TECHNOLOGY TRANSFER: INNOVATION TO ......Technology Transfer — Innovation to Commercialization...
Transcript of TECHNOLOGY TRANSFER: INNOVATION TO ......Technology Transfer — Innovation to Commercialization...
©2007 Foley & Lardner LLP
TECHNOLOGY TRANSFER:INNOVATION TO
COMMERCIALIZATION
The Summit on Intellectual PropertyFor Wireless Technology
San Diego, CAJune 21, 2007
Adrian R. CyhanSenior Counsel
©2007 Foley & Lardner LLP
Overview
Summary – Why engage in technology transactions?Panelist Introductions/Perspectives– Industry: commerce– Government Laboratories: national benefit– Universities: development and dissemination of
knowledge
Structuring Technology Transactions– The issues– What are the “wants” and “needs?”
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Any sufficiently advanced technology is indistinguishable from magic.
Arthur C. Clarke, "Profiles of The Future", 1961 (Clarke's third law)English physicist & science fiction author (1917 - )Author of novel: “2001: A Space Odyssey”
Tech. Transactions Provide Value
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Technology “Magic”1955 – Polio vaccine1961 – Humans travel to space1982 – Mobile phones: commercial cellular phone service authorized for the USA.1983 – Internet: ARPANET, and all networks attached to it, officially adopt the TCP/IP networking protocol.1990 – Hubble space telescope1990s ~ Today – Nanotechnology
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Technology “Life Cycle”
CONCEPTION
Theoretical ResearchInnovation
INCOME
Commercialization of ApplicationsLicensing
DEVELOPMENT
Applied Research geared toward practical application
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Who’s Involved in Technology Transactions?
Conception: Theoretical Research – the origins of technology development– Universities– Government research laboratories– Spin-out and start-up companies
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Who’s Involved in TT?
Development – applied R&D focused on products and commercial applications – Industry – Companies of all sizes…start-ups to
multinationals
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Who’s Involved in TT?
Generating Income– Industry
ManufactureDistributionMarketing and promotion
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Who Funds TT?
IndustryVenture Capital/Private EquityGovernment/Industry ProgramsGovernment
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Why is TT Important?
Intellectual property rights are an increasing portion of enterprise value– 80% on average– Patent filings are on the rise
“External” R&D/technology development is a growing trend– Value: industry looking to stretch budgets– The “not invented here” mentality is shifting
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Why is TT important?Economic development through investment– San Diego area: CONNECT– JVs, collaborations, sponsored research, related
licensing production and research facilities– VC/PE: funding of local start-ups/spin outs
Job creationDevelopment of products that improve quality of life and benefit societyIndustry, government and researchers work & expand relationships with potential employees/employers
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ViaSat & Tech TransferA quick look at the value and approach to
working with research organizations
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Corporate overview
20 Year growth & profitability1500 people
Headquarters in CarlsbadMajor Facilities Near Atlanta, Washington DC & Baltimore, MDUS Monolithics Subsidiary in Chandler, AZECC Subsidiary in Cleveland, OHICT Subsidiary in Boston, MAOther Offices in:
BostonRomeSpain
New DelhiBeijingCanberra
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Revenue Trends
$0
$100
$200
$300
$400
$500
$600
FY02 FY03 FY04 FY05 FY06 FY07
Defense Commercial ProjectedFY End Mar 31
$ milli
on
Q3
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ViaSat Involvement With Universities
ViaSat recruits at most of the top engineering schools
Small number of universities selected for investmentSome funding goes to general purposes
– Corporate affiliates, scholarships, student activitiesSeveral types of project and R&D engagements
– Research Consortium - e.g. UCSD Center for Wireless Communications (CWC)
– Direct project funding– Indirect project funding (e.g. senior design projects)– Project guidance & mentoring– Consulting agreements with faculty/researchers
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Focus for University Research
Primary goal should be “Basic Research”Advance the state of the art Provide opportunities for student involvement
– PhD & Masters Thesis, even undergrad research– Develop better candidates for both industry and academia
Publication and academic reputation
