOW they deal with them re...
Issues to be addressed by an IP Policy1. coverage of intellectual property policy;2. ownership of intellectual property (r...
IP Policy: ObjectivesAn Intellectual Property Policy should help to achieve the    following objectives:1. Public Benefit2...
Abdicating Control vs. Taking Control• Fear and uncertainty                                          • IP Policy• Disincli...
Useful Resource• World Intellectual Property Organisation  (WIPO): Guidelines on Developing IP  Policy for Universities an...
Pitanja i komentari• schafernaker@secep.rs• lisa.cowey@icip-serbia.org• www.secep.rs• www.icip-serbia.org           Finans...
Session 2 II   Understanding Intellectual Property   Rights.  Mr Nataša Milojević,  Savetnik  Zavod za intelektualnu svoji...
Technology Transfer, Technology Brokerage             Beograd June 2011. godine             Intellectual Property Office  ...
Session 3Technology and Market Evaluation.  Lisa Cowey  Key Expert (Competitiveness and  Innovation) ICIP          Finansi...
Overview• Evaluation as part of the TT processes• Decision making aids (established  methods, processes and procedures)• U...
Appendix A: Technology Transfer Process                                                       Disclosure                  ...
Technology transfer models• Inventory based   – Patent those discoveries that look promising, market and license     later...
Evaluation Continuum                                              Market Assessment                                       ...
Tech- Assessment• to assess optimum management  strategy for commercialisation• Traffic Light system    Go    Proceed with...
Technology/ Invention Assessment6 Pillars approach1. Ownership2. Feasibility and Scope of Protection (IPR)3. Strength of T...
Legal Ownership    (Who owns this piece of land?)•   Who can:•   Sell it?•   Rent it?•   Develop it?             Finansira...
1. Ownership• Assignment   – Have rights to this technology been pre-assigned to a third     party?• Joint Inventorship   ...
2: Feasibility and Scope of Protection• Timing   – Publications exist or are planned• Strength   – Ability to work around ...
Patenting: we can- but should we?• Use patent decision trees• See Handout           Finansira Evropska unija
Patenting Decision Guide  Finansira Evropska unija
Patenting Decision Guide SR    Finansira Evropska unija
Factors effecting the Protection Decision• For patenting decisions – look  at the patterning decision guideHowever… also t...
3. Strength of Technology•   Uniqueness of the invention•   Emerging alternatives•   Novelty of the invention•   Breadth/ ...
4. Commercial Potential and Value•   Ability to identify market need•   Potential market size•   Availability of market co...
5. Stage of Development• Understanding    – Ability to understand the IP• Reduction    – Simulation/Experimentation has be...
6. Commitment/ Experience of inventors•   Lead Inventor Profile•   Scientific reputation of Group.•   Existence of a Proje...
Starting Point: The Invention Disclosure Form• What do you think your invention is?• How and why does it work?• How does y...
Invention Disclosure Form• In which markets do you think this invention or  design will find most success?• List three key...
Invention Disclosure Form• The completed form should be  treated as confidential  information• The Invention Record Should...
Availability of Disclosure Forms• Often available for download from the  organisation web-site   – http://otl.stanford.edu...
Following Disclosure• Assessment Process usually begins with an  interview with the inventor to gain a better  understandi...
Due diligence process• Many Universities have developed Disclosure  Forms that will also permit full Due Diligence to  com...
Structuring the Tech Assess Process           Existing Methodologies• The Texas TechAssess™ Scorecard• An assessment tool ...
Translation• A process developed to fit a model.• This is a useful example…..• Be critical!• Think about adaptation and  l...
WARNING: Numerical evaluation sheets• TOOLS.• It help us to avoiding missing something we  should consider. (useful check ...
Who takes the Decision to protect?• The has the authority? (Rector?  Dean? Head of Institute?)• Who recommends? (IP  Advis...
How is the decision taken?• In a fair, timely and transparent manner!• Rating and ranking may help.    Inventions are awar...
Rating and RankingSee example handouts:• “investment_conversion_elig  ibility_form”• “investment_ranking_form”            ...
Return of Rights• If the PRO decides to waive its  rights to the invention, then the  invention may be re-assigned to the ...
Confidentiality• An invention and associated information must remain  confidential prior to any IP protection.• The Univer...
SummaryGood Technology and Market Assessment  Decision are:• Not the result of crystal ball gazing!• Are:   Structured and...
Pitanja i komentari• lisa.cowey@icip-serbia.org  schafernaker@secep.rs• www.icip-serbia.org• www.secep.rs           Finans...
Technology Transfer, Technology Brokerage             Beograd June 2011. godine             Intellectual Property Office  ...
Session 5   Technology transfer through   Licensing and Spinout.  Lisa Cowey  Key Expert (Competitiveness and  Innovation)...
Outline of talk•   Rational•   Definitions•   Models•   International and Local Examples             Finansira Evropska un...
Appendix A: Technology Transfer Process                                                       Disclosure                  ...
The need for commercialisation• A Patent is a bill   – Total cost of a sample European Patent ~€32 000   – Total cost of a...
From IP strategy to marketing strategy Key to marketing strategy: Deciding on best Route to Market to  commercialise inven...
A spinout company  Definition of “spinout company”• “the term used to describe a limited company set    up to develop and ...
Spinout vs. Startup?• Spinout: in UK/ USA a term usually reserved for  companies in which the university has an equity sta...
Spinout vs. LicensingLicensing may be most appropriate if:• it is a niche technology• there is a single patent• the techno...
Spinout vs. LicensingSpin-outs originating from research institutions are usually set up when:• Licensing is not possible!...
Spinout vs. LicensingOther considerations prior to starting a spinout:• entry to the market by a new company is  relativel...
Why is Licensing preferably to spinout?Spinout is more complicated than licensing•    Spinouts require more Infrastructure...
University spinout activity USA•~12% of USA university inventions are realisedthough the medium of technology transfer via...
Oxford University• Total external investment to date in spin-  outs (post 1997): £336m• £36m Seed/Business Angels &• £300m...
