The Road to Successful Commercialization
By Margaret Miller
Protect, Publish and Prosper
The protection of intellectual property for commercially viable discoveries that arise from the research activities of faculty members in academic institutions is the first order of business in the commercialization process. It is important to recognize that, after the patenting process commences, the research can be published. Academics can therefore, protect their work for its commercial potential as well as receive credit for publication. In fact, patents are gaining recognition as valuable academic achievements. This can lead to both academic and commercial prosperity for researchers.
There are several routes to successful commercialization of an invention. Seabright Corporation, as the University's technology transfer agency, has been instrumental in negotiating a variety of commercial successes from option agreements to licenses to setting up spin-off companies.
When seeking partners for projects, confidentiality is the first issue addressed. Before disclosing information to a third party, Seabright completes a confidentiality agreement with the company on behalf of the researcher. This allows for the transfer and discussion of confidential research results even before patenting begins, as well as throughout the various stages of the patenting process. Several companies may review a project in order to assess the commercial potential of the technology and determine if they are interested.
If a company is interested in commercialization of the invention, Seabright may negotiate an option agreement. This gives the company the option to license the technology within a set time frame. This type of arrangement may occur when the company is willing to collaborate with the researcher to provide proof of concept which transforms the research into technology. Some examples include feeding trials on fish or toxicity testing of a potential therapeutic drug compound. The company would support this by funding the work to be carried out in the researcher's lab or by an in-kind contribution to carry out part of the work in their own facilities. If the project is successful, it may lead to a licensing arrangement.
At this point both parties negotiate the terms of commercialization. The technology is transferred to the commercial enterprise under a license agreement and the researcher may act as the scientific advisor on the project. The researcher may also continue to carry out basic research in their lab but with an allocation of funds from the company. In a license agreement, milestones are established under which the company commits to successfully commercialize the technology. The license could include up-front fees, sublicense fees, and most importantly royalty payments which are a percentage of the revenue from sales of the final product. The beneficiaries of the royalty stream include both the researcher and the university. University royalty income would be used to further research activity at the university.
Seabright has been involved in the establishment of a number of spin-off companies over the past decade. There are certain critical elements that are necessary for the establishment of a successful spin-off. Of prime consideration is that the technology be a 'platform' or core technology. This means that it is the basis of more than one product or can be applied in a number of different industry sectors. Also, essential is the interest, desire and commitment of the researcher to start a company. Another critical issue is the amount of money required to bring the technology to market. Some developments require the resources of a large multinational company, while for others adequate venture capital funds may be raised to start a spin off company. Even for a large scale development, a spin-off may be viable through a strategic alliance or joint venture with a multinational corporation.
In future articles further information will be given on examples of
successful commercialization at Memorial. If you have questions,
comments or suggestions, please contact Margaret Miller, Seabright Corporation
Ltd., Tel. 737-2682, Fax. 737-4029 or by Email: firstname.lastname@example.org