As universities continue to modernize their economic development efforts, they are refining their initiatives to include:

• Performing research aimed at solving real-world problems of regional or commercial interest
• Giving students valuable knowledge, marketable skills, and entrepreneurship training
• Creating new ventures and transferring technologies to in-state companies for job creation and economic growth

So how do you gauge the impact of these efforts? And more importantly, how do you do it cost-effectively?

Technology Transfer Tactics recently sponsored a webinar on this topic led by Chester Bisbee, PhD, JD, David Conrad, PhD, and Lisa Lorenzen, PhD. In the program, Benchmarks and Metrics for Gauging Your TTO’s Economic Development Impact, these experts offered a plethora of sound advice and best practices, and I have included below just a few time- and cost-saving tips they shared. To purchase the entire recorded session on DVD, on-demand video, or print transcript, click here.

Bootstrap Your Data Gathering and Reporting Efforts by Using:

• Part-time (but experienced) personnel
• Interns to aggregate data
• Outside consultants

Leverage All of Your Resources:

• Internal resources — development office, public relations, alumni office
• Local, regional, state, federal resources — both private and public

Gathering and Reporting All That Data

• One of the challenges when trying to come up with an annual report for economic development activities is that the data is scattered across a lot of different organizations. From the research park, to the tech transfer office, to the incubator, sponsored programs and beyond. Moreover, it’s sometimes on different spreadsheets, so implementing one centralized system is key. 

  When you go about building a system, it’s important for you to think about what questions not only you’re being asked by people government or economic development agencies now, but what future questions they’re going to come up with. Because if you don’t build a database correctly with the right structure, you won’t be able to instantly slice and dice the data in a way that will answer a particular question. 

• Talk to each user and try to anticipate what they will ask in the future — such as how many of your start-ups raised more than $1 million in venture capital, or how many employees at the start-ups live outside the county or state that the university’s located in. 

• Use prepopulated web forms that allow companies and organizations to change what’s incorrect or update what’s changed from the last time you did a survey. They’re better at getting the data correct, and it takes a lot of the burden off you. 

• Find a way to incentivize and reward people who contribute data to the survey or to the data gathering and reporting initiative. The University of Iowa uses Qualtrics, which they have a site license for.  It’s an automated system to collect responses and send automated e-mail reminders. 

Presenting All That Data:

While your vice president may prefer the dashboard with graphs and numbers, the state legislature typically wants to hear a story of some nice successes. You must be able to report your successes using a format and method that speaks to your audience directly.

Thank you to our expert program leaders for providing an outstanding session! To see all our distance learning programs and other valuable resources for tech transfer professionals, click here.

When your TTO commercializes a technology through an early-stage company, there are a number of different ways — and a lot of complexities — to the way that you structure both economic and management rights.  Whether you choose an equity stake or an ownership stake in the company, these terms must be negotiated and we have some strategies for getting the result that’s right for your university.

Benjamin D. Kern, Partner, Winston & Strawn LLP recently presented a highly rated distance learning program titled: Negotiating Your University’s Equity Stake in Start-Ups for Technology Transfer Tactics that not only reveals the objectives of each player in the negotiating game but  provides solid negotiating tactics as well.

However, before you dive headfirst in to a negotiation, you must first understand who you are negotiating with and what their end-objective is. So, let’s look at the different players in the ecosystem around university technology transfer:

When structuring equity rights, the start-up needs to take into consideration that the company is also going to be dealing with some sort of outside funding.  So obtaining funding and resources — and resources also includes attracting personnel, the people who are actually going to carry the start-up from point A to point B or farther.  The second goal that is worth talking about is bringing a product to market.  So a founder of a company, whether a faculty founder or someone who comes from the business world typically is interested in seeing the idea or the product that’s been developed make it into the marketplace and become a great success. 

Start-up founders are typically interested in their own professional careers, and in achievements as a CTO, or a technical founder, or a CEO of a young company, which can provide, obviously, great personal benefits to someone separate and distinct from all the other objectives.  When someone has developed what they believe is a new technology that needs to be out in the marketplace, it’s also often the case that they want some level of control over how the technology gets into the marketplace, what kind of products are developed using it, and how that product is used, because that will reflect, obviously, on the way that the technology and the founder are regarded personally.  Finally, economic returns. It’s an unavoidable topic, and it’s also a good segue into the next category of players in the ecosystem, and that’s investors.

Looking at the investor bubble, you can see that their key role is helping the company to achieve its number-one bullet point at the top: obtain funding and resources.  An investment fund or a venture capital fund typically has limited partners investors, and the primary mission of the venture capitalist is to make a good return for those investors.  Most venture capital funds, have a ten-year life and broadly speaking, most investment funds have a five-year period where they deploy the funding that they’ve raised, and then a five-year period when they harvest the proceeds from that funding.  So investors have objectives that involve not only achieving a return, but also achieving that return in a defined period of time.  Investors are also typically interested in growing exciting companies and then being part of companies that achieve prominence or great success.

The university has a much broader constituency.  If the fundamental mission of the university is to further the growth of human knowledge and to disseminate that and make the world a better place by virtue of the technology that’s discovered in the university setting, there is a much grander goal than the dollars and cents that we focused on in the overlap between start-ups and investors.  That being said, when a university licenses its technology into a start-up, it’s often the case that that objective is not as prominent as the commercial objectives of the venture.  Universities also, like investors and like individuals who start young companies benefit greatly from having visibility and from having prominence to their achievements. When a university is able to grow prominent companies, and prominent brand names, and labels, and is able to taut those, it’s great for the university’s visibility and can enhance a university’s household name.  That’s why choosing a type of equity to take in a company, figuring out how much of that equity the university should hold, and figuring out how that equity interest might change over time are all key considerations during negotiations. Based on the technology, market and funding opportunities, universities often take one of a number of different positions in the amount of control or management influence that they want to exercise. 