USA/UK spinout: Equity DivisionWhen a spinout company is created then the stakeholders may hold equity shares in the new v...
IK/ USA Spinout Company Creation  Institute                            Dr Zeleni   Dr Crveni 30 shares                    ...
Round 1 Investment Investor             Institute               Dr Zeleni   Dr Crveni100 shares           30 shares       ...
Option Pool Investor   Institute Dr Zeleni                      Dr Crveni Option Pool100 shares 30 shares 35 shares       ...
Control and Value•Dilution reduces control       •100% Full control       •<50% Shared control•Value of shares should incr...
Supporting and Nurturing a Spin-out•   Strategy•   Seed funding•   Incubation•   Raising Finance•   Management Team•   Bus...
Spin-out StrategyResearch Group                                            New Managing     Head                          ...
Oxford University Challenge Seed Fund  • Launched in 1999 – £4 million     – Development projects, spin-out seed equity   ...
Incubation: Reducing Risk• Begbroke Science &  Business Park• Owned & operated by  Oxford University• University research ...
Raising FinanceThe commercialisation of an invention can be lengthy and  expensive. The venture will pass though a number ...
Finansira Evropska unija
Funding – Bridging the “Equity Gap• Start-ups:   – Bank   – FFF (Friends, Family, “Fools”!)• Spinouts:   – University Seed...
Oxford Spinout in ContextOxford University• 1 patent per week, 8 new companies per year (average)• Own Seed Capital Fund a...
Spinout: Essential Ingredients                        t                     en                                           A...
Spinout in Serbia• SBAN• Novi Sad University and Technology  Incubator Model          Finansira Evropska unija
Pitanja i komentari• schafernaker@secep.rs• lisa.cowey@icip-serbia.org• www.secep.rs• www.icip-serbia.org           Finans...
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  1. 1. Republika Srbija MINISTARSTVO EKONOMIJE I REGIONALNOG RAZVOJATechnology Transfer, Technology Brokerage Beograd June 2011. godine Intellectual Property Office Finansira Evropska unija
  2. 2. Republika Srbija MINISTARSTVO EKONOMIJE I REGIONALNOG RAZVOJAIntroducing Workshop 2 Support to the commercialisation of academic knowledge Andrzej Schafernaker, Team Leader SECEP Finansira Evropska unija
  3. 3. Session 1 Technology Transfer from public research organisations: developing 3rd stream activityLisa CoweyKey Expert (Competitiveness and Innovation) ICIP Finansira Evropska unija
  4. 4. Outline of talk• Economic, Political and Legislative Drivers of Innovation from PROs.• Direct and indirect benefits of 3rd stream activity.• Models of Technology Transfer.• Technology Transfer Processes Finansira Evropska unija
  5. 5. Innovation from Public Research Organisations (PROs)PRO Mission:• Teaching• Research• Innovation (3rd Stream)• Why are Universities and Research Institutes being encouraged to get involved in technology transfer…? Finansira Evropska unija
  6. 6. Economic And Political Drivers of Innovation University-Industry technology transfer plays an acknowledged role in economic growth and technological advance. University licensing activity USA (1999) generated 270,000 jobs, $5 billion in tax revenues $40 billion in total economic activity Finansira Evropska unija
  7. 7. University spinout activity USA• ~12% of USA university inventions are realised though the medium of technology transfer via a new spinout company.• These new companies have a disproportional success with over 70% of USA start-ups founded since 1980 still in operation• 20% of spinouts from the Massachusetts Institute of technology (MIT) going on to experience Initial Public offering (IPO) Finansira Evropska unija
  8. 8. UK University Activity (2001-2002)• turnover of spin-off companies increased from £212m to £289m• number of people employed by spin-offs increased from 10,500 to 12,000.• number of new patents filed rose 8 %, from 896 to 967.• Income from IP increased 83 %, up from £18m to £33m Finansira Evropska unija
  9. 9. Economic And Political Drivers of Innovation• University innovation as commercialisation of an invention, is thus considered an important mechanism for economic activity. Finansira Evropska unija
  10. 10. Why 3rd Stream activities?It’s the economy stupid! James Carville (1992 Clinton Presidential campaign) Finansira Evropska unija
  11. 11. Direct vs. In-direct benefitsTechnology transfer is not a large revenue generator for the universityUK Lambert Review of 2003 –• unrealistic for universities to seek large financial returns.• public funding for technology transfer offices at universities is to “enable universities to maximise the wider impact of their research”.Stanford University (USA):• primary reason for engaging in technology transfer is to “create the greatest possible economic and social benefits, whether or not they accrue to the university. Finansira Evropska unija
  12. 12. In-direct BenefitsStanford• remains a leader in technology transfer• has generated more start ups than any other USA university.• remains a model for many other universities both nationally and internationally. Finansira Evropska unija
  13. 13. Indirect benefits to the UniversitiesIncreased potential for :• participating in interesting and well resourced collaborative projects• generating publishing opportunities• enhancing the reputation of the university and research group• attracting high calibre students• improving the chances of long term survival of the research group. Finansira Evropska unija
  14. 14. Perceived Government Benefits• National industry as a whole• Related employment prospects• Induced investment into the National technology sector Finansira Evropska unija
  15. 15. Legislative Drivers of InnovationLegislation: considered to be one of the driving forces of university technology transfer.Who owns the IPR?• 1981 USA Bayh-Dole Act• 1985 UK Devolution of IPR rights from British Technology Group to Universities• Legislation has made it possible for R&D institutes and universities to develop their own IPR policies.How can you exploit your IPR?• Legal transfer of ownership rights.How can you protect your IPR?• Increasingly, universities are using legislation to fight infringement. Finansira Evropska unija
  16. 16. Commercialisation of inventionsLegislation allows Universities/ Faculties/ PROs tohold the rights to IPR (“ownership”).Once ownership of an invention has beenunambiguously assigned then innovation can takeplace.Inventions are commercialised though a process of“technology transfer”. Finansira Evropska unija
