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“Golden Share” model may appeal to start-ups, but VCs are likely another story


By David Schwartz
Published: August 27th, 2014

The Computer Laboratory@University of Cambridge has launched a new approach to licensing its IP to start-ups that it asserts will be attractive to new companies strapped for cash, strengthen relationships between start-ups and the university, and ultimately lead to the creation of more new companies.

Called the “Golden Share,” (www.co.cam.ac.uk/gold-share) it works like this: The start-up gives a small, non-dilutable percentage of the company (usually 1%) to the Computer Laboratory in exchange for the IP, which enables start-ups “to publicly and consciously link their destinies to those of the Computer Laboratory, and the Computer Laboratory to further strengthen their links with industry,” according to a statement released by the laboratory. The statement asserts the following benefits:

  • The deal provides “a clear association of the pedigree of your company’s founders with their training and education at the UK’s most prestigious university;
  • As a philanthropic gesture, which involves no cash outlay for fast-growing, cash hungry business, it nevertheless enables the success of your company to contribute in a small way, helping future generations of entrepreneurs and academics to follow in your footsteps;
  • On a practical level the 1% Golden Share scheme is a means of ensuring a continuing dialogue between the Computer Laboratory and your company through its various stages of development, enabling you to access the vast network of academics and specialists in your chosen field.”

The first start-up to gift the university a ‘golden share,’ 1248 Ltd., is unusual in that it was not even spun out from lab IP. Pilgrim Beart,its co-founder and CEO, had served as a business fellow at Cambridge and became familiar with the university’s ecosystem. “I like things that are simple enough that people can understand,” he explains. “Quite a few people, including me, felt that the IP policy was an impediment to starting companies.”

In his second start-up, Beart recalls, “we had to take IP out of two universities and it took us 18 months to negotiate IP agreements — and that’s ridiculous. It’s a horrendous waste of time, and it creates uncertainty.”

Beart concedes there aren’t any many benefits from this transaction to his company. “I suppose it’s a benefit to associate with a prestigious lab,” he notes. “If I had been a researcher in the lab then obviously the golden share creates a nice, simple, clean methodology for rewarding my parent organization.”

As for potential drawbacks, Beart continues, “you have to work out how to do it — but I enjoyed doing that, talking with the lawyers. In the end it seems to be relatively straightforward — we created a new class of shares. We have no rights ever except the right to participate in a sale, and we have voting rights to protect our rights — like if they are trying to dilute the share you have almost infinite voting rights.”

But that doesn’t solve a potential problem, he concedes. “When a new company has some momentum it has a burn rate; it needs more money to grow or to stay alive,” Beart explains. “They may be pressed into a deal they do not want to do but need to survive. Essentially the new funder can name their terms, and existing shareholders are crushed down. The university is protected in theory, but if the company is facing extinction anything is possible.”

One of the leading proponents of Golden Share, serial entrepreneur Hermann Hauser,who co-founded Amadeus Capital Partners, agrees with Beart about the complexity of current IP negotiations. “The main problem here is the tedious way in which universities treat IP,” he asserts. “There is so much discussion on what it is worth, endless negotiations, and I was very keen to make this formulaic. You don’t care what it’s worth unless the 1% is undiluted; the real idea is to maximize the number of spinouts formed and not maximize what the universities get for the IP. My argument is they will make more money since there will be so many more companies formed.” A detailed article on the benefits and potential drawbacks of the “golden share” model appears in the August issue of Technology Transfer Tactics. To subscribe and access the full article, as well as a subscriber-only archive filled with hundreds of best practices, case studies, and success strategies for TTOs, CLICK HERE

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Drug for Gaucher disease developed and licensed out of U Michigan receives FDA approval


By David Schwartz
Published: August 27th, 2014

A drug developed at the University of Michigan (U-M) to treat a rare genetic disorder has received FDA approval and will soon hit the market. continue reading »

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Tomorrow: Critical webinar on software and business method patents in wake of Alice Corp. vs. CLS Bank


By David Schwartz
Published: August 27th, 2014

Make no mistake – the rules have changed for business method patents. In the wake of the Supreme Court decision in Alice Corp. v CLS Bank, already the USPTO has withdrawn allowances issued for patent applications “due to the presence of at least one claim having an abstract idea and no more than a generic computer to perform generic computer functions.”

At the heart of the ruling are the long-debated and interpreted issues of subject matter eligibility, business method patents, and what sort of “inventive step” is required to transform an abstract idea into a patentable technology. In the software industry in particular, these questions and how they are addressed by the courts could well be the tipping point for billions of licensing dollars and in the ability of companies and universities to protect their software innovations and other business method patents.

To offer insight and clarify the decision as well as the PTO’s recently issued guidelines stemming from the case, Technology Transfer Tactics has tapped two experts from the law firm McDonnell Boehnen Hulbert & Berghoff LLP to lead this one-hour webinar. Please join Kevin E. Noonan, PhD, and Michael S. Borella, PhD, TOMORROW, August 28 for this critical program: Alice Corp. vs. CLS Bank: What’s Eligible, What’s Not, and What’s Still to be Determined? Our two attorney experts will delve into the Alice Corp. decision and address all the key issues it raises, clarifies, or leaves open to future interpretation. For complete details and to register, CLICK HERE.