Just because each party is interested in getting a good return from their investment in the start-up doesn’t mean that everybody’s going to agree.  In fact, it often means the opposite. 

Look at the major categories of equity rights in the table below for a snapshot of each party’s main concerns to consider when preparing your equity negotiations.  The university perspective is a particularly interesting one, because there are elements of the university’s perspective that can be common to the perspective of a company founder.  Obviously, if a company founder is an academic and has academic objectives, there can be a lot of commonality between they (faculty company founder) want and what the university tech transfer office wants to see happen from a start-up.  It is also the case that the university is often a key portion of the efforts that go into making a company possible at all, and then university technology is absolutely fundamental to pursue a start-up. 

The university and the founder are often united in many ways as the first groups on the ground with a stake in the success of the venture.  And in many ways, this can lead you to the conclusion that a university’s equity position and a university’s equity rights should look very much like a founder’s equity rights and equity position.  On the other hand, investors who come in and support a business typically take a more measured approach.  Where a founder may put all of his or her eggs in a single basket in a start-up and devote all of their work and time into making the start-up successful, an investor typically has a portfolio of investments and this is only a portion of what the investor is doing.  And an investor is able to spread his or her time across a number of investments, is able to diversify risk, is able to draw from experiences in other situations that are happening concurrently or have had them before.  In all of these ways, the university bears some similarity to an investor.  It’s also the case that both investors and universities may have more limited time frames when they want to see success come out of a young company.  The university often sits somewhere on the spectrum between founder and investor, and this can make for interesting combinations of equity rights. When an investor comes in, they will often say that the university should be treated like a founder, which is shorthand for saying that the investor should have superior rights. 

Even though each player’s interests differ, and those interests directly what they seek in terms of equity interest and equity rights in the company, one common goal remains: the success of the company. Keeping that goal front and center, along with the university’s objectives is paramount to a successful negotiation.

To hear specific negotiation strategies, click here for the DVD, OnDemand Video or PDF version of the distance learning program: Negotiating Your University’s Equity Stake in Start-Ups Presented by Benjamin D. Kern, Partner, Winston & Strawn LLP. 

There are three main elements to making an invention a commercially viable project, and that invention needs to be strong in all three of these in order to succeed.  First, the technology has to be developable and have limited hurdles to development in terms of time, money, and regulation. Second, the patent needs to be strong, defensible, and enforceable.  And third, the invention must be targeting a compelling market that can be accessed.  A hurdle in any one of these domains can act as a significant barrier and even prevent commercialization.

Dr. Michael Manion recently presented a critically acclaimed webinar for Technology Transfer Tactics that helps technology managers to identify where those hurdles may be and how to sidestep them upon discovery. Read on for a small snippet of what he revealed during his presentation. CLICK HERE for more information on ordering the full recorded program, including a free sample of his Invention Evaluator tool as well as his 35-slide PowerPoint presentation. 

Developable

Quite often, we take an invention disclosure and assume that that’s what the invention is.  But the important first step in an analysis of an invention is to take the invention disclosure and describe what the essence of the invention is in your own words. 

This is important to the rest of the process, because this is where the analysts start to use their own language and development strategies for identifying literature, and patents, and so forth down in subsequent sections that you wouldn’t identify if you were using the same language as the inventor.  Part of the value of an analysis is providing objectivity, and this really begins with a robust description of what the essence of the technology is.  Inventions can be one or multiple parts of these things: it can be a material, a component, a device, a method, or a service, or it can be a combination of these. Break out what the features and the benefits are.

Identify hurdles.  The two main hurdles towards technical development of an invention are the regulatory and development hurdles. Identify those early on and place where the technology is within that landscape.

Patentable

So who’s filing?  Are they large multinational companies, or are they predominantly university or independent inventors, indicating that it might be a very early stage technology, for example?  If it’s a large multinational and it’s dominated and very consolidated in terms of filing activity, there might be a maturing technology.  You can use proprietary software programs to give you the trends in filing activity over the last decade as well, so you can start to see some trends — or make some inferences about the filing activity on that broader level to give you a snapshot of what’s happening in that technology landscape.  And then it’s important for the analysts to take that information, and summarize it, and make inferences about it so that it’s not just a pretty picture; it actually gives you some meaningful information to use on whether to move forward with the patenting process.

Marketable

The market analysis follows and identifies what the opportunities are for that particular invention, and this might be more than one.  In that case you really want to identify what the primary opportunity might be like.  Once you’ve identified that opportunity, then look at what the industry is doing, what it looks like, what trends there might be, and so forth to get a sense of whether there is a market opportunity.  If there is, then you need to understand how you can compete. Understanding what the competitive landscape is for that industry and particularly for that opportunity is really important as well — and to bring it all together into a SWOT analysis to summarize the strengths, the weaknesses, the opportunities, and the threats for the invention. 

SWOT analysis is an MBA-focused tool that is useful to pool all this information together.  It looks at the strengths, the weaknesses, the opportunities, and the threats.  So the strengths and the weaknesses are intrinsic attributes that are either positive or negative, and this is focused on the market assessment, really pulling together a lot of the elements in the analysis in terms of the IP analysis and the technology analysis as well.  So intrinsically, what are the strengths and the weaknesses?  What’s good about the technology?  What’s potentially a challenge?  And then the opportunities and threats are externalities: so what’s happening in the industry?  Is it receptive to disruption?  Is it dominated by large multi-nationals that have a strangle hold over the industry?  Are there macro economic sectors?  Are there drivers in particular market segments that might be interesting? 

