Failures And Success In Commercializing

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Failures And Success In Commercializing

  1. 1. Failures and Success in Commercializing Student Inventions <ul><li>Dr. Paul A. Nelson </li></ul><ul><li>Associate Professor of Economics </li></ul><ul><li>Dr. Edward Lumsdaine </li></ul><ul><li>Professor of Mechanical Engineering </li></ul><ul><li>Michigan Technological University </li></ul><ul><li>Houghton, Michigan 49931 </li></ul>
  2. 3. Michigan Tech Facts <ul><li>Land Grant School…1862 – 1885…Mining </li></ul><ul><li>437 faculty </li></ul><ul><li>7,014 students…55 % Engineering </li></ul><ul><li>Sciences, Technology, Business, Forestry </li></ul><ul><li>Among largest programs in ME, EnvE, MY </li></ul><ul><li>14 % M.S. and Ph.D. students </li></ul><ul><li>$50 million in externally funded research </li></ul>
  3. 4. <ul><li>Common Problems Encountered </li></ul><ul><li>Semesters and Academic Years End </li></ul><ul><li>Student Interest Falls after Grade Is Received </li></ul><ul><li>Students Need Employment During Summers </li></ul><ul><li>Cost of Intellectual Property Protection </li></ul><ul><li>Differing Objectives of Team Members </li></ul><ul><li>Invent Before a Market Is Assessed </li></ul>
  4. 6. Michigan Tech Enterprise Program <ul><li>Operate as Businesses </li></ul><ul><li>Continue from Year to Year </li></ul><ul><li>Industry Sponsored Projects </li></ul><ul><li>Engineering Design Credit </li></ul><ul><li>All Majors; All Years </li></ul><ul><li>New Members Mentored by Older Ones </li></ul><ul><li>Salary Possible </li></ul>
  5. 8. Incubator Services for Students <ul><li>Access to Marketing Advice </li></ul><ul><li>Access to Patent Advice (Brooks Kushman P.C.) </li></ul><ul><li>Access to Space for Student Teams to Work on Products </li></ul><ul><li>Low Rent for For-Profit Student Ventures </li></ul><ul><li>Access to Financing </li></ul><ul><li>Access to Office and Communication Equipment </li></ul>
  6. 9. Undergraduate Student Patent, Research, and Proprietary Rights Agreement <ul><li>The student agrees to let the University decide whether it should incur expense in further developing the technology. If the University decides not to incur further expense, it returns the ownership to the student. If it decides to incur further expense, then it will share royalties or other income as follows: </li></ul><ul><li>a. initial $1,000 to me. </li></ul><ul><li>b. income from $1,000 to $30,000 divided 15% to me and 85% to the University. </li></ul><ul><li>c. income from $30,000 to $180,000 divided equally among the University, my department and myself, </li></ul><ul><li>d. income in excess of $180,000 divided 1/3 to me and 2/3 to the University </li></ul>
  7. 14. Sequence of Events <ul><li>Filed a Provisional Patent Application, Nov. 2004 </li></ul><ul><li>Prepared Manufacturing Plan with Assembly Flowchart, Drawings, and Cost Estimates, Spring 2004 </li></ul><ul><li>Approached Trek, Inc. with Proposal, June 2005 </li></ul><ul><li>Trek, Inc. Very Helpful with Advice, but No Interest </li></ul><ul><li>Enterprise Lost Interest in Device…Moved on </li></ul>
  8. 15. Philip Robinson and the Zorin Pump
  9. 18. SmartTrac Approach <ul><li>Real Limited Liability Companies are Formed </li></ul><ul><li>Students are Corporate Officers and Owners </li></ul><ul><li>Students are Paid Salaries </li></ul><ul><li>SmartZone Facilities are Used </li></ul>

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