Marketing Your Innovations

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.

Getting Down to Business with an Interested Company

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 the Technology Transfer Office (TTO) 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 TTO, 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 TTO 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 TTO 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. TTO 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.