Pooling that all together into this SWOT analysis is a useful way to summarize the commercial viability of a technology.  It brings together all those hurdles, identifies what needs to be addressed in order to move a project forward, and where the opportunities may lie.

To get the full program, along with access to a free sample of Dr. Manion’s Invention Evaluator tool as well as his 35-slide PowerPoint presentation, CLICK HERE.  

It’s safe to say that the majority of tech transfer offices have started using social media with at least one platform. But you may not be familiar with all the different platforms available and the utility that they provide — and it may be hard to decide how much time you should invest in your social media strategy as part of your traditional marketing mix.

In the end, social media, if a targeted effort is put into it, can be one of the best ways to get your technologies out to the audience that counts.

This was given some outstanding context and how-to focus in our recent webinar Marketing Your TTO’s Technologies Via Social Media 2014: New Platforms, Tracking Tools, and Trends. (For info on getting this session on DVD or on-demand video, CLICK HERE.)

But even digital marketing can get diluted, so choosing the appropriate platform and message is key. Take a look at the comical image (lower right) posted to Instagram by digital marketer, Doug Ray.  It really puts social media — and the messaging each platform provides — in its simplest terms.

What message is this image conveying?

• Pay attention to context. 
  Do you want to tell the world or a select audience about a new technology?

• Start respecting the platform.
  You must understand the nuances that make each platform interesting and craft your message accordingly.

• Think about timing.
  The time of day you post your social media accounts can have a huge impact, if/when they even get seen. 

• Work closely with your communications office.
  They know how to communicate through certain media channels, and they can help you map out a marketing plan that coincides with the university’s mission and message. 

• Investigate and try new platforms as they arise.
  There may not be a large impact, but it also could lead to an unforeseen success.  For example, at the University of New Mexico, after some research into crowdfunding, the TTO decided to lead the effort for their researchers instead of researchers individually attempting to create a crowdfunding campaign. This has helped inventors bridge the gap between when their government funding ends and their investment funding has yet to begin. They took three different research proposals that ranged from needing $10,000 to $25,000 and tried to seek donations through RocketHub.

  They were not successful in reaching their goals, and on the surface it seemed like a failure. But it really expanded their reach.  An investment firm saw the postings on the crowdfunding site and it led them to UNM STC’s website, which ended up in a very productive phone call in which they discussed their portfolio as a whole. Shortly after came a visit to the university, and ultimately an option license agreement was executed and a new start-up company was formed. 

So, start with some of the key platforms and then figure out what the key supporting platforms could be based on your strategy. For example, if you want to focus on LinkedIn and Twitter, as you’re out at technology seminars and meetings, post presentations on Instagram that you can then feed up to your Twitter account. Knowing the landscape beyond the key social media platforms is helpful and something that should be explored, along with presentation platforms that you can also use to support sort of your priority platform strategy. 

– – – – – – – – – – – – – – – – –

Special thanks to Cara Michaliszyn, New Ventures Development Manager with STC.UNM, the commercialization arm for the University of New Mexico, and Stephen Nappi, Associate Vice Provost for Technology Development and Commercialization at Temple University. For more valuable insight into emerging social media platforms, you may purchase the webinar Marketing Your TTO’s Technologies Via Social Media 2014: New Platforms, Tracking Tools, and Trends on DVD, On-Demand Video and PDF Transcript. CLICK HERE for details and to order.

A few weeks ago, we hosted a hugely popular webinar titled: Dispelling SBIR/STTR Funding Myths and Misconceptions for University-Based Innovations that was led by Geoffrey White, PhD, President of Discovery Consulting, LLC. The program is filled to the brim with excellent information and factoids about each program and garnered high praise from attendees. The question and answer session lasted over 20 minutes and the program continues to draw attention, so I thought it would be a great idea to include a portion of it as this week’s blog post. But, this is just the tip of the iceberg — Dr. White covered over 30 slides worth of information in the program and you can get it all — just CLICK HERE to purchase the recorded session.

Read on to see a selection of questions from attendees –some of the answers may surprise you.

Employment requirements

Q: “I understand that SBIRs require that PIs at companies be primarily employed by the companies.  Does this mean 50 percent or more?  May those primarily employed PIs at the companies also have a 50 percent appointment at another organization, such as the university?”

Dr. White:  If you’re going to be a PI for an SBIR, it’s 51 percent employed at the company, and 51 percent is measured by dollars, not time.  And the other 49 percent of the time, a person could be employed by a university, or another company, or something else.  And sometimes I’ve had people at universities do just that: they leave the university for the course of the SBIR, and they get 51 percent of their salary during that time from the SBIR.  And the reason they do that is because they don’t have someone else to go and work at the company, and they need to [fill that role].  Otherwise, you may as well just do an STTR.

Another reason for doing this is that some universities get pretty possessive about some of [their] technologies. Some companies simply say, “You know, that’s too much.  I don’t want to pay those kinds of royalties.  So I’m going to go do it at the company, and then I’m going to go back [to the university].” 

New Drug Start-Up Funding

Q: “Will NIH fund pharmacodynamics, pharmacokinetic studies and/or toxicology for a new drug in preparation for an FDA IND submission?”

Dr. White:  Absolutely.  I’ve gotten lots and lots of funding for doing that. The Phase I is a test of feasibility — in fact, what we did is we basically showed that this new cancer drug that we have is very effective.  We showed that in preliminary studies, and then the Phase I studies are just showing some more animal models.  And all of Phase II is all the IND enabling studies that one needs to do.  And at the end of the Phase II, we’re going to file an IND, and hopefully we’ll use a Phase IIB to pay for the Phase I/II clinical trials.

Q: “Do you think a drug start-up company based on a novel high throughput screen is fundable through SBIR or STTR?”