  17. 17. Technology Transfer• Definition• Technology Transfer - “the process whereby inventions or intellectual property from academic research is licensed or conveyed through use of rights to industry” (Association of University Technology Managers 1998)• Intellectual property - A product of the intellect that has commercial value. Finansira Evropska unija
  18. 18. Realising Value: Practical routes for IP TransferTechnology can be transferred and knowledge can be exchange through one of the following methods: • royalties and fees from licensed IPRs based on staff innovations and inventions; • university owned companies and joint ventures; • consultancy services; • research contracts; • sponsored research. Finansira Evropska unija
  19. 19. Main stages of Technology Transfer• Identification• Capture• Evaluation• Market Finansira Evropska unija
  20. 20. Technology Transfer Models• All generic models of Technology Transfer or Innovation include: – General Processes – Decision Points (“Controls”) – Documentation (“Tools”) Finansira Evropska unija
  21. 21. General processes • Disclosure • Technology Evaluation • Market Evaluation • Legal (IPR protection) • Route to Market: Licence/Spinout modelsIn all cases, the process will protect and then exploit IP. Finansira Evropska unija
  22. 22. Models of Technology TransferDeal Based Model (Just in Time)• rate of production of IP = expected rate of transfer/ licensing.• prime goal to keep inventory low = minimise un- reimbursed patent expenses.• Result: Institution may lose potential innovations because they have to be abandoned.Inventory Model• does not link the decision to patent to the IP marketing activities decouples the product production from product sales• Result: Institution may build a substantial inventory of unlicensed patent Institution may incur substantial un-reimbursed expenses. Finansira Evropska unija
  23. 23. Deal based vs. Inventory?• The processes, controls and human resources required for efficient implementation of technology transfer will depend on which of the two models predominates.• The AUTM 2000 Annual Survey suggests that a licensing professional can manage approximately twenty-one new inventions a year and produce about seven licensing deals per year. Finansira Evropska unija
  24. 24. Commercial Exploitation of R&D Finansira Evropska unija
  25. 25. Commercial Exploitation of R&DFinansira Evropska unija
  26. 26. Appendix A: Technology Transfer Process Disclosure General Process Evaluation Research and Decision Marketing Discovery & Invention Document Legal Disclosure Commercial Exploitation of R&D Post Licence IP Non-Confidential Protection Summary and = TTAG Review Due Diligence & Marketing Strategy Commercial• Technology Transfer Process Assessment License to Spin-out Documented External or Spin-Out Technology Company License? Opportunity Market to Negotiate & No Licensee Yes Potential Execute Licence Yes Further Interested? Agreement Decision to Licensees Funding Proceed Needed? No Distribution of Licence Confidential Income Release to No Licensee Information Researcher(s) Found Exchange Maintenance of Licence and Patents Finansira Evropska unija
  27. 27. DocumentationThe following documents are normally required to supportthe Innovation process.• Disclosure• Assignment of Rights• Initial Assessment of the Technology Opportunity• Application for IP Protection: •Patent •Trademark •Copyright •Registered designs• Tech- Assessment to assess route to market• License Templates/ Spinout business plan Finansira Evropska unija
  28. 28. Stage I Invention Assessmentto assess optimum management strategy for commercialisation • Claims to Ownership (due diligence) • Feasibility and Scope of Protection • Strength of the technology • Commercial Potential and Value • Stage of Development (EUROs?) • Commitment of inventor (s) Finansira Evropska unija
  29. 29. Disclosure•first signal that an invention has been made•a method of formalising the confidentialdescription of an invention•a basis for determining patentability•the technical information required to draft apatentAlso used to establish the rights to an inventionthat cannot be patented but may be protected byother means e.g. copyright. Finansira Evropska unija
  30. 30. Appendix A: Technology Transfer Process Disclosure General Process Evaluation Research and Decision Marketing Discovery & Invention Document Legal Disclosure Commercial Exploitation of R&D Post Licence IP Non-Confidential Protection Summary and = TTAG Review Due Diligence & Marketing Strategy Commercial• Technology Transfer Process Assessment License to Spin-out Documented External or Spin-Out Technology Company License? Opportunity Market to Negotiate & No Licensee Yes Potential Execute Licence Yes Further Interested? Agreement Decision to Licensees Funding Proceed Needed? No Distribution of Licence Confidential Income Release to No Licensee Information Researcher(s) Found Exchange Maintenance of Licence and Patents Finansira Evropska unija
  31. 31. DisclosureThe key information required on the disclosureform should include:•Title of the invention•Name(s) of the inventor(s)•Design date and date put into practice•Sponsorships where relevant•A description of the invention•Publication dates, existing or projected, ifapplicable Finansira Evropska unija
  32. 32. ExamplesExamples of disclosure formsUniversity of Stanford:http://otl.stanford.edu/inventors/resources/disclosure.pdfMIT:http://web.mit.edu/tlo/www/downloads/doc/techdisclosureelectronicfrmdoc.docUniversity of Chicago:http://uctech.uchicago.edu/inventors/inventiondisclosure.shtmlSEE CD ROM Finansira Evropska unija
  33. 33. Premature DisclosureWhat qualifies as: “PrematureDisclosure”? Discussion Finansira Evropska unija
  34. 34. Premature DisclosureThe public release of information relating to aninvention before a patent has been filed.•abstracts•poster sessions•seminars•shelved thesesPremature disclosure usually disqualifies aninvention from being patented Finansira Evropska unija
  35. 35. Non-Disclosure Agreements• Examples of CDAs• Stanford University see:• http://otl.stanford.edu/pdf/cda.pdf• MIT see:• web.mit.edu/tlo/www/downloads/pdf/ONE_WAY.IN_1998 -03-03.pdf• web.mit.edu/tlo/www/downloads/pdf/TWO_WAY_1998- 03-02.pdf• web.mit.edu/deshpandecenter/downloads/NDA_Deshpa nde_Center_2005.pdf Finansira Evropska unija
