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UMIP - Reputation and value through intellectual property®

The assessment of commercial viability

UMIP®

The University of Manchester Intellectual Property Ltd

UMIP®


Overview

•The process we use

•Assessment criteria

•Trends at Manchester

•Benefits for researchers

•Case studies

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A judgemental process

•Its not an exact science

•Seek quantitative and qualitative data

•Relies on experience UMIP people all have technology background

Many industry background

•The process asks key questions

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Activities

Phase One

Meet Academic(s)

Information Gathering on:

- Technology or Idea

- Possible Applications

- Stage of Development

- Industry Links

- IP Position

- Research Funding

- Academic Background

- Publications

Phase Two

Search for Prior Art

Assess Strength of IP

[Arrange Independent Technical Assessment]

Identify Products or Services

Identify Customer(s)

Validate Market Applications

Conduct Market Analysis

Define Benefit/Added Value

Research Competitors

Test Academic Commitment

Phase Three

Review

Outcomes:

EITHER: Reject, then

Inform Academic(s)

Signpost Elsewhere

OR: Accept, then

Allocate resource

Phase Four

Protect IP

Define Commercial Plan

Seek Funding (if required)

Confirm IP Assignment

Formalise Arrangements with Academic(s)

Determine Milestones

Timing: Start Screening Decision If ‘Yes’ Shaping

(0 to 4 weeks) (+ 4 to 8 weeks) (within 12 weeks) ( + 1 to 3 months from decision)

Commercialisation ExecutiveBusiness Manager

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Stages of assessment

Invention disclosure meeting

Market

People

Technology

Overall market size

IPOwnership

Unique selling proposition

Route tomarket

Technology confidence

Liabilityissues

Barriers to competition

People

Marketinertia

Nature of competitors

Financialreturn

Dependence on 3rd party IP

Market dynamics

Further deeper

assessment

Initial assessment

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General rule

•It generally takes much more effort to commercialise a technology that only has a modest set of ingredients than it does for one that has a strong set of ingredients

Risks higher

Fund raising more difficult

Time to market longer

Returns smaller

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The balance

Potential “World” value

Perceivedrisk

Likely effort/timescale

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Value and Risk: the balance

Potential value

Cost Perceived Risk

HIGH

HIGH

HIGH

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Some bad calls

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‘We don’t like their sound - groups of guitars are on their

way out.’

Decca Records rejecting The Beatles, 1962

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‘I think there is a world market for maybe five computers.’

Often attributed to Thomas Watson Sr,

in 1943 (later Head of IBM),

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‘Who the hell wants to hear actors talk?’

Harry Warner, Warner Bros, 1927

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Other noteworthy mistakes

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One from Microsoft…

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This might be one…

Palm Centro - a $99 entry-

level smartphone

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1 Overall market size

•Spin-outs - big markets excite investors If the overall market is £1Bn then even a niche part of it

could have significant commercial potential

•Licensing – potentially higher royalty rates to be negotiated

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1 Overall market size

•Information gathering What is the full range of applications that the

technology could be used for?

Market reports

Data on existing companies e.g. turnover

Market validation

Contact end users, distributors, industry insiders

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2 Unique selling proposition (USP)

•What are the features of the technology that would make it the technology of choice

Function

Cost

Quality

•How novel/attractive would it appear to a user/customer?

•Is there a clear unmet need?

•Information gathering A thorough knowledge of the existing and emerging

technologies

Dialogue with end users/distributors/industry insiders

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Unique selling propositions

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3 Route to market viability

•Is there a credible route to market? Existing distributor chains/outlets?

If no, does setting up an appropriate route to market seem

Sensible/affordable

•Information gathering Typical margins and overheads in existing distribution

systems

Identify key players – assess what would motivate them to work with us

make contact if appropriate

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What would be the route to market?

•A low cost cancer imaging technology that has great value ……but all the existing players want to keep it out of the market

•A technology that enables electronic components and control switches to be woven into fabrics

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4 Confidence in the technology

•Do we have clear proof of concept? Function

Scale up potential

•Clear understanding of the technical risks/downsides/limitations

•Information gathering Potential external technical critique, testing or

evaluation

A good understanding of the investment required to bring to the technology production.

