Nick England – 3rdTech, Inc.

Working with UNC-CH Theory & Practice

3rdTech Overview Experience - Our First Companies

DeltaSphere, Inc. HiBall Tracker, Inc. NanoManipulator, Inc.

Tech Transfer - A Start-Up’s View

Intellectual Property – What do we want? Theory Practice

Technology Licensing – How do we get it? Theory Practice

Relationship – What do we do with it? Increasing Value Working Together

Intellectual Property - Theory

Patent encapsulates completed research - filed before disclosure - with broad coverage - covers exclusive solution to problem - covers “University Technology” (designs,

software, prototypes, expertise, know-how, etc.) - i.e., the patent trumps any disclosures

Intellectual Property – Practice

Techniques disclosed formally & informally Solves part of problem One of many ways to solve problem Enhancements, modifications, alternatives Ongoing work in progress - many contributors Nominal value in Patent, but IP does exist IP = Agglomeration (designs, software, prototypes,

expertise, folklore, , know-how, know-how-not, etc.)

Technology Licensing - Theory

Standard Patent License Exclusive in a particular field Milestones & Guaranteed min. royalties

Deep pockets Pay large license fee Sponsor research

Quickly Develop & Sell Products Send fat royalty checks to university

Technology Licensing - Practice

Negotiate New Form of License Covers Collection of “University Technology” Exclusive license to published techniques? Milestones & guarantees without patents?

Empty pockets License fee = equity Talk to Investors

Try to explain why non-exclusive - Give up and re-negotiate exclusive Try to explain why no patents - Give up and try to find something to patent

Start working and Pay UNC with good PR

Increasing the Value

Gather up the IP Software, hardware designs, algorithms, know-how Bits-and-pieces Working prototype – maybe

Make the most direct (i.e. cheapest) step to a product Look for VC and angels – clean out savings Market the product

Capitalize on built-up interest Capitalize on leading-edge capability

Look for VC and angels – mortgage house Manufacture and Sell Look for VC and angels – max out credit cards Pay UNC-CH with good PR (and some royalties)

Working Together

Innovation - Continuing exchange of technology Sharing continuing development – bug fixes, enhancements License back to UNC-CH for internal use Faculty/Staff on leave or summer at 3rdTech

Who owns IP invented while crossing Franklin street? Benefit the research Provide Cheap Products to UNC-CH

Protect the investment – researchers love to share Protect UNC-CH’s reputation - conflict-of-interest demon

3rdTech’s Model

Make things happen Identify Opportunities Work Together Provide the Missing Ingredients

Prove that the technology is valuable

Develop Products & Prototypes Recruit Customers and Partners

Spin Out Successful Companies

UNC-CH Environment

Assets Talented researchers

Leading groups in computer graphics, VR, Medical Imaging, Materials Science, others

Top-notch graduate students with fresh ideas

Federal research funding DARPA, NIH, NSF One goal of funding - to

disseminate technology

Challenges Lack of Start-up Culture

It’s not Palo Alto Limited Experience Lack of Internal Interaction

Institutional Limits Graduates often leave for start-

ups in CA, MA.

Mission – Act as a Catalyst

Create Companies Experienced management team Seed Funding Technology business evaluation License negotiation Incorporation Product development Market development Management recruitment Industry connections VC connections

Not an incubator – a Foundry – we manufacture companies

Act as a channel for commercialization – take first steps

Identifying inventors/technologies

What businesses are fundable Focus on products, not research

Develop ongoing relationship with the university

Licensing template Highlight mutual benefits

Structure – Jump-start Companies

First - Create new companies Equity – UNC-CH, Inventors, 3rdTech UNC license plus newly developed IP

Interim operations - 3rdTech Product development Market development Sales & Manufacturing

Interim Funding – 3rdTech plus sales Next Step – Spin Out

Recruit management Raise funding

Strategy – Convert Research to Products

Lots of work by (many different) smart people over many years

Works in the lab (maybe) But…..not meant to be a product

Impossible to duplicate Impossible for anyone else to use Untested in applications Undocumented

“How did this ever work?

DeltaSphere-3000 3D Scene Digitizer

University Research Project

Integrated hardware and advanced 3D software

DeltaSphere, Inc. - Products for Capturing Real World 3D Data

Models for films, video games, web sites

Crime and accident scene capture and reconstruction

Measurement for Construction, Ships, Aircraft, Renovation, Repair

Models for military training and simulation

DeltaSphere Inc.

Genesis – Lars Nyland UNC-CH Computer Science Current Product Status

1st Generation Hardware and Software Complete Interface developed for 3rd party software packages

Marketing Status Computer Graphics & Applications top 10 new hardware

product for 2000 Active reseller in Japan Excellent data sets/examples available 11 sales (US, Japan, Korea, Canada) Trade shows, magazines, demos

Vision for Future

Hardware/Software for every:

Oil rig, chemical plant, ship under construction

FBI office, Major crime lab Animation/Film studio Developer of

training/simulation content Video game developer

Lower price further (equivalent to a high performance digital camera), one for every

Web developer Building contractor Television studio Advertising agency Police car Industrial plant Surveyor’s office

HiBall 6DOF Motion Tracker

Measures position and orientation

Fast & Accurate Virtual Reality Augmented Reality Simulation and

Training Industrial Tracking Wide Area

Measurement

HiBall Tracker Inc. Genesis – UNC-CH CS team

10 years of R&D

Current Product Status Redesigned components

Installation Reliability Manufacturability

Redesigned software Reliability Maintainability Features Performance

Marketing Status Computer Graphics World – Top

10 Product for 2000 Trade Shows 21 Systems in US and Japan –

Boeing, NASA, GM Defense, Hughes, Universities

Vision for Future

Next Step Less Infrastructure Cheaper, Lighter, More

Sensors, Wireless Industrial Design Industrial & Military

Training Systems

Follow On Cheap Self-tracking – sensor

only Entertainment – LBE, Home Military Training &

Simulation Industrial Simulation &

Training Tracked Production Tools &

Equipment

NanoManipulator System Components

Atomic Force Microscope Force Feedback 3-D Graphics Interactive Software Automatic Lab Notebook

“It was really a remarkable feeling for a chemist to be running his hand

over atoms on a surface,” Stan Williams, UCLA Chemistry

NanoManipulator Inc.

“Picks and shovels for the Nanotechnology Industry”

Genesis – UNC-CH CS, Physics, Materials Science

7 Customers in US, Japan, Canada

Won R&D 100 Product Award Next steps

More microscope vendors

First applications NASA – wiring instruments

with carbon nanotubes Wake Forest – research in

drug discovery Marshall University –

development of molecular templates for circuit design

Vision for Future

Expansion Throughout the Lab

SEM, TEM, new instruments Integrated Lab Data

Management Integrated Visualization Tool

Explosion - Application Systems - From Lab to Production

Drug discovery pipelines Polymer characterization Nanomachine testing and QC Nanoprocess testing and QC Goal - KLA Instruments of

Nanotechnology

3rdTech Goals

New Companies & New Jobs in NC New Investment in NC New Businesses near UNC-CH A Culture of Entrepreneurship based on University-

developed technology Opportunities for Investors