  36. 36. Assignment of Rights• Inventor Assignment of Invention Form •transfers ownership of the invention to the University of Institute• University or Institute Assignment of Invention •permits the University or Institute Technology Transfer Office to patent and license the invention.The University of Virginia send a one dollar coin to eachinventor “in consideration of the assignment of theinvention to the University” and a letter of thanks! Finansira Evropska unija
  37. 37. Stage II Assessment of the Technology Opportunity•Investigation of Patentability andmarketability.•During the assessment or evaluationperiod, an invention may be safely disclosedoutside the institution under the protection ofa Confidential Disclosure Agreement orCDA. Finansira Evropska unija
  38. 38. Appendix A: Technology Transfer Process Disclosure General Process Evaluation Research and Decision Marketing Discovery & Invention Document Legal Disclosure Commercial Exploitation of R&D Post Licence IP Non-Confidential Protection Summary and = TTAG Review Due Diligence & Marketing Strategy Commercial• Technology Transfer Process Assessment License to Spin-out Documented External or Spin-Out Technology Company License? Opportunity Market to Negotiate & No Licensee Yes Potential Execute Licence Yes Further Interested? Agreement Decision to Licensees Funding Proceed Needed? No Distribution of Licence Confidential Income Release to No Licensee Information Researcher(s) Found Exchange Maintenance of Licence and Patents Finansira Evropska unija
  39. 39. Application for IP Protection •Provisional Patent Application •Copyright Application •Trademark Application •Design rights •Database rights •(Others) Finansira Evropska unija
  40. 40. Appendix A: Technology Transfer Process Disclosure General Process Evaluation Research and Decision Marketing Discovery & Invention Document Legal Disclosure Commercial Exploitation of R&D Post Licence IP Non-Confidential Protection Summary and = TTAG Review Due Diligence & Marketing Strategy Commercial• Technology Transfer Process Assessment License to Spin-out Documented External or Spin-Out Technology Company License? Opportunity Market to Negotiate & No Licensee Yes Potential Execute Licence Yes Further Interested? Agreement Decision to Licensees Funding Proceed Needed? No Distribution of Licence Confidential Income Release to No Licensee Information Researcher(s) Found Exchange Maintenance of Licence and Patents Finansira Evropska unija
  41. 41. Market Assessment• Market for invention• Number of potential market sectors• Total Market size• Market Profile• Competitive Market Structure• Economic benefits of invention.• Market inertia to change• Estimated Royalty rates• Anticipated life-span of market• Estimated payback period Finansira Evropska unija
  42. 42. LicenseLicense Agreement:•20 + page document•dense legal prose•first draft created by the Licensor•Allows all IP Policy to be stated up-frontMultiple drafts before agreement is reached.(Even starting a spinout may require the IPRto be licensed to the new company) Finansira Evropska unija
  43. 43. Outcomes of the Technology Transfer Process •Invention Protection •Commercialization •Successful Innovation •Royalties •Equity shares Finansira Evropska unija
  44. 44. Pitanja i komentari• schafernaker@secep.rs• lisa.cowey@icip-serbia.org• www.secep.rs• www.icip-serbia.org Finansira Evropska unija
  45. 45. Technology Transfer, Technology Brokerage Beograd June 2011. godine Intellectual Property Office Finansira Evropska unija
  46. 46. Session 2 I Universities, Public Research Institutions and Intellectual Property Rights. Lisa Cowey Key Expert (Competitiveness and Innovation) ICIP Finansira Evropska unija
  47. 47. Outline of talk• What is a PRO IP Policy?• Why are they important?• Situational examples.• What should an IP Policy cover?• What should an IP Policy achieve?• Examples of IPRs for Universities and research groups. Finansira Evropska unija
  48. 48. What is “IP Policy”?• Legal Ownership of “IP” (Rights Holder)• Coverage of the IPRs• Commercialization rights and responsibilities• Commercialization process• Benefit sharing• Other issues including “conflict of interest” Finansira Evropska unija
  49. 49. Legal Ownership/ Rights Holding• Who can:• Sell it?• Rent it?• Develop it? Who owns this piece of land? Finansira Evropska unija
  50. 50. “Why do we need IP Policy anyway?”• Gatorad!• Invented in 1965 by researchers at the University of Florida and named in honour of the University’s football team.• When an idea makes a lot of money then the number of people who claim to have been involved increases exponentially Finansira Evropska unija
  51. 51. “Me too” claim to ownership of good IPNumber of people who claim “it was my idea too!” Money (or kudos!) Finansira Evropska unija
  52. 52. Disputed ownership: Outcome? Money made by the legal profession in resolving disputesMoney made by the inventors Cost of the dispute No. of people who claim ownership… Finansira Evropska unija
  53. 53. “Nothing to do with me” claim to ownership of bad IPNumber of people who claim “it was my idea too!” Legal threats from IP purchaser Finansira Evropska unija
  54. 54. Who is responsible when Bad IP is sold?The Oxford Sugar Beat and Crop Dryers Ltd• Established:1926• Patents: Yes• Ownership? – Unclear - University or Founder?• Patent Claims? – LOTS! Finansira Evropska unija
  55. 55. What does the Patent Promise?• GB344080 - 3rd May 1931• Inventor: BRYNAR JAMES OWEN (M.A., iD.Sc., M.Eng., Director of the Institute of Agricultural Engineering, University of Oxford, Oxford)• An improved apparatus for drying crops artificially. Finansira Evropska unija
  56. 56. Who is responsible when Bad IP is sold?• Outcome: Litigation• University was sued in 1931 for £750,000• This was greater than the governments total annual grant to the University!• Direct outcome: Company settled for 10% of claim, mainly paid by the Ministry of Agriculture UK• Indirect outcome: Oxford University wanted nothing to do with Innovation, commercialisation and spinout companies for a long, long time!• Who is “responsible” for a result that emerges from a University Research Laboratory? (who is responsible for side effects!?) Finansira Evropska unija
  57. 57. “Clean” IP• Ownership is clear• Undisputed• Smoothes the path of technology transfer• Keeps Universities out of the Law courts• Underpinned by a good IP Policy Finansira Evropska unija
  58. 58. Issues to be addressed by an IP Policy1. coverage of intellectual property policy;2. ownership of intellectual property;3. disclosure of intellectual property;4. marketing, commercialization and licensing of patents;5. distribution of income;6. rights and obligations of an inventor and the institution;7. other pertinent issues. Finansira Evropska unija