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4 Confidence in technology•How easily will the technology scale up

•Reproducibility? – works every time in volume

•Cost of manufacture in volume environment

•Ability to manufacture with a commercially acceptable level of skill

•How confident are we that it can deliver the performance desired by the market

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5 Potential return on investment

•What is the ratio of gain to effort? Is it favourable?

•If so, is this likely to be achieved within an acceptable timescale (e.g. 5-7 years?)

Time Effort

Money

Society benefit

£ returnEnvironmental benefit

Economic benefit

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5 Potential return on investment

•Information gathering Potential business value

Other potential benefits – quantitative/qualitative

Resources/effort required to commercialise

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6 People

•Commercialisation can be very time consuming and is not for everyone

•Key attributes of successful entrepreneurship

Open minded

Flexible style

Focussed

Tenacity

Teamwork

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7 Barriers to competition

•Does a strong intellectual property position exist currently? Patents Know how Software

•If “no”, is there a good likelihood that strong IP will be developed from the work ahead?

•If “no” to both of the above Are there any other measures that could be taken to help the

technology/product stay ahead of the competition Customer benefits Cost

• Information gathering Prior art searches of existing and potential future IP Identify Specific skills and expertise that are not replicated elsewhere Technology road map Can it be kept secret?

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8 Market inertia

•Is there either significant… Customer entrenchment in this market sector?

Significant new infrastructure investment/required to get the technology/product to market

•Has this sector already invested heavily in current technology, and will therefore be unlikely to orphan that investment?

•Are there obvious opinion leaders or early adopters that could help overcome these barriers?

•Information gathering Canvassing of existing customers/distributors etc

Technology roadmap of industry

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8 Market inertia

The widescreen format took 10 years to take overChanging money format has significant barriers both practically and in terms of user habits and attitudes

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9 Nature of competitors

•Do we fully understand the strengths/weaknesses of the competitor technologies?

•Are we confident that we could take a significant market share?

•Would competitors be able to take measures to undermine our project? E.g.

Undercut on price Offer additional feature/benefit

•Information gathering Competitor analysis Contacting existing customers/distributors Specialist opinions/consultants

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9 Nature of competitors

vs

vs

An ambitious competitor may end up winning, even if their product is inferior

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10 Market dynamics

•Do the dynamics for this market match the timing of the product/technology?

A new mobile phone technology may be very risky if it has a 5 year development plan

•What are the market trends/pace/volatilities?

•Information gathering Project timing plan

Legal or regulatory requirements/constraints

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11 Dependence on 3rd party IP

•Is ownership of the technology clear People who have been involved

3rd parties organisations who have been involved

“Freedom to operate”

•Information gathering Thorough questioning

Prior art searches

Search for umbrella patents

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12 People skills

•Are we sure that the skills available to deliver the technology to market are available?

Management team?

Industry/sector experience?

Technical sales?

Technical/support skills?

Admin/accounting/finance?

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13 Liability issues

•Product liability

•Reputation

•Ethical

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14 Scale of project

•Is the scale of the project within our experience i.e. a £500M project is too big!

If so, the project is almost certainly limited to the licensing route

•Investment criteria comfort zone

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15 Other risks?

•Health of key individuals?

•Possible legislation changes?

•Dependence on failure of a competitor technology?

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Experience at Manchester – EPS data

200 invention disclosures in 2 years

170 - not currently commercially viable30 active projects

110 – no intellectual property

or no market

50 – too early stage10 – people commitment issues

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Benefits of commercial activity

•Harnesses the commercial world in getting your work out there!

•Reputation Organisation

Personal

•Additional income Department

Personal

•The experience!

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Case studies

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Case study 1 Biomedica: antimicrobial peptides

Strengths

•Broad range of applications in “world scale” markets

•Market applications of high potential value low risk with near term low barrier

•Longer term, high barrier, high risk applications

•Good proof of concept

•Patent protected

Weaknesses Collaboration with US University complicated ownership – assignment

obtained Technology needed UMIP Proof of Principal investment to gain licensee

traction

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Case study 2EPS example – toxic contaminant removal

Strengths

•Worldwide market

•Significant running cost advantages compared to existing technologies

•Higher performance/more effective than existing technologies

•Good proof of concept

•Very broad range of applications

•Simple technology

•Patent protected

Weaknesses Water industry generally very conservative on new technology High investment cost for customers

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For further advice or if you have any questions please get in touch with your

relevant UMIP Commercialisation Executive

www.umip.com