Or, if you show me yours, I’ll show you mine!
When an academic produces research and develops a proposition, there comes a time when the commercialisation of that work needs to be considered. At this point, the academic may seek support from their university Technology Transfer or Licensing Office (TTO/TLO – if there is one), the university innovation team or some other group or individual within the university.
At this point there is a consideration as to the viability of the R&D in terms of its impact on society, industry, commerce and the wider world and an attempt to identify the potential opportunity this R&D provides. This is where the first potential problem arises, how do we validate the R&D?
A search of the Intellectual Property Office or a Patent Search will often be inconclusive or vague given the early stage of the R&D, but this early search could help the academic consider the direction their research should go and this is an important step for the TTO/TLO, academic and university.
The initial consideration as to the IP position is a critical role that the TTO/TLO carries out and is invaluable in terms of the future validation and viability of the R&D as a commercial opportunity. Therefore it is a priority for the TTO/TLO to search the IP position and understand if and how the IP can be protected, possibly through a patent application, as soon as possible.
However, it is important to note that the value of the R&D/IP is still unquantified and intangible and will remain so until further, external work is carried out.
Therefore the academic, TTO/TLO and university need to ask themselves some key questions, they are:
- Is there a market need for this R&D?
- If there is a market need, is it being addressed and how does this affect our IP?
- Does our R&D require specific complimentary assets from partners?
- Are there complimentary partners available to us?
- Are there competitors with better positions in the market?
The last three bullets above allow the academic, TTO/TLO and university to make suggestions as to the commercial direction of the R&D/IP. For example:
- If the R&D requires specific complimentary assets from a partner then there is an opportunity to negotiate a licence agreement.
- If there are complimentary partners available, then the opportunity may be a Joint Venture agreement.
- If there are competitors with better positions in the market, then there may well be the opportunity for a strategic alliance.
However, all of these options relating to partnerships, licensing, joint ventures and alliances have the need for significant planning, negotiating and will be extremely time-consuming for the academic, TTO/TLO and university.
In addition the royalties will not be extensive and on average provide between 0.5% and 5% of revenues over a set period.
As such the entire process can be time-consuming, expensive and only financial rewarding IF the revenues are achieved AND the royalties received.
By comparison, a spin-out of a protégé company from the university is a possibility if either a) the answer to the last three bulleted questions above is always ‘No’ or b) the academic, TTO/TLO and university wish to deliver greater overall impact.
Impact can not be based on the intangible value of the potential for IP under a licensing agreement, but can be quantified on outcomes. IP can not be valued or quantified as adding value until it is being realised.
The consideration of impact in terms of future contracts for research, regional economic development, jobs etc is significant and auditable when a spin-out is created. The equity position of the academic and university has significant upside value if dividends are paid and there is an exit at some point in the future.
The problem is however, that to get to any point where a decision can be made as to the commercial direction and/or opportunity the R&D/IP can generate, is time consuming, costly and often very disjointed. This is why we developed the PIPEworks pathway, from ‘Lab to IPO’ and to support the academic R&D/IP commercialisation process.
PIPE values the work the academic does, supported by the TTO/TLO or university and works in partnership to identify, validate, commercialise and fund R&D/IP projects.
Our focus is on working with the academic team to make a difference and through our systems and processes, to work on multiple projects , across various topics, universities and geographies to add value to the R&D/IP commercialisation process.
For more information, get in touch.
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