  59. 59. Do all IP Policies look the same?• No! – Effective IP Policy reflects local conditions – they may not transfer successfully. – read and reflect but do not borrow indiscriminately• All IP Policies address the same issues. – How they deal with them differs. – Examples? Finansira Evropska unija
  60. 60. Oxford University• The University takes ownership and responsibility for commercialisation of IP through the TTO “Isis Innovation”.• Benefits are shared with inventors according to a published “revenue and benefits sharing scheme”.• The University reserves the right to take an equity stake in a spinout company. – Lots of licensing deals – The Oxfordshire area has many “spinouts”. Finansira Evropska unija
  61. 61. Cambridge University• For many years the University had a policy of giving legal ownership of IP to the inventors.• The University “waived all rights” to ownership and benefits. – Few University licensing deals – The Cambridgeshire area has many “start-ups”. (“The Cambridge phenomenon”) – Was the area of science influential?• Policy is being reversed Finansira Evropska unija
  62. 62. Oxford vs. Imperial• Oxford IP policy includes undergraduate students• Imperial College London IP Policy excludes undergraduate students – Same “issue” (who is included?) – Different decision Finansira Evropska unija
  63. 63. Oxford University vs. Oxford Brookes University • Oxford University commercialises though a wholly owned legal company “Isis Innovation Ltd” • Oxford Brookes University commercialises through an internal University department “The RBDO”. – Same issue: who is responsible for commercialisation? – Different decision regarding the “vehicles” Finansira Evropska unija
  64. 64. Revenue Sharing Model: Cornell Research Foundation of Cornell University GROSS ROYALTIES Less assignable patent and licensing costs NET ROYALTY INCOME CORNELL RESEARCH FOUNDATION INVENTOR’S SHARE Operation and unrecovered patents and 50 %< US$100,000 marketing costs for all inventions 35 % 25 %> US$100,000 REMAINING NET ROYALTY INCOME Shared by: Unit and Sub-unit University Inventor’s Research Program 40 % 60% Finansira Evropska unija
  65. 65. Revenue Sharing Model: University of OxfordTangible Financial Benefits to Scientists, Departments and UniversityLicensing Revenue sharing at Oxford University Total net Researchers University Department Isisrevenue personally General Fund Funds Innovationto £72k 61% 9% 0% 30%to £720k 31.5% 21% 17.5% 30%over £720k 15.75% 28% 26.25% 30% Finansira Evropska unija
  66. 66. Differences in Processes: University of Virginia Patent Foundation Finansira Evropska unija
  67. 67. University of Reading UK Appendix A: Technology Transfer Process Disclosure General Process EvaluationResearch and Decision Marketing Discovery & Invention Document Legal Disclosure Post Licence IP Non-Confidential Protection Summary and = TTAG ReviewDue Diligence & Marketing Strategy Commercial Assessment License to Spin-out Documented External or Spin-Out Technology Company License? Opportunity Market to Negotiate & No Licensee Yes Potential Execute Licence Yes Further Interested? Agreement Decision to Licensees Funding Proceed Needed? No Distribution of Licence Confidential Income Release to No Licensee InformationResearcher(s) Found Exchange Maintenance of Licence and Patents Finansira Evropska unija
  68. 68. Why do these differences occur? Ownership/ Right Holders• Reasons are often highly practical• Who has the resources (time, money and inclination) to undertake commercialisation?• Inventors at Cambridge may have felt that it was “their idea” but they lacked the resources to commercialise.• A dedicated TTO and a fair benefit sharing scheme can be the solution. Finansira Evropska unija
  69. 69. TTO a department or a separate Unit?• Internal department – an extension of the University -more acceptable to researchers? (University Zagreb) Vs.• Legal advantages of separate legal entity (sue the TTO and not the University) (Rudjer Innovations) And• Cultural differences of a “business unit” (the need to sit mid-way between 2 environments) Finansira Evropska unija
  70. 70. Regional Examples (Croatia)• University Zagreb (Rectorate Unit)• (Medical School Faculty TTO)• Rudjer Boskovic Institute• (RI doo)• University of Rijeka (Rectorate Unit + STeP doo)• University Osijek: Medical School TTO + strategic relationship with Ceder Sinai Medical Hospital , Los Angeles SAD Finansira Evropska unija
  71. 71. Undergraduates included or excluded• Is the value of undergraduate IP worth the effort to commercialise? – Leave then outside the system vs.• Is there a long term benefit in encouraging and supporting undergraduates to become more entrepreneurial? – Draw them into the system Finansira Evropska unija
  72. 72. Process Difference• USA vs. European – First to Patent (Europe) – First to Publish (USA)• Internal vs. External IP Evaluation committee• Transfer of ownership vs. transfer of rights to commercialise Finansira Evropska unija
  73. 73. Deal with the Issues YOUR way• To summarise• All IP Policies deal with the same set of issues• HOW they deal with them reflects – Country – Local Laws (National and by-laws) – Resources – Stakeholder preference Finansira Evropska unija
  74. 74. Issues to be addressed by an IP Policy1. coverage of intellectual property policy;2. ownership of intellectual property (rights holding);3. disclosure of intellectual property;4. marketing, commercialization and licensing of patents;5. distribution of income;6. rights and obligations of an inventor and the institution;7. other pertinent issues. Finansira Evropska unija
  75. 75. IP Policy: ObjectivesAn Intellectual Property Policy should help to achieve the following objectives:1. Public Benefit2. Protection of Academic Freedom3. Fair Distribution4. Timely and Efficient Technology and Knowledge Transfer5. Promotion not inhibition6. Establish standards7. Promote mutually beneficial rewards8. Compliance with applicable laws and regulations9. Ensure awareness of differing IP systems10. Conflict Resolution Finansira Evropska unija
  76. 76. Abdicating Control vs. Taking Control• Fear and uncertainty • IP Policy• Disinclination to engage in Innovation activities • Conflict of Interest Policy • TTO/ Designated Commercialisation Unit Finansira Evropska unija
  77. 77. Useful Resource• World Intellectual Property Organisation (WIPO): Guidelines on Developing IP Policy for Universities and R&D Organizations.• http://www.wipo.int/export/sites/www/uipc/en/guidelines/pdf/ip_policy.pdf• Regional Examples of IP Policies and TTO Operation on CD ROM Finansira Evropska unija
