Office of Technology Transfer and Economic Development

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Office of Technology Transfer and Economic
Development
University of Hawaii

• January 26, 2006

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Office of Technology Transfer and Economic
Development (OTTED)

• Revenue-oriented service center
• Help UH personnel identify, protect, and
  commercialize their inventions/creations
• Help build UH research enterprise
• Generate licensing income
• Support State economic development initiatives

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UH Business Plan Competition

• OTTED offering up to 20,000 in additional prize
  money
• Recipients must base their business plan on a UH
  technology available for licensing through OTTED
• Recipient(s) must be 1st, 2nd, or 3rd place
  winner(s)
• Money must be used to help commercialize the
  technology
• generally means that winning team becomes a
  licensee
• Award goes to highest placing winner

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Technology Licensing
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Evolution of the relative value of tangible and
intangible assets to total value
100 years ago, tangible assets generally
accounted for 90 of a companys value . . .
90
10
100 years ago
Today
Today, the value of many companies is derived
from their intangible assets.
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University technologies are valuable . . .
. . . and will become more valuable as companies
continue to leverage their RD budgets through
the acquisition of outside technologies
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Stage 1
Technology Transfer Process
TLG activities Solicit, accept, administer
invention disclosures
Invention Disclosure
UH ownership ?
No
Stage 2
Yes
TLG activities Evaluate, market, protect technolog
ies
Legal protection available?
Marketing Protecting
Yes
No
Stage 3
TLG activities Negotiate, formalize, audit license
s
Commercial interest ?
Licensing
Yes
No
Return to inventor
Note This chart is necessarily brief - it
represents only the most basic functions of the
technology transfer process. Please contact the
Technology Licensing Group (539-3817) with
questions or for further information about your
invention and the technology transfer process.
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Licensing as a Business Model

• Licensor Inventor/owner of technology
• Licensee User
• License contract not to sue
• Consideration usually financial
• but may include other consideration, such as
  cross license

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Why license university technologies?

• Technologies early stage, high risk
• Technological risk it may not work
• Market risk unknown demand
• Licensee reduces risk
• Reduces RD expenses
• Proves concept, may provide working model
• Permits end users to kick the tires, lowers
  market uncertainty
• Establishes relationship with University
• Licensor expands income potential
• Reduces/eliminates mfg., mktg., distn costs
• May help identify new income opportunities
• Establishes relationship with company(ies)

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Possible Deal Structures

• Traditional licensing w/fees, royalties
• Equity participation
• Spin-offs/start ups
• Sublicensing
• Options
• Sponsored research agreements
• With/without option to acquire license

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Compensation, Diligence, Patents, and Liability
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Compensation Structures and Alternatives

• Up-front fees
• Royalty arrangements
• Milestone payments
• Patent registration costs
• Liability/indemnification

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Up-front fees

• Good for University
• Reduce Universitys financial risk
• Offset Universitys previous out-of-pocket
  expenses (research costs, patents, etc.)
• Generally not refundable nor creditable against
  future royalties
• BUT
• Increase licensees financial risk
• May reduce licensees research sponsorship
  commitment
• May lock in licensing rights

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Royalty arrangements

• Permits University to share in the success of
  commercialization
• Universitys increasingly willing to be flexible
  in their approach and royalty requirements
• Equity can be exchanged for royalties

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Milestone payments

• Milestones should follow natural development of
  the technology
• Often tied to diligence provisions
• Levels revenue flow to University in early years
• Equity can be exchanged for cash payments.

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Payment of Patent Expenses

• Licensed patent licensee pays
• Business expense
• Cost sharing for multiple licensees
• each licensee pays 1/n of patent expenses
• licensor may limit licensees liability, cap or
  set ngt1

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Liability Issues and Disclaimers

• Licensee takes all the blame and the
  responsibility and the cost
• University takes all the credit and none of
  the responsibility and wants to be paid for
  it

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Liability Issues

• Licensee assumes fitness for use
• Licensee assumes product liability
• and names university as additional insured
• Licensee/university each assumes liability for
  its own employees

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Success Stories and Exemplary Technologies
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Past Business Plan Participants/Winners

• Pipeline Communications and Technology, Inc.
• telecommunications and antenna technologies
• company has 7 employees, is in pre-production
  phase
• Hawaii Environmental BioSolutions
• dairy waste processing
• company has 0 employees, is in start-up phase
• Research Analytical Labs
• diagnose and treat pre-term labor
• status of company unknown

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Examples of UH technologies available for
licensing

• Hydrogen storage materials
• Biodegradable biopolymers
• Hydrogen/oxygen production from water
• Acoustic wave micromixer
• Wastewater treatment with zero valent iron
• Ventilating roofing system

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Contacting OTTED

• Website
• http//www.otted.hawaii.edu
• Email/Phone
• Richard Cox, rcox_at_hawaii.edu, 539-3818
• Gaylene Anderson, gaylenea_at_hawaii.edu, 539-3836
• Lisa Matsunaga, matsunag_at_hawaii.edu, 539-3826
• Ann Park, apark_at_hawaii.edu, 539-3829
• Jonathan Roberts, robertsj_at_hawaii.edu, 539-3828
• Andrea Yuen, ayuen_at_hawaii.edu, 539-3823