Dr. White:  In principle it is.  It just depends on the novel screen.  It’s going to have to allow you to do something that can’t already be done, and maybe you’ll do it cheaper, maybe you’ll do it a little bit faster. But unless you fit at least that tenfold better [than existing technologies], or it will now allow you to screen against the disease that was previously just impractical to screen against.  It’s going to be tough.  So I’d have to know more details about that.  But in principle, yes, you can do it.

Q: “Do SBIR and STTR support clinical trials?”

Dr. White:  That’s a very confusing area.  The answer is: yes, they support clinical trials.  They do not support Phase III pivotal clinical trials of efficacy.  They support Phase I and Phase II trials, which are not for efficacy.  That’s the difference.

Application and Business Strategy

Q: “Is it a long-term business strategy for a small business to rent lab space indefinitely from a university?”

Dr. White:  I don’t think it’s a good long-term strategy.  In terms of SBIRs — no, that’s really a personal decision.  In terms of getting SBIRs, you could do that.  I don’t know why you couldn’t do it if the university was willing to do it.  Of course, the downside is that if the university is now going to want to share in the IP. You just have to decide how that all works for you and what your comfort level is.  Now, they’re doing something for you, you want to do something for them, but how much of it do you want to give up?  So you just have to work out those details and see what’s right for you.  So in terms of a business strategy, there are a lot of considerations to come up with, and it’s really going to be a personal decision: risk versus reward.

SBIR vs STTR: Who has more money available?

Q: “Is there more opportunity in SBIR or STTR in terms of the total money available?”

Dr. White:  There’s a lot more money available with SBIRs, and that could be a consideration, but that’s  if you look at the scores. Usually SBIRs are a lot more competitive in terms of scores than STTRs, so it’s really not the amount of money, but it’s really the score that’s important.  If you’ve got a great project, and you’ve got a great team, and you’ve got a great experimental design, you’re going to get a good score. Also, if you did get a really good score, and for some reason the STTR didn’t get funded, you could always call the program person and say, “Hey, if I turn this into an SBIR, will this be fundable?”  And the program people have the right to do that.  If they want to, they can let you change it to an SBIR.  So they have to agree to do that, but it’s not hard to do.  You just have to be able to find a reasonable way to change around where the money is going. If you can find a way to get the right PI in there of equivalent strength, you can change it to an SBIR if you had to. 

Using a Consultant

Q: “What is the best strategy for academic university faculty who are first time SBIR applicants to succeed, especially given that they don’t have much business experience?  Should they necessarily have business consultants?”

Dr. White:  It’s a difficult question.  You should certainly be able to go and talk to your tech transfer office and get some good input.  A lot of this is pretty straightforward.  Go talk to other people who have started companies or gotten SBIRs.  You can go and search the NIH reporter and — or the NSF has an equivalent database, and so does the DOD.  Find people who have gotten funded in your general area.  Call them up.  E-mail them.  And find people who have gotten funded multiple times, not one time.  And chances are they’re going to talk to you and give you the benefit of their experience.But going out and hiring a consultant to learn that stuff is probably not what I would do.

CLICK HERE to purchase Dispelling SBIR/STTR Funding Myths and Misconceptions for University-Based Innovations on DVD, On-Demand Video or PDF transcript. We’d like to thank Dr. Geoffrey White for his presentation.

A University Hyper-Local Innovation Ecosystem (Hy-LIE) is defined as a cluster of R&D-oriented entities readily accessible to the campus – including small & large corporations, technology veterans, entrepreneurs and early stage investors as well as related supply chains and service providers.

This notion was born several years ago at UC Berkeley when Mike Cohen, Director of Innovation Ecosystem Development in the Office of Technology Licensing, asked how university innovations get commercialized.  From that came a unique framework that led to several tangible initiatives. He then took his idea one step further and co-founded Berkeley’s SkyDeck, which is an information technology accelerator. 

During his webinar on the subject, Mike shared his top 10 best practices to foster a Hy-LIE in your university’s region, and we are pleased to share them here with you. He also identified the four pathways of innovation as well as systematic activities that have an asymptotic impact on commercialization and how organic activities can have an exponential impact while staying cost-effective. Read below for the top 10 best practices and CLICK HERE to order this valuable webinar on DVD, On-Demand Video or PDF Transcript.

10 Best Practices to Foster University Hy-LIEs:

1. Students & Faculty
   Provide entrepreneur-oriented MBA and technology management programs as part of your curriculum that feed the local innovation culture.
2. YAPS: Yet Another Poster Session
   Get students, mentors, faculty, and local business to meet through poster sessions. That’s a good mechanism to get MBA and applied engineering science students, grad students, and faculty to mingle and get to know each other. 
3. Competitions: start-ups, business plans, tech innovations, big ideas
   Business competitions have evolved into start-up competitions, especially with the notion of lean start-up, and are a great way to keep entrepreneurialism in the forefront.
4. Project Courses:
   Research-to-market, project-based classes with interdisciplinary teams are key. A great example of this is UC Berkeley’s Cleantech-to-Market course. It brings interdisciplinary teams of students to focus on the commercialization of a research effort.  One caveat: the purpose of these teams is not to create a business plan: it’s more to learn about a research team’s area, and provide them with feedback on the direction of the research.
5. University start-up accelerators
   Have a place where entrepreneurs, teams, mentors, etc. can meet, dish on ideas, create companies and utilize the resources that accelerators are known for.
6. Mentoring
   Having mentoring office hours with VCs and serial entrepreneurs is critical to keeping the university/local community relationships intact.
7. Start-up service packages
   Leverage your business resources: accountants, attorneys and marketers in your local area that can help companies form, incorporate, and apply for SBIRs and STTRs.
8. IP Management with an “impact-oriented approach to IP” (not just money)
   It’s good to have a tech transfer office that has more of an impact orientation on managing their intellectual property.  So it’s not just about making money; it’s really about how to manage intellectual property to maximize its commercialization.  And sometimes — for example, in the software area — that can mean open sourcing and putting it into the public domain.  It doesn’t always mean licensing the technology exclusively to make the absolute most money in the short term, which can sometimes impede a start-up’s progress and the success of commercialization. 
9. Partnering between university, local businesses & government
   We are talking between universities, local businesses, and government. If you go to www.berkeleystartupcluster.net or .com, you’ll see how the university came together with local businesses and the local government to establish this start-up cluster in downtown Berkeley, adjacent to the UC Berkeley campus. 
10. Office parks for mature corporations to leverage university & anchor start-ups
    As start-ups mature, they incrementally grow into bigger space.  And office parks also have opportunities for anchored tenants, large companies that can help, again, with the critical mass of your Hy-LIE. 