  78. 78. Pitanja i komentari• schafernaker@secep.rs• lisa.cowey@icip-serbia.org• www.secep.rs• www.icip-serbia.org Finansira Evropska unija
  79. 79. Session 2 II Understanding Intellectual Property Rights. Mr Nataša Milojević, Savetnik Zavod za intelektualnu svojinu/ Finansira Evropska unija
  80. 80. Technology Transfer, Technology Brokerage Beograd June 2011. godine Intellectual Property Office Finansira Evropska unija
  81. 81. Session 3Technology and Market Evaluation. Lisa Cowey Key Expert (Competitiveness and Innovation) ICIP Finansira Evropska unija
  82. 82. Overview• Evaluation as part of the TT processes• Decision making aids (established methods, processes and procedures)• Use of decision trees and rating and ranking methods. Finansira Evropska unija
  83. 83. Appendix A: Technology Transfer Process Disclosure General Process EvaluationResearch and Decision Marketing Discovery & Invention Document Legal Disclosure Post Licence IP Non-Confidential Protection Summary and = TTAG ReviewDue Diligence & Marketing Strategy Commercial Assessment License to Spin-out Documented External or Spin-Out Technology Company License? Opportunity Market to Negotiate & No Licensee Yes Potential Execute Licence Yes Further Interested? Agreement Decision to Licensees Funding Proceed Needed? No Distribution of Licence Confidential Income Release to No Licensee InformationResearcher(s) Found Exchange Maintenance of Licence and Patents Finansira Evropska unija
  84. 84. Technology transfer models• Inventory based – Patent those discoveries that look promising, market and license later. – Institution may build a substantial inventory of unlicensed patents – Institution may incur substantial un-reimbursed expenses.• Deal based – Market first, only patent if deal is found. – Rate of production of IP = expected rate of transfer/ licensing – Inventory kept low, minimising un-reimbursed patent costs Finansira Evropska unija
  85. 85. Evaluation Continuum Market Assessment Commercial Potential Protectability Stage of Development OwnershipTechnology Assessment Time Finansira Evropska unija
  86. 86. Tech- Assessment• to assess optimum management strategy for commercialisation• Traffic Light system Go Proceed with caution STOP! Finansira Evropska unija
  87. 87. Technology/ Invention Assessment6 Pillars approach1. Ownership2. Feasibility and Scope of Protection (IPR)3. Strength of Technology4. Commercial Potential and Value5. Stage of Development6. Commitment of InventorsIf one pillar is weak/ non existent = see red! Finansira Evropska unija
  88. 88. Legal Ownership (Who owns this piece of land?)• Who can:• Sell it?• Rent it?• Develop it? Finansira Evropska unija
  89. 89. 1. Ownership• Assignment – Have rights to this technology been pre-assigned to a third party?• Joint Inventorship – Number of co-owner institutions• Funding (Source of funding) – e.g., corporate, state, etc.• Other Agreements – Material Transfer Agreements, Memorandums of Understanding, etc.• Inventorship – Number of inventors/authors Finansira Evropska unija
  90. 90. 2: Feasibility and Scope of Protection• Timing – Publications exist or are planned• Strength – Ability to work around patent• Enforcement – Infringement detection• Security – Ability to exclude others from practicing• Challenge – Aggressive area of US or Worldwide Patent/Copyright activity• Reach – Worldwide protection Finansira Evropska unija
  91. 91. Patenting: we can- but should we?• Use patent decision trees• See Handout Finansira Evropska unija
  92. 92. Patenting Decision Guide Finansira Evropska unija
  93. 93. Patenting Decision Guide SR Finansira Evropska unija
  94. 94. Factors effecting the Protection Decision• For patenting decisions – look at the patterning decision guideHowever… also think about• The availability of funding• The existence of other projects• The other pillars! Finansira Evropska unija
  95. 95. 3. Strength of Technology• Uniqueness of the invention• Emerging alternatives• Novelty of the invention• Breadth/ Edge of technology• Applicability of technology (integration)• Legislative issues• Standards• Environmental Impact You may need impartial experts to address these issues Finansira Evropska unija
  96. 96. 4. Commercial Potential and Value• Ability to identify market need• Potential market size• Availability of market contacts• Feedback from industry contacts• Market Location• Market Place Competition• Ability to compete in the market place• Time to Market• Regulations• Significance• Licensing Barriers• Timeliness… etc….etc Do not fall in to the trap of analysis paralysis! Finansira Evropska unija
  97. 97. 5. Stage of Development• Understanding – Ability to understand the IP• Reduction – Simulation/Experimentation has been done• Trial History (Medical/ Health Sciences) – certain information required by the regulatory processes has been compiled.• Prototypes – The technology demonstration has occurred• Production – Amount of scale up needed• Financial – Investment needed for development – Investment needed for use Link strongly to 6: Commitment of the inventors Finansira Evropska unija
  98. 98. 6. Commitment/ Experience of inventors• Lead Inventor Profile• Scientific reputation of Group.• Existence of a Project “Champion”• Level of support available.• Existing commercial Links The importance of this issue is often underestimated Finansira Evropska unija
  99. 99. Starting Point: The Invention Disclosure Form• What do you think your invention is?• How and why does it work?• How does your invention improve on the present situation and what is new about it?• Are there any other uses of the invention?• Do you know of any published literature relevant to your invention? Have you done any searching for published literature, and if so where?• Has the invention been tested in the laboratory or has it been used? If so please give results. Finansira Evropska unija
  100. 100. Invention Disclosure Form• In which markets do you think this invention or design will find most success?• List three key commercial benefits of the invention/ design.• Name any commercial contact who my be interested in this invention.• Attach any relevant sketches. Finansira Evropska unija
  101. 101. Invention Disclosure Form• The completed form should be treated as confidential information• The Invention Record Should Be Signed And Dated By All Named Researchers. Finansira Evropska unija