Secondary goal of IP developmentFor key (breakthrough) inventionsHelp drive competitiveness (regional, national, etc)Opportunities for licensing revenues
Non-goal: product developmentIncluding minor “design” patents
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Approach to Tech Transfer
Depends on nature of engagement
Consortia (e.g. UCSD CWC)Keep it simple: pre-negotiated for most purposesSee the CWC Royalty-Free non-exclusive licenseSave special cases for special activity
Funded (or partially funded) research projectsPre-negotiate (usually) shared rights/licensing
Funded & directed student projectsNot likely to generate significant IP, but owned by company
University IP generated without corporate fundingWe have no experience with this yet – you tell me
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ViaSat’s Tech Transfer “Hot Buttons”
Protection of our background IP
Ability to get "right to operate" for any research that we fund (even partially)
In a simple pre-negotiated manner
Universities focused on significant research Versus high volume of tiny "implementation" patents
Paying a fair and reasonable value for IP licenses
Ability to interact with institution without excessive bureaucracy
Technology Ventures CorporationTechnology Ventures CorporationGeorge Friberg, Senior Director
Albuquerque, New Mexicowww.techventures.org
Intellectual Property for Wireless TechnologyIntellectual Property for Wireless TechnologySan Diego, CASan Diego, CA
June 20 June 20 --21, 200721, 2007
TVC Overview• Founded 1993 by Lockheed Martin Corporation
• Part of management contract for Sandia National Laboratories
• Non-profit, 501(c)(3) charitable foundation
• Commercialize technologies from national laboratories & regional research universities
• Focus: start-up technology companies seeking equity capital
• Goals: job creation, funding, business formations
©
NNSA Cooperative Agreement
• NNSA Cooperative Agreement, Sept. 2002
• $3.5M FY06 Congressional appropriation
• Expansion to support LLNL, LANL, & the NTS
• Collaborative effort among TVC, Labs, & NNSA
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Value Proposition
• Innovators: high impact business case formulation
• Investors: identification of high-value investments
• Create a dynamic business infrastructure attractive to innovators and investors
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IdeaBusiness Plan
PrototypeBeta
SalesProfitability
Decreasing RiskDecreasing Risk
$ 100K
$ 1M
$ 10M
Dec
reas
ing
Ret
urn
Dec
reas
ing
Ret
urn
Venture CapitalBanks
AngelsFFF
Gov’t
IPOStrategicPartners
Courtesy of Tom Stephenson/Verge©6
TVC Innovation ModelAttracting
TechnologiesPortfolio
DevelopmentPortfolio
CommercializationPortfolioFunding
Technology Sourcing
Technology Screening
Portfolio Acceptance
Proposal Approval
Business Plan
Equity Capital and
Other Funding
DOE/NNSA National
Laboratories
Research Universities
Other R&D Institutions
Private Sector
Rework or Maturation
Assessment Process
Market Research
Business Case
Investment Needs
Technology Readiness
Assistance Process
Entrepreneur Training
Forecast Financials
Presentation Plan
Start-Up Companies
Rapid Acceleration
High QualityPrivate SectorJob Creation
$200 to $500 millionSilk purse - sow’s ear
Champion (LMCO)
9,081 jobs
Deal Flow (Labs & universities)
Funding (state)
VC
89 start-ups
$731 million(61% equity: VC 57%, Corp. 29%, angel 14%)
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Federal Laboratory Technology Transfer or Commercialization
Research Development
Boundary of the Lab
NEW MARKET
NEW MARKET
Projects CURRENT MARKET
CURRENT MARKET
Adapted from: Chesbrough, Open Innovation
ESTT
CRADAWFO/NFE
IP LICENSE
Technology Commercialization
Technology Transfer
Existing or prospective industrial partner having problem
LLNL IPAC Process in making referrals to TVC
inquiry from LLNL inventor or principal
investigator
Needs help with business
plan or issue or funding?
Coordination with home directorate, legal, and LLNL
Conflict of Interest
Coordinator for review and approval
Reason for inquiry?
personal
Program development
Yes OK to refer
Refer to TVC to provide entrepreneurial support, coaching, and introduce company or individuals to potential
investors.
Entrepreneurial Inquiry
TVC
New Ventures
(NV)
SNL Line
IP List
Personal Conflict of Interest
CPR 001.2.3
Technology Commercialization
CPR 200.3.2
COI FormSF 4890-A
COI Mitigation Plan
Non-disclosure Agreement (NDA)
Separation
ESTT Request Memo
Outside Employment
FormSF 4890-OE
Business Plan Summary
SNL Licensing
Kick-off Meeting
ESTT Request Memo
License Negotiations
New Ventures
SNL Legal NV SNL
LineESTT
ESTTCPR 200.3.5
Acknowledgment of IP Obligations
SNL Legal
ESTT Packet Review
CPR 200.3.5
no
yes
Request to License
*Some cases exist where this has occurred--no new licenses will be issued to employees staying on role without Deputy Director approval.
