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Unless an innovation has prior contractual obligations to
a third party (such as the sponsor of a research agreement
or the provider of a material transfer agreement etc.), the
first step we take is to broadly announce the availability
of the innovation thereby providing equal opportunity access
to all businesses. This is done by the use of a non-confidential
disclosure (NCD) that sufficiently describes what the innovation
may do without providing any proprietary know-how to "enable"
the innovation. The NCD is normally a collaborative work by
the licensing officer and the lead researcher of the innovation
and will be used to aggressively market to potential industrial
partners who may develop it into useful products. We generally
use two marketing approaches, the "mass marketing"
approach and the "targeted marketing" approach,
each of which complements the other. To reach technology seekers
broadly, we post the NCD in our searchable Web site under
the section "Technologies
Available for Licensing" so that companies from all
over the world can easily browse and search using the Internet.
Selected innovations listed on our Web site are also cross-listed
in the UC system-wide office Web site as well as several subject-specialized
or general technology Internet portal services such as TechEx,
University Inventions,
Patent Café, UVentures,
and Pharmalicensing
etc. These cross-listings further help us to reach more potential
licensees globally. We also use on-line databases, reference
libraries, and SIC for industries to search for selected companies
(normally about 20 to 40) that may be interested in the innovation
and mail them the NCD. The above activities cast a broad net
and constitute our routine "mass marketing" efforts.
At the more "targeted" level, we rely on referrals
by our own researchers as well as our own experience and contacts
in the relevant industry to directly approach individuals
in selected companies. Referrals by our researchers are very
valuable sources because they are leaders in their field of
research and certainly know very well the practical and often
commercial "relevance" of their work to society.
All our licensing officers attend industry conferences routinely
and they also have previous professional experience in the
high technology industry. The combined efforts of the researchers
and our licensing officers will normally generate a list of
targeted candidates from which we can solicit interest in
developing the innovation into a useful product for the public.
Once a company contacts us to express an interest in an innovation,
we get busier. First of all, we will enter into a Confidential
Disclosure Agreement (CDA) with the company so that we
can freely discuss the technical details of the innovation
and the company's proprietary commercial interest and business
intention.
After a CDA is completed, relevant information will be exchanged
between Technology Transfer and Intellectual Property Services (TechTIPS) and the company. To the extent not prohibited
by conflict of interest regulations, we like to involve the
researchers by using their assistance in the exchange of information
with the company and to evaluate the company's ability to
develop the innovation in a meaningful manner. It is our experience
that the more willing the researchers are to assist TechTips,
the higher is the likelihood a license agreement can be reached
with the interested company. This "courting" stage
may take several months depending on the company. Our experience
is that the bigger the company, the longer it may take due
to the layers of review and approval it requires internally.
Once a company has a chance to learn about the details of
the innovation, it will decide whether it has a genuine interest
in obtaining the legal right to commercially develop the innovation
or to simply wish us better luck with another company. If
it is the former, we will negotiate with the company to finalize
a contract. If it is the latter, we will continue to market
the innovation to the public.
When a company desires to obtain the right to commercialize
an innovation, there are three contract instruments we routinely
use. The company and TechTips may enter into a Letter
of Intent or an Option Agreement so that certain
rights to license the innovation are reserved for the company
for a limited period of time. This allows the company time
to further evaluate the innovation or to raise funding (often
required by start-up companies) for the purpose of developing
the innovation. The company may pay a small fee in addition to
the costs for the statutory protection of the innovation (e.g.
costs for filing and prosecution of a patent application or
registering a copyright etc.). The company may desire to enter
into a License Agreement with TechTips directly. The license
will grant the company certain legal rights to commercialize
the innovation. The rights may be "exclusive" or
"non-exclusive" in nature, for selected (e.g. only
for "diagnostic use" but not for "therapeutic
use") or all "fields of use", and/or for certain
or all "territory" (e.g. for "Europe"
only). The company normally has to pay the university certain
fees plus royalties on products or services it may sell using the innovation.
Since no two innovations are identical, there is no "routine"
or "formula" when it comes to negotiating the terms
and conditions of a license. TechTips works with potential licensees
in a "partnership" spirit in that we do not create
an artificially high "entry barrier" by demanding
a high up-front license issue fee and we expect reasonable
royalties paid only when products developed using our innovations
are successfully sold by the licensees.
However, we do collect some up-front fees to make sure that
our licensees
are truly committed to developing our innovations and are
willing to pay up front a "deposit" for the opportunity.
The "reasonable" royalty rates we collect on products
sold usually are within the "industry norm" based
on several surveys and studies by licensing professionals
and licensing societies. When we negotiate the fees and royalties
with the company, we take into account the stage of development
and uniqueness of the innovation, the character of the industry
sector, the strength of intellectual property protection for
the innovation, the market potential of the products the innovation
may bring, the likely profit margin of the products, and the
risk (both financial and technical) the company may face in
developing the innovation to commercial uses.
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