  102. 102. Availability of Disclosure Forms• Often available for download from the organisation web-site – http://otl.stanford.edu/inventors/resources/di sclosure.pdf• Becoming available on-line – http://otl.stanford.edu/inventors/disclosures. html• Generic (EN/SR) Example of Disclosure form on CD ROM Finansira Evropska unija
  103. 103. Following Disclosure• Assessment Process usually begins with an interview with the inventor to gain a better understanding of : – the scientific merit and – to determine if there are any commercial partners already in the inventors mind.• The Assessment Process includes a due diligence process to establish whether the invention can be protected.• Due Diligence takes place very early in the Assessment Process. Finansira Evropska unija
  104. 104. Due diligence process• Many Universities have developed Disclosure Forms that will also permit full Due Diligence to commence – http://www.isis-innovation.com/researchers/IP-1.pdf• Some have Disclosure and Due Diligence in a single booklet which covers all aspects of the University IP Policy – www.brookes.ac.uk/res/policies/ip_policy.pdf Finansira Evropska unija
  105. 105. Structuring the Tech Assess Process Existing Methodologies• The Texas TechAssess™ Scorecard• An assessment tool used to organize and communicate the various business aspects that affect the ability to successfully transfer technology.• Offers an organized method to study areas of strength and weakness in an inventions potential for technology transfer.• Each area contains subtopics that weigh the potential impact of an inventions characteristics on its potential for successful transfer.• Demonstration. Finansira Evropska unija
  106. 106. Translation• A process developed to fit a model.• This is a useful example…..• Be critical!• Think about adaptation and localisation for your own use.• Do not blindly apply without thought. Finansira Evropska unija
  107. 107. WARNING: Numerical evaluation sheets• TOOLS.• It help us to avoiding missing something we should consider. (useful check lists )• BUT do not rely just on a number to take a decision!• 49% out?• 50% in?• Use spreadsheet analysis to inform not replace decision making. Finansira Evropska unija
  108. 108. Who takes the Decision to protect?• The has the authority? (Rector? Dean? Head of Institute?)• Who recommends? (IP Advisory Group)• Who briefs? (UTT, Consultants, Experts) Finansira Evropska unija
  109. 109. How is the decision taken?• In a fair, timely and transparent manner!• Rating and ranking may help. Inventions are awarded points (rating) Inventions are compared (ranking) Permits optimum use of limited funds The TechAssess ScoreCard™ is a "Rating/Ranking" approach to the assessment of technologies. Finansira Evropska unija
  110. 110. Rating and RankingSee example handouts:• “investment_conversion_elig ibility_form”• “investment_ranking_form” Finansira Evropska unija
  111. 111. Return of Rights• If the PRO decides to waive its rights to the invention, then the invention may be re-assigned to the inventor(s). – free to commercialise it at their own risk and cost. Finansira Evropska unija
  112. 112. Confidentiality• An invention and associated information must remain confidential prior to any IP protection.• The University usually encourages publication, provided that the implications for possible commercial exploitation and existing confidentiality obligations are considered first.• If you wish to publish or make any public disclosure concerning a possible invention you should first seek advice on the most appropriate form of action.• USE “CDA” and “NDA”. Finansira Evropska unija
  113. 113. SummaryGood Technology and Market Assessment Decision are:• Not the result of crystal ball gazing!• Are: Structured and Balanced (6 pillars) Based on informed decision and experience Consider multiple view-points Finansira Evropska unija
  114. 114. Pitanja i komentari• lisa.cowey@icip-serbia.org schafernaker@secep.rs• www.icip-serbia.org• www.secep.rs Finansira Evropska unija
  115. 115. Technology Transfer, Technology Brokerage Beograd June 2011. godine Intellectual Property Office Finansira Evropska unija
  116. 116. Session 5 Technology transfer through Licensing and Spinout. Lisa Cowey Key Expert (Competitiveness and Innovation) ICIP Finansira Evropska unija
  117. 117. Outline of talk• Rational• Definitions• Models• International and Local Examples Finansira Evropska unija
  118. 118. Appendix A: Technology Transfer Process Disclosure General Process Evaluation Research and Decision Marketing Discovery & Invention Document Legal Disclosure Commercial Exploitation of R&D Post Licence IP Non-Confidential Protection Summary and = TTAG Review Due Diligence & Marketing Strategy Commercial• Technology Transfer Process Assessment License to Spin-out Documented External or Spin-Out Technology Company License? Opportunity Market to Negotiate & No Licensee Yes Potential Execute Licence Yes Further Interested? Agreement Decision to Licensees Funding Proceed Needed? No Distribution of Licence Confidential Income Release to No Licensee Information Researcher(s) Found Exchange Maintenance of Licence and Patents Finansira Evropska unija
  119. 119. The need for commercialisation• A Patent is a bill – Total cost of a sample European Patent ~€32 000 – Total cost of a sample Euro-PCT Patent ~€47 000• A license is a revenue stream – In 1995 the University of California system earned $58.5 million in licensing income (fees and royalties)• Successful marketing ensures the conversion from money out to money in Technology Transfer = ROI (Return On Investment) Finansira Evropska unija
  120. 120. From IP strategy to marketing strategy Key to marketing strategy: Deciding on best Route to Market to commercialise invention: license it to established company or spin out (form a new company) Finansira Evropska unija
  121. 121. A spinout company Definition of “spinout company”• “the term used to describe a limited company set up to develop and exploit intellectual property (IP) commercially.” Finansira Evropska unija
  122. 122. Spinout vs. Startup?• Spinout: in UK/ USA a term usually reserved for companies in which the university has an equity stake.• Start-up: the university does not have equity, but licenses IP to the company in exchange for monetary royalties only.• Spinoff (but not out..): company still embedded in the Research Organisation. Has not fully transferred knowledge and technology. Terms are often used loosely and interchangeably Finansira Evropska unija