CPR 200.3.2*
Stay at SNL
yes
no Letter of Intent
ENTREPRENEURIAL INQUIRY SNL
IP for Wireless Technology Conference Post-Conference WorkshopTechnology Transfer — Innovation to Commercialization
June 21, 2007
William J. Decker, PhDAssistant Director –Physical Science LicensingUCSD Technology Transfer &Intellectual Property Services
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
University-Industry Technology Transfer = A Natural Partnership
“The value of an idea lies in the using of it.” . . . Thomas Edison
Universities - generators of novel ideas Industry - developers of products and profits with the ideas
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Significance of UniversitySignificance of University’’s s Contributions to IndustryContributions to Industry
“The Small Business Administration . . . compared the rates of return on R&D dollars in small and large companies that have a relationship with a university . . . companies with a university affiliation, regardless of size, had a rate of return almost twice that of companies with no University affiliation . . .”
INC, MagazineApril 1993
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
UCSD Research
~ 1600 faculty members (~1300 FTE); 20,000 undergraduate students + 5,000 graduate students
~ $733 million in extramural funding in FY2006 (71% Federal; 19% private; 3% state/local; 7% Industry)
~ 60% life sciences~ 30% physical
sciences/engineering
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
UCSD - Stats Reflect Goals
Over 300 innovation disclosures in each of FY03, FY04 & FY05 - a portfolio of >1400 innovations available
UCSD credited with formation of >100 startups using licensed UCSD innovations
FY2005 licensing revenue >US$21 million
Over 360 active licenses (7/2006)
~86% US businesses~50% CA~35% San Diego
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
TechTIPS MissionFacilitate the transfer of UCSD innovationsfor the public benefit
Enhance the research experience of UCSDresearchers through technology transfer
Promote and target regional economic developmentby leveraging UCSD innovations
Provide financial incentives to researchers tostimulate technological innovations
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
It Takes More Than Research . . .Turning research discoveries into new ideasCrystallizing ideas into inventions and technologiesRecognizing commercial utilities of inventionsProtection of intellectual property rights for commercial
developmentMatching up with proper partners (licensing, services)Incubation and nurturing. . . for Technologies to Mature into an Industry
Research + Technology Transfer + Commercialization Support = San Diego High-Tech & Biotech Industry
University-Industry PartnershipSan Diego - Technology’s Perfect Climate
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Select UCSD Licensees
Accelrys Inc.Applied BiosystemsApplied Micro Circuits CorporationCisco SystemsEli LillyGenentechGeneral ElectricHughesInvitrogenMonsanto Company
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Bill Decker
Ph.D. from UVA in Engineering Physics, with a dissertation entitled "Numerical Studies of Bifurcations and Chaos in Natural Convection".
Five years at a small biomedical device with 6 issued US patents, 4 issued non-US patents, and other patents pending in the US, Europe, Japan, and Hong-Kong
With UCSD TechTIPS for almost 6 years. Helped negotiate agreements with Fortune 10 companies, licensed numerous start-ups.
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
UCSD’s Center for Wireless Communications Revised Patent Process
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
New Process•New process complete in 90 days vs. 2 years
•All licensing terms known up-front, no hidden fees, no surprises, no negotiation
•Easy low-cost buy decision, ensuring IP access while you wait for the market
•If IP not relevant, cancel anytime
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Main Elementso Non-exclusive royalty-free license o Share of patent costso One-time $10K fee at patent issuance (approx 3 years)o One-time $10K fee upon first commercial use (approx
2 to 7 years out)o Life of patent rightso No reports, no audits, all information known up-fronto Cancel anytime if IP not relevanto For the same cost, receive a license vs. an option to
license
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Comparison
YesNoYesJoint IP ownership
KnownUnknownUnknownTerms at time of work start
NoYesYesRoyalty
NoYesYes Issue fees/ stock
YesYesYesPatent Costs
CWC Agreement (proposed)
CWC Agreement (current)
Standard UC Sponsored Research
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Specifics of University-Industry Interaction – 1 of 2
Direct funding of research costs through contracts and grants. Gifts and endowments (including endowed chairs) designated for colleges, schools, departments, or individuals. University-industry exchange programs and student internships. Specialized programs designed by the University for continuing education and training of professionals, primarily through University Extension.
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Specifics of University-Industry Interaction – 2 of 2
Participation of industry representatives on campus and systemwide advisory groups. Cooperative research projects, some of which include government participation, and the use of specialized facilities.Use of unique University facilities on a fee-for-service basis. Licensing University Intellectual Property
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Important Issues for Most Universities
Maintaining the integrity of the university research and education missions
Responding to new funding initiatives and growing expectation of the university’s role in technology-driven economy
The balance is different for different universities (even campuses)
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Eight Important Concerns for Dispensing with Rights to Future Research - #1
1. Open Dissemination of Research Results and InformationAgreements with external parties shall not abridge the ability
of University researchers to disseminate their research methods and results in a timely manner. The most fundamental tenet of the University is the freedom to interpret and publish or otherwise disseminate research results in order to support the transfer of knowledge to others and maintain an open academic environment that fosters intellectual creativity.