One thing to remember is that Hy-LIEs are all about a “start here, stay here” mentality. Maintaining a heavy focus on a certain type of technology, whether it’s a biotechnology, information technology, or a subset therein that your university excels in will give you a competitive advantage that encourages local innovation and business growth.

More in-depth advice is provided in the archived webinar, “University Hyper-Local Innovation Ecosystems: How to Grow and Leverage Their Strategic Potential”, which is available on DVD, On-Demand Video and PDF Transcript. To order or for more information, CLICK HERE. Technology Transfer Tactics would like to thank Mike Cohen, Director of Innovation Ecosystem Development in the Office of Technology Licensing at the University of California-Berkeley, for his valuable insight and leadership in the distance learning program. 

Trolls, NPEs, patent assertion entities; they go by many different names, and these entities have received a lot of interest of late.  Did you know that 60% of all patent cases now involved such entities?  In 2012 there were 4,700 patent suits, and over 2,400 of those cases were filed by NPEs or patent trolls. 

In this week’s post we’ll discuss the dynamics involved with a troll case and talk about ways you can avoid litigation when faced with an infringement lawsuit brought on by an NPE.  For starters, you can expect about four entities to be working together on a troll case against you:

Patent Troll 
They hold the patent. They may be the entity who sues as well or funds litigation, but sometimes not. 

Licensing Company
The patent licensing company will help a patent troll assert their patent, and sometimes they act as a broker connecting the patent troll to a law firm who’s going to actually handle the litigation.  The patent licensing organization for connecting both the patent troll and the law firm is going to get a percentage of the recovery as well. 

Law Firm
A law firm will usually takes these patent troll cases on contingency. 

Investment Fund
Believe it or not, there are funds dedicated solely to investing in intellectual property cases.

While you can have up to four entities on the other side of the table, what’s key to the whole patent troll business model is that it’s set up to get near-term revenue.  They’re not set up to withstand long-term, multi-year litigation that may risk the patent.  It brings their whole business model to a screeching halt, and that’s what the new proceedings under the AIA do: inter partes review, covered business method patent review, and post-grant review. 

AIA is working, and these new trials are successfully resolving and fast-tracking resolutions.  Right now, the PTAB is the busiest patent court in the country; much more popular than inter partes reexaminations.  So the question is: do we need further reform?  We have the industry pretty much resoundingly jumping onboard and filing these contested cases, and ever since the proceedings started September 16th of last year, you’ve seen a straight upward trajectory. 

This is a first true alternative to litigation.  These proceedings are fast, they’re easy, they’re cheap, and they’re lethal. 

They’re fast because you go from trial institution to final written determination in a year. 

They’re easy because the claim construction that the PTAB uses is the broadest reasonable construction, not the Phillips standard that a district court uses.  It is a broader standard.  Also in front of the PTAB, the burden of proof is preponderance of the evidence.  It’s not the district court’s clear and convincing, and there’s no presumption of validity before the PTAB.  So it’s easy to invalidate a patent.

It’s cheap, because when you think of a typical patent case in a district court, it runs between $3 million to $5 million. These cases come in at the $300,000 range.

They’re lethal. The PTAB has no problem invalidating a patent whatsoever. In fact, the SAP case dealt with section 101, and they showed no deference to the examiner’s determinations during prosecution  and showed no deference to the patent office itself.

So how high this will go remains to be seen, but inter partes review really is a true option to litigation, and a great weapon to use when the patent trolls come knocking.

More in-depth advice is provided in the recorded distance learning program, Patent Trolls Under Fire: Strategies, Tactics and Legislation Impacting University Patents & Licensing, which is available on DVD, On-Demand Video and PDF Transcript. For complete details and to order, CLICK HERE.

Technology Transfer Tactics would like to thank Michael Kiklis and Kevin B. Laurence from the law firm Oblon Spivak for their valuable insight and leadership in the distance learning program.

Arguably, one of the most challenging issues for technology transfer professionals is choosing which technologies to move through the pipeline and whether to license out or create a start up around the innovation. In fact, each decision your team makes can run the risk of degrading relationships with researchers (when you tell them “the baby is ugly,” or alternatively wasting tens of thousands of scarce dollars on technologies that just aren’t commercially viable. So how do you make these tough decisions and make sure you back more winners and fewer losers?

You can start by adopting the proven best practices covered in our recent distance learning program Focus Your TTO Staff and Budget on the Winners: Pre-launch Considerations for University Innovations. The specific strategies covered by our expert panel will bring higher success rates, more effective use of staff time and patent budgets, and better relationships with faculty inventors.