  123. 123. Spinout vs. LicensingLicensing may be most appropriate if:• it is a niche technology• there is a single patent• the technology fits an existing companys IP/product portfolio• licensing is a common strategy within the industry sector Finansira Evropska unija
  124. 124. Spinout vs. LicensingSpin-outs originating from research institutions are usually set up when:• Licensing is not possible! – there is no existing business to approach about a significant breakthrough in a field of work.• Strength of then IP sufficient to warrant extra effort, risk, infrastructure and delay in receiving revenue. – the work has clear possibilities to generate many products and applications and so potentially could be extremely valuable. – “platform opportunities” or “disruptive technologies”.• Further investment is required in the technology and associated infrastructure in order to reach the market and this can only be secured by having a legal entity. Finansira Evropska unija
  125. 125. Spinout vs. LicensingOther considerations prior to starting a spinout:• entry to the market by a new company is relatively easy with few significant barriers• the marketplace is fragmented with a lot of small companies• there is a group of founders motivated to start a company• it is likely that investment funds can be raised for a company• there is a financial exit route for investors, including the University Finansira Evropska unija
  126. 126. Why is Licensing preferably to spinout?Spinout is more complicated than licensing• Spinouts require more Infrastructure that a license deal (people, money, buildings, manufacturing facilities etc…) they are thus more risky• It will take longer than licensing to realise a revenue stream back to the inventors and University.• But, the long term gains may be greater (and they can be fun and fulfilling!) Finansira Evropska unija
  127. 127. University spinout activity USA•~12% of USA university inventions are realisedthough the medium of technology transfer via a newspinout company.•These new companies have a disproportionalsuccess with over 70% of USA start-ups foundedsince 1980 still in operation•20% of spinouts from the Massachusetts Institute oftechnology (MIT) going on to experience InitialPublic offering (IPO) Finansira Evropska unija
  128. 128. Oxford University• Total external investment to date in spin- outs (post 1997): £336m• £36m Seed/Business Angels &• £300m Venture/Institution Capital stock exchange listing• Six AIM Listed companies combined market capitalisation (value) of £280m Finansira Evropska unija
  129. 129. USA/UK spinout: Equity DivisionWhen a spinout company is created then the stakeholders may hold equity shares in the new venture.Typically at creation:• 33% academic founders• 33% department• 33% the universityOr• 50% academic founders• 50% the university Finansira Evropska unija
  130. 130. IK/ USA Spinout Company Creation Institute Dr Zeleni Dr Crveni 30 shares 35 shares 35 shares 30% 35% 35% IP Spinout Company 100 sharesIs the IP Licensed free or with royalties to the spinout? Finansira Evropska unija
  131. 131. Round 1 Investment Investor Institute Dr Zeleni Dr Crveni100 shares 30 shares 35 shares 35 shares 50% 15% 17.5 % 17.5% Spinout Company 200 shares Share Dilution for founders Finansira Evropska unija
  132. 132. Option Pool Investor Institute Dr Zeleni Dr Crveni Option Pool100 shares 30 shares 35 shares 35 shares 22 shares 45% 13.5% 15.8 % 15.8% 9.9% Spinout Company 222 shares Finansira Evropska unija
  133. 133. Control and Value•Dilution reduces control •100% Full control •<50% Shared control•Value of shares should increase “its better to have a small piece of something than all of nothing Oxford Catalysts (December 2005) Market Capitalisation: £65M Finansira Evropska unija
  134. 134. Supporting and Nurturing a Spin-out• Strategy• Seed funding• Incubation• Raising Finance• Management Team• Business Support• Future challenges Finansira Evropska unija
  135. 135. Spin-out StrategyResearch Group New Managing Head tec hn Director int ol o er c gy ha ng e movesSenior Scientist Research Director University New Company Support Finance & Admin Sales & Marketing Scientists Production Scientists Finansira Evropska unija
  136. 136. Oxford University Challenge Seed Fund • Launched in 1999 – £4 million – Development projects, spin-out seed equity – University £1m, Treasury, Wellcome & Gatsby £3m – Deployed into a total of 68 projects • £4m investment has resulted in Equity stakes in 21 spin-outs, 4 completed licensing deals & 35 active technology projects • These 21 spin-outs have attracted £40m seed/venture investment Finansira Evropska unija
  137. 137. Incubation: Reducing Risk• Begbroke Science & Business Park• Owned & operated by Oxford University• University research labs• Business Incubator & premises for new companies• Central meeting room and café Finansira Evropska unija
  138. 138. Raising FinanceThe commercialisation of an invention can be lengthy and expensive. The venture will pass though a number of stages:• R&D• Patent• Prototype• First Product• Market Entry• Trade Sale/ IPO• Post IPO• All these stages will require finance.• There is a risk and a value associated with each part of this process. Finansira Evropska unija
  139. 139. Finansira Evropska unija
  140. 140. Funding – Bridging the “Equity Gap• Start-ups: – Bank – FFF (Friends, Family, “Fools”!)• Spinouts: – University Seed Funds – Private equity, (Business Angels, Specialists investors, VCs). – ROI (Return on Investment) • Bank Rate: 4% • Angel (Risk) Investment : 25% Finansira Evropska unija
  141. 141. Oxford Spinout in ContextOxford University• 1 patent per week, 8 new companies per year (average)• Own Seed Capital Fund and Business Angel Network• 3 Local Business Angel Networks• Very significant incubator and Science Park Investment• A lot of ‘re-cycling’ of spinout managers and academic entrepreneursOxford University• 3,700 researchers• 5,000 doctoral students• Most Powerful UK Research University – Research Fortnight Most Innovative UK University – Cross Atlantic Capital Competition Highest Research Spend in UK – £264 million (2004/2005) Finansira Evropska unija
  142. 142. Spinout: Essential Ingredients t en Ac nm ce iro ss nv to ge fin ri n an rtu ce Nu Supportive University Finansira Evropska unija
  143. 143. Spinout in Serbia• SBAN• Novi Sad University and Technology Incubator Model Finansira Evropska unija
  144. 144. Pitanja i komentari• schafernaker@secep.rs• lisa.cowey@icip-serbia.org• www.secep.rs• www.icip-serbia.org Finansira Evropska unija
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