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Eight Important Concerns for Dispensing with Rights to Future Research - #2
2. Commitment to StudentsAgreements for research relationships with external parties
shall respect the University's primary commitment to the education of its students.
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Eight Important Concerns for Dispensing with Rights to Future Research - #3
3. Accessibility for Research PurposesAgreements with external parties shall ensure the ability of
University researchers to utilize the results of their research to perform future research.
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Eight Important Concerns for Dispensing with Rights to Future Research - #4
4. Public BenefitAgreements with external parties shall support the ability of
the University to make available for the public benefit in a diligent and timely manner any resulting innovations and works of authorship.
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Eight Important Concerns for Dispensing with Rights to Future Research - #5
5. Informed ParticipationAll individuals involved in research governed by a
University agreement with an external party shall have the right and responsibility to understand the rights and obligations related to future research results embodied within the agreement.
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Eight Important Concerns for Dispensing with Rights to Future Research - #6
6. Legal Integrity and ConsistencyCommitments concerning future research results made in
agreements with external parties shall be consistent with all applicable laws and regulations and the University's contractual obligations to others.
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Eight Important Concerns for Dispensing with Rights to Future Research - #7
7. Fair Consideration for University Research ResultsAgreements with external parties shall provide fair
consideration to the University and the general public for granting commercial access to future University research results.
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
Eight Important Concerns for Dispensing with Rights to Future Research - #8
8. Objective Decision-MakingWhen establishing or conducting University relationships
with external parties, decisions made about rights to future research results shall be based upon legitimate institutional academic and business considerations and not upon matters related to the personal financial gain of any individual.
UCSD TechTIPSUCSD TechTIPS ……pipeline to innovationpipeline to innovation
TechTIPS
http://invent.ucsd.edu
858-534-5815858-534-7345 (FAX)
©2007 Foley & Lardner LLP
Technology Transaction Types
Licensing: leveraging technology for income/profit or other benefitCollaborative/Sponsored research– Commercial, B2B– Commercial/Academic/Government
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The Common Thread: Documenting Technology Transactions is Key
Agreements – defining the relationship and managing risk – Reduce uncertainty– Account for the parties’ contributions– Specify rights in technology
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Structuring Technology Transactions
Strategic considerations– Finding the right partner– What do the parties want out of the transaction?– “Transfer of rights” vs. licensing– Financial/other contributions– Negotiation: getting to “yes”
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What do we want/need?
- Avoid setting royalties in collaborative agreements; negotiate later- Inventors required to share in royalties
- % age of license royalties flow to Gov’t. (incl. minimums, annuities)- Inventors share in royalties
-Fair and reasonable value-Exclusive/nonexcl.
Royalties
-Negotiate use rights later in collaborations-Short exclusive option periods, less than one year after patent filing
- Reservation: Gov’t Purpose Rts.-Only patented or protected IP can be licensed- Rts. can flow to inventor if lab declines to protect
- Full, pre-negotiated rights to use funded IP- Exclusive option periods that allow for valuation
Rights in “New”Technology
UNIVERSITYGOV’T LABINDUSTRYWant/Need
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What do we want/need?
-Administratively difficult to track
- “Outbound” BIP rights vary, and may be tailored for specific cases.
-Protection of own BIP- Avoiding “blockage:”Identification of other BIP and rights to use
Background IP
UNIVERSITYGOV’T LABINDUSTRYWant/Need
- Non-discrimination in research
“Everything” is controlled
Compliance –avoidance of strict sanctions
Export Controls
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What do we want/need?
- University laboratory environment makes confidentiality difficult.
- Strict identification policies- Explicit designation
Variable; sensitive business information may warrant strict protection
Confidentiality
-Research: university may take responsibility for its own acts.- Licensing: indemnification by licensee required
-Full indemnification by licensee required-Warranty – “AS IS”-“Fairness of Opportunity”
-Expect to take responsibility for own actions-Don’t expect responsibility from univ. or gov’t partner for company’s acts
Warranties & Indemnities
UNIVERSITYGOV’T LABINDUSTRYWant/Need
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Structuring Technology Transactions
Agreements – “Hot button” issues– Export controls – transferring information
internationally– Finding the “right” partner
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Improving the Situation
Understanding where your partner is coming fromUtilizing “master” or “template” agreements– GUIRR Project
“Long-term” perspective: building partnerships based on relationships/trustBalancing royalties and “fields of use.”– Appropriate allocation of rights utilization
Sharing in risk/uncertainty
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Panelist Contact Info.
Steve Hart: [email protected] Friberg: [email protected] Decker: [email protected] Cyhan: [email protected]