In this week’s feature post, we’re going to focus in on some of the key pre-launch questions you must ask yourself regarding the market — rather than the science behind the technology:

1. Does your technology/science/product address a critical unmet need and market opportunity? If so, how large is the opportunity? What is the model? Who are the customers and are they obtainable?  Can you articulate what the need is and why it exists?  What does your technology offer in terms of the solution that does not already exist in the market? Is there competition?  The alternative solutions, if they exist, have got to be examined as if they were the technologies that you were trying to bring forth to the market; not dismissively, not redundantly. And finally, if not for your technology, what would the customer actually do? 
2. Can you describe the customers and quantify the sales of the nearest competitors or comparable companies? Are those sales significant? Are they enough to justify the investment? Are they sufficient to justify the launch of a new product? Who writes about or covers the specific areas that you’re talking about? Almost every successful technology will have some public company embodiment. It’s worth finding out from brokerage houses and investment bankers who writes about it, and talking to them. These individuals, these analysts, live with the products and the competition and are an invaluable resource. And what do these same analysts have to say about your product or solution?  
3. Is the technology market-ready and promotable? What methods should be employed to promote the product?  On what basis do clients know to buy this product?  How do you know that’s the basis on which they buy the product?  What are the most important reasons they buy? If not your product, whose would the buy?  What will your clients tell you about the product, and how will you tell your clients about the product?  What will make them buy?  How will you keep others from displacing you or competing with you?  The barrier to displacement, or the barrier to competition, is a critical element of the decision to go forward in commercialization.
4. Do you have proof of concept? How do you know your product or service is going to work?  What makes it a proof of concept?  Do you need to build prototypes?  Who will make them?  How will you test them?  And after the tests succeed, are there standards of proof which once reached will be taken as objective — as evidence of risk reduction? 

Most likely, these elements of market analysis, of opportunity, of competitiveness are addressed in a limited fashion by the academic inventor, and that’s where the TTO’s expertise comes in to play. While this is a very small sample of the considerations you need to home in on before launching a start-up around a technology, the highly rated 90-minute distance learning program includes much more detailed information and guidance. You can purchase the full program, complete with all handoutmaterials, on DVD, On-Demand Video or as a PDF Transcript by CLICKING HERE.

Technology Transfer Tactics would like to thank the following individuals for their valuable insight and informative presentation.

• Margaret Offerman, MD, PhD – Principal at The Salutramed Group
• T. (Teo) Forcht Dagi, M.D. – Partner, HLM Venture Partners
• Jack D. Capers, Jr. Partner, King and Spalding
• Russell M. Medford, MD, PhD – Co-founder, President and CEO, Salutria Pharmaceuticals, LLC

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CALL FOR SPEAKERS

Technology Transfer Tactics’ Distance Learning Division wants you!
If you have a case study, topic of expertise and are interested in presenting a webinar, please send the topic and your bio to Debi Melillo dmelillo@techtransfercentral.com for consideration.

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I hope everyone came through last week’s weather unscathed. Here in the Northeast, we had over a foot dumped on us in some areas. The kids loved yet another snow day… us parents, not so much! Fortunately, I’ll be getting far away from the white stuff and heading to the Annual AUTM conference in San Francisco tomorrow. If you’ll be there, visit us at our booth in the exhibit hall. We’ll have really cool new “Tech Transfer Warrior” t-shirts to give away as prizes and bonuses as well as show-only special deals on distance learning programs, newsletters and references. We are looking forward to meeting you and enjoying a much-needed break from winter weather!

In today’s post we’re highlighting a distance learning program we hosted last year that was led by Gary Breit, who is the Director of Innovation Management with the University of Louisiana, Lafayette. Gary has a proven track record of significantly increasing the disclosure rates in each tech transfer program he’s headed. His proven method shapes invention disclosures to affect the marketability of those technologies while controlling costs.  This process is really the first step towards building a collegial relationship and providing excellent service.  While this approach is a bit labor-intensive on the front end, the results can be astonishing. Read on for some of Gary’s best practices for building the foundation… and if you’d like to get the entire recorded webinar on DVD or on-demand video, CLICK HERE for details.

Think of tech transfer as a sales and marketing issue with heavy overlays of the technical and legal.
When you recruit, recruit brand managers from industry. It’s difficult to do in the academic milieu, so recruit scientists and try to back-in or teach something about sales and marketing tactics.

Create a case for a new, compelling opportunity. 
Meet first with the chief academic officer.  In some universities, that’s called the provost.  Regardless of the official title, this academic officer needs to understand, number one, your commitment to the academic milieu, and subsequent to that the approach you’re going to take to tech transfer, the policies that you’re going to follow, the practices that you’re going to use. 

Then talk to the dean.  The dean wants to hear about service expectations.  And, finally talk with the department chairs.  Now, you want to do two or three things with the department chairs… Remind them of the process from the faculty viewpoint, secure a departmental seminar invitation (impact the faculty members through a newsletter, if you have one, through the direct visits that you make, and through the departmental presentations.) It’s important that you get to that head of the department or chair and secure an invitation to present.

Finally, engage with faculty and understand the faculty’s pressures.  During this meeting, you want to find out what their goals are, what their needs and their pressures are.  Where are they in terms of tenure and promotion?  How well are they funded and by whom? 

Get your hands on each faculty member’s research plan.
Every faculty member constructs one and has communicated the plan to funding agencies, so you need to understand that plan to anticipate the resultant IP, the timeline (and shared inventorship or ownership , etc). This is where electronic and personal follow-up meetings in the faculty’s own space or lab are most beneficial.

The Southern Paradigm.
The Paradigm is based on the notion that faculty service results from understanding faculty through an orderly series of communications.  These communications ensure that you understand the faculty member’s field, personal aspirations and concerns. The ultimate goal is to increase the number of new IP disclosures and to “shape” those disclosures to increase value and lower expenses.