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NC State start-up develops nail polish that detects the presence of date rape drugs


By David Schwartz
Published: August 27th, 2014

A North Carolina State University start-up has developed a nail polish that alerts its wearers when it comes in contact with date rape drugs. continue reading »

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7 reasons why launching your start-up in “stealth mode” is a mistake


By David Schwartz
Published: August 27th, 2014

In his recent Forbes article, start-up guru Martin Zwilling warns entrepreneurs against taking the “paranoid approach” of hiding details about the company and its progress in order to keep competitors in the dark. continue reading »

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Buck Institute licenses promising therapies for lupus and other autoimmune disorders


By David Schwartz
Published: August 27th, 2014

The Buck Institute for Research on Aging and Mount Tam Biotechnologies, a newly established entity of US Equity Holdings, have entered into a licensing agreement to develop a range of pharmaceuticals developed at the Institute. Specifically, the agreement includes advanced treatments for autoimmune disorders, including TAM-01, a promising therapeutic to battle systemic lupus erythematosus (SLE), the most common form of lupus. continue reading »

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Oxford spinoff develops system that instantly produces personalized treatment guides for patients


By David Schwartz
Published: August 27th, 2014

Deontics, a spinout from Oxford University’s tech transfer arm Isis Innovation, has developed personalized medicine software to guide doctors and patients through the process of finding the right treatment. The technology gathers, processes and presents scientific and clinical information, allowing for a personalized treatment guide for each patient. This is often a time-consuming and difficult process, but the Deontics system lets clinicians instantly view at the point of care up-to-date data relevant to their individual patient’s needs. continue reading »

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U of Michigan to launch start-up accelerator open to fledgling businesses worldwide


By David Schwartz
Published: August 27th, 2014

The University of Michigan (U-M) Ross School of Business and its College of Engineering are joining forces to launch an accelerator program to support early-stage university start-ups. Named after Bharat Desai, a 1981 Ross MBA graduate and founder of global technology services company Syntel, Inc., the Desai Family Accelerator will provide infrastructure, financial resources and mentorship to promising U-M start-ups, as well as to fledgling companies from across the region. It is slated to launch in early 2015. continue reading »

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New start-up accelerator in Milwaukee will connect 20 regional universities


By David Schwartz
Published: August 27th, 2014

A new regional start-up accelerator will connect 20 academic institutions with Startup Milwaukee and the Greater Milwaukee Committee’s Innovation in Milwaukee Initiative (MiKE). Tentatively titled The Commons, the program would be jointly operated by Startup Milwaukee and MiKE and would be located in the city’s “innovation district” in Walker’s Point. continue reading »

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Novel IP triage and scoring system makes ranks technologies by commercial potential


By David Schwartz
Published: August 27th, 2014

The TechAdvance Technology Assessment Handbook and its companion online version offer an objective and scientifically proven model for assessing your portfolio of technologies and identifying those with the greatest potential for successful commercialization. Technology Transfer Tactics is offering this outstanding product through a partnership with apprimo, a Münster University spinoff company whose tech transfer staff developed the system. Using its scoring methodology for early-stage technology assessment, based on 43 researched and validated criteria, TechAdvance will help you to:

  • Increase your commercialization success rate;
  • Objectively assess and triage your technologies;
  • Invest your patent, R&D, and marketing budgets more productively;
  • Avoid the high costs of non-performing technology assets;
  • Take the guesswork and subjectivity out of investment decisions;
  • Justify your decisions to faculty and preserve faculty relationships;
  • Keep politics out of your decision-making;
  • Back a high percentage of winning technologies.

The affordable TechAdvance tool has been carefully tested over years of development and is designed to provide a consistent, organized, and objective system for investing your limited resources in technologies with greatest chance for commercial success. It is available as both a print workbook and online module. For complete details, CLICK HERE >>

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U of Akron Research Foundation partners with investment firm to launch $30M fund for polymer tech start-ups


By David Schwartz
Published: August 27th, 2014

The University of Akron Research Foundation (UARF) and Acquire Investments LLC, an Akron-based investment firm, are partnering to create a fund to commercialize polymer technology in Ohio. The Global Polymeric Materials Technology Commercialization Fund has already raised almost $11 million and aims to raise a total of $20 million by the end of the year in order to apply for a program in which the state of Ohio would match half of that investment with its own funds. continue reading »

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New tech transfer center aims to boost economic development in Ghana


By David Schwartz
Published: August 27th, 2014

The Council for Scientific and Industrial Research (CSIR) in Ghana has launched a $500,000 Technology Development and Transfer Centre to boost the commercialization of research technologies. According to CSIR officials, a chronic gap between research and the private sector has contributed to Ghana’s slack pace in industrialization. continue reading »

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