technology resource of the southeast, inc. technology bundling & clustering may 17, 2007

Technology Resourceof the Southeast, Inc.

Technology Bundling & Clustering

May 17, 2007

Is there really a buried treasure?

• Who has the map?• Is it real?• How do I get to it?• What does it cost• Is it worth it?

Why bundle technologies?

• Wealth of “unused”technologies from large & small business, Universities, Government Laboratories and trade associations

• Expand revenue potential – broaden product lines• Promote Economic Development – Business

expansion, start-ups and joint ventures

What purpose does it serve?

Answers to a common business problems • Increase sales• Develop new markets• Develop and dominate new areas of core expertise

Examples of projects based on recent events

• Washington Post Story – “Rice Industry troubled by genetic contamination”

• Barbaro – winner of the 2006 Kentucky Derby, euthanised because of a hoof infection

• Kaufman Report – Changes needed in tech transfer methods to create more opportunities

What does a technology bundle look like?

Genetic Engineering (In development)• 1 issued Patent• 3 Patent Applications• 2 Applications being written• Collaborative Research Agreements• Pre-agreed terms for splitting royalties/income• 2 Cross-Licensing Agreements

What does a technology bundle look like?

Laminitis/Hoof Injury ( In operation)• 3 Patent applications• 2 design patents• 2 Trademarks• 2 Cooperative research agreements• Pre-agreed terms on royalties/income • Expanding uses to include drug delivery systems• In-Licensing of synergistic product concepts (4)

What Does a technology bundle look like?

Kaufman Recommendations (In formation)• Assistive Technology start-up based on

cooperation of Universities and commercial enterprises targeting the “boomer generation”

• In-license of 5 Patents• 2 Joint Development agreements • Pre-agreed royalty/income distributions

What do these potential projects have in common?

• Available technologies from Universities• Available technologies from Private Industry• Available technology from trade association

members• Potential for collaborations to form successful

business expansion, partnerships or spin-offs

What is the value proposition?

• Models are developed that make sense from a business plan perspective. This makes them attractive to investors and/or industry partners

• Individual IP valuations are very low when valued as single items

• Combined IP provides an exponential valuation potential

• IP is searched and screened on basis of synergy

One solution

• Bundle one-off solutions from University and Bundle one-off solutions from University and Government Labs into technology clusters large Government Labs into technology clusters large enough to attract start-up capital & managementenough to attract start-up capital & management

• Identify commercial concerns and public agencies Identify commercial concerns and public agencies willing to cooperate with the bundling conceptwilling to cooperate with the bundling concept

• Encourage corporate sponsorships and donations Encourage corporate sponsorships and donations in kind to the pool of available technologiesin kind to the pool of available technologies

Hurdles to overcome & potential solutions

• Agreement to work together is the primary issue• Revenue distribution is the number one challenge• Independent, third party objective evaluation and

valuation provides the threshold for agreements• As a technology is located and identified as a

component, terms of the agreement are then approved and become consistent between all parties based on the independent assessment and value of each individual component

What will the evaluation process look like?

• Verification of all pertinent facts• Patent Hierarchy Analysis• Technical, Market and Competitive Assessment

of the Technology• Full Valuation Analysis using “Triangulation”

Methodology• Valuation and Financial Modeling to build a

framework for negotiation issues

Basic Triangulation Methodology

• Used for analysis based on a technology value.

• If B approximates C and C approximates B, and if A compliments B, then C must compliment A and thus confirms the Technology Value.

Technology Value• The Technology

Triangle within a triangulation model

• Each component compliments and verifies each other component– A approximates B– B approximates C– C approximates A

One final reason to bundle

Why doesn’t everyone bundle ?

• It takes a lot of time to conduct a proper search• Not all identified target owners will be willing

partners• All technologies must be clean and Patentable• Foreign rights must be in a preserved state• All agreements must be “exclusive licenses”

Presenter

Richard W. Sheehan, President Technology Resource, Johnson City, TN

(423) 929-0380RSheehan@technologyresourceSE.com