For more in-depth details regarding the Gary’s approach, please CLICK HERE to order the archived webinar, Get Aggressive and Double Your Faculty’s Invention Disclosure Rate, which is available on DVD, On-Demand Video and PDF Transcript.

We thank Gary Breit, who is the Director of Innovation Management with the University of Louisiana, Lafayette for his valuable insight.

CALL FOR SPEAKERS

Technology Transfer Tactics’ Distance Learning Division wants you!
If you have a case study, topic of expertise or are interested in presenting a webinar on a program listed in our 2014 roster (found here) please send the topic and your bio to Debi Melillo at  dmelillo@techtransfercentral.com for consideration.

If you’re like most TTOs, increasing demands for results, yet no increase in staff, means you could face rising backlogs of invention disclosures, slower response times, missed revenue opportunities, and disgruntled faculty.  But there is a proven way to bring on aggressive and talented help without busting your budget — and process more invention files than ever while breeding the next generation of entrepreneurial scientists, lawyers and business professionals.

How? By expanding your tech transfer intern program.

Adding highly motivated students to your team, and improving the intern program’s effectiveness and usefulness to your TTO,  will not only significantly expand your office’s manpower and productivity, you’ll also provide a richer, more valuable, real-world learning experience for your student interns. 

Lesley Millar from the University of Illinois at Urbana-Champaign, and Jarett Rieger Esq., MBA, from Moffitt Cancer Center, have each created finely tuned and well-oiled intern programs that bring huge rewards to both the TTO and the students. In today’s blog, we’re going to highlight some of their best practices that were featured in our recent webinar: Beyond Internships: Creating a Student-Based Workforce in Your TTO (CLICK HERE for webinar details and to order).

Make interns a part of your commercialization team

• In many offices, interns feel like outsiders and rarely interact with staff members.  Invite interns to staff meetings so they can learn about your office goals, different projects that are ongoing, and some of your recent accomplishments.
• Make interns a part of your team-building activities, which helps them develop rapport with staff members.  Whether it’s joining staff on an off-site retreat or attending an educational webinar, these activities lend themselves to building a cohesive working relationship between staff and intern workforces.
• Have interns give a presentation to the office after they complete an assignment so that staff can have a better appreciation for what the interns are working on and the value they represent.
• Provide as many educational opportunities as possible to the interns. 

At Moffitt, the interns are offered the ability to attend the Investor Forum at Business of Biotech, which is an annual conference hosted by Moffitt Cancer Center. As part of the conference, Moffitt faculty start-ups present to investors, and interns are given the opportunity to observe those investor presentations. 

At UIL, interns have a chance to be selected for an AUTM student membership courtesy of the TTO.

• Make sure that get the chance to shadow staff members. This is extremely valuable to the interns, because they get to observe interactions with faculty as well as prospective licensees.
• If one of your technology sectors is building momentum from non-traditional sources, use an intern to test the waters! For example, UIL has hired an intern specifically to handle mobile app commercialization.

All in all, interns provide a tremendous value to the commercialization team because they are hungry and willing to put in the time. Both Moffitt and UIL have kept tabs on where their interns have landed professionally – some have become patent and corporate counsel, some of them have gone into start-up companies, some are in market research and some are in business development. Regardless of where your interns end up, their TTO experience will stay with them throughout their careers.

For more in-depth details regarding the University of Illinois at Urbana-Champaign and Moffitt Cancer Center’s intern programs, please CLICK HERE to order the archived webinar, Beyond Internships: Creating a Student-Based Workforce in Your TTO, which is available on DVD, On-Demand Video and PDF Transcript. This distance learning program covers each program’s recruitment and application processes, procedural details, and mentoring and coaching tips.

We thank Lesley Millar from the University of Illinois at Urbana-Champaign, and Jarett Rieger Esq., MBA, from Moffitt Cancer Center for their valuable insight. 

If you haven’t paid much attention to the Delaware Supreme Court  decision in SIGA Technologies v. PharmAthene, Inc., No. 314, 2012 2013 Del. LEXIS 265, 1-2 (Del. May 24, 2013), it’s time to get familiar with the frightening case – BEFORE you sign your next term sheet.

Here’s the background story: SIGA Technologies, Inc. developed the smallpox antiviral drug Arestvyr™ (ST-246) and needed more funding to continue the project. The company reached out to a competitor in the space, Pharmathene, for the money. The parties decided to structure the deal through a license agreement, and they agreed to the particulars in a non-binding term sheet. Then, some months later, it was decided Pharmathene would acquire SIGA.  The merger agreement stated that if the merger fell through, the Parties agreed to negotiate in good faith a license in accordance with the term sheet they had previously agreed upon.

However, before the merger closed, SIGA received a large grant to further develop ST-246 and no longer wanted to be acquired by Pharmathene. This led the parties back to the negotiating table — but SIGA proposed much higher economic terms than the ones in the original term sheet, and the parties reached an impasse.

Then, things got ugly.

Pharmathene sued SIGA in Delaware trial court for failure to negotiate in good faith in accordance with the original “non-binding” agreement. And won! 

So how does this decision affect your TTO? Take a look at your current “non-binding” agreements. Are you sure that the same situation won’t repeat itself in your own organization? What should you do when similar fact patterns occur in your licensing negotiations?

• Clarify intentions and expectations upfront
• Determine if you’re willing to renegotiate “already agreed upon terms” to get the deal done

Here are some additional steps to take to ensure non-binding agreements stay non-binding, in light of the court decision:

• Additional care should be taken in drafting term sheets or preliminary documents  (options, letter agreements, MOUs)
• Don’t agree to a term sheet unless it is explicitly non-binding or you are prepared to continue negotiations in good faith, consistent with the term sheet.  Even when the term sheet states that it is “Non Binding” — as was true of the term sheet in Siga Technologies — incorporating that term sheet into a later agreement may create a binding obligation.
• Appropriate disclaimer language should be included.  For example:
  • “The parties intend material terms to be merely preliminary in nature”
  • “such terms merely represent our present understanding with respect to the intended transaction described herein, and is not binding upon and creates no rights, express or implied in favor of any party”

Special thanks to Emily Williams, a licensing associate at Johns Hopkins University Technology Transfer Office focusing on the physical sciences portfolio.  She presented a webinar for Technology Transfer Tactics and we captured every word and dozens more practical strategies. This program is currently available on DVD, On-Demand video and PDF Transcript. For more information and to order, CLICK HERE. 

Patent prosecution costs are at the very top of every TTO’s expense list – and that means your office has a big opportunity to reduce costs and make a major budget impact in 2014.

But before you go and reduce the number of patent applications your office files, read below for an excerpt from our recent webinar: How University TTOs Can Slash Patent Expenses While Improving Patent Quality (for details on ordering this full recorded session, CLICK HERE.)

1). Establish and memorialize relationship expectations between the TTO and outside counsel. 

This can be accomplished by engagement letters that are executed by an individual with signature authority in the TTO, and outside counsel.  Even though the engagement letter may go to the account manager, we can also ask for a particular attorney in that law firm to be working on the project.  The engagement letter contemplates key aspects of the relationship for a specific technology or portfolio of technologies.  It also specifically identifies the scope of work to be performed: for example, preparing a patent application or performing a patentability opinion. 

The engagement letter fully describes the cost structure: for example, a fixed-fee cost for the scope of work, a blended billing rate between all the attorneys that touch the work, or a combination of fixed-fee and blended rate.  Next, it will include a calendar of events, such as delivery of a full set of claims, delivery of figures, delivery of the first draft, delivery of the second draft, etc., to allow time for the inventors and the TTO to ensure sufficient coverage, quality, and that the application is actually on-point.  It may also include legal guidelines provided in an appendix or schedule and may include pricing expectations for various follow-on legal work involved with the prosecution.  Examples include preparation in filing of IBSs; preparation in filing of office action responses, including interview with examiners; appeal briefs; pre-appeal requests for review briefs; filing of continuation applications; filing of nationalization applications.  The engagement letter may also include invoicing instructions and expectations of when invoices should be provided to the TTO.  Internally, a TTO may wish to develop provisions to monitor the invoices and compare the invoices with the guidelines as well as provisions for departure from the guidelines in specialized circumstances. The clarity of engagement letters serve to relieve cost pressures placed on the outside counsel.

2). Establish a common customer number (CCN)

The CCN is used between the technology transfer office, the firm of the outside counsel and the USPTO.  Once the common customer number has been established, all the legacy cases that are residing at that firm can be transferred to that common customer number, as well as all the new cases that are filed in that firm under that new common customer number. 

The TTO can then set up a system to utilize the CCN by receiving alerts from the USPTO at the same time as the law firm that a new communication is available.  This allows a TTO to send a new communication to the inventors to begin the analysis as soon as it becomes available.  This type of system really helps in situations where there is a time sensitive office action provided by the TTO: for example, if you have to give a response to a restriction requirement, but you only have a one-month timeframe to respond, the CCN can allow the TTO to provide meaningful comments from the inventors to the outside counsel by elongating the time that inventors have in reviewing the communications from the patent office.  In addition to that, setting up the CCN can result in a significant reduction in petitions for extension of time, which can result in cost saving, as well as term of any patents that result from the applications. 

3). Obtain written patentability opinion prior to filing the patent application

The written patentability opinion will include closest prior art, and it will include a rationale as to why the technology is still patentable in view of that prior art.  I suggest a different firm prepare the written patentability opinion than the firm that actually prepares the application.  While the cost of preparing the patentability opinion seems to be additive to the cost of preparing the application, it can actually reduce the cost in the long run by either informing the TTO to not even file the application in the first place, or to provide information to the law firm that is going to be preparing the application of the closest prior art available in the particular field.That way, the application is not drafted blindly. 

4). Review invoices against legal fees

This step may require grouping invoices for a particular activity, which can be accomplished internally at the TTO, or can be accomplished by asking the law firm to group those activities and report a particular group of activities all at once.  This will allow the TTO to compare the invoices against the pricing guidelines, and make sure that the TTO stays on budget for that particular project.

5). Analyze the office actions in-house prior to any analysis by the outside counsel. 

Many times the outside counsel provides a very well written description of the office action and a theory of how we can overcome that office action rejection.  But by that time, the TTO may have already decided to completely cancel that project.  If analysis is done internally, that can preempt that analysis by the outside counsel, which can result in the reduction of legal fees that would otherwise be wasted.  Next, establish a patent tree chart for portfolios to avoid duplication of claim scope.  In many cases where there are large patent portfolios, it becomes very difficult to determine which application claims what subject matter, and without a tree structure, it becomes very difficult to manage that portfolio.  Establishing such a tree structure will avoid unnecessary duplication.

Other strategies that can make a big dent in the patent costs include preparation and recording of assignment in-house using templates for various situations, including, for example, single or multiple inventors, patent assignments versus copyright assignments versus trademark assignments.  Preparing those assignments and having the assignments executed by the inventors in-house and recording those can result in a significant cost reduction overall.

Special thanks to Hamid R. Piroozi, JD, an experienced patent attorney who now serves as the associate director in charge of legal affairs for Purdue’s Office of Technology Commercialization for sharing all of his real-world lessons with our live audience. We captured every word and dozens more practical strategies so you can also benefit from his experience. This program is available on DVD, On-Demand video, and PDF Transcript and can be ordered by CLICKING HERE.