William Rosenberg, Ph.D.Executive DirectorUMass President’s OfficeOctober 23, 2012Baku, Azerbaijan

Characterization of Early Stage Technology from Academic Institutions

General licensing concepts The UMass’s example of a technology licensing office

Considerations on New Company Formation

4284 Licenses; 1078 Options Total income $2 Billion Created 651 New Start-ups of which 498 in same state as academic institution

658 New products into marketplace OTL Staff 2106 FTE

* Association of University Technology Managers

Discovery is result of years of Government research funding

In US, Bayh Dole Act permits assignment to institutions

Typically technology is very early stage & high risk

Can be very innovative, breakthrough, paradigm shift

Requires additional development investment by licensee (research too)

Tech Transfer & success often bound up with the motivation of the principal investigator

Academic licensing offices vary greatly in experience/orientation

Typically license is for patent rights at provisional or pending stages (US-no trade secrets/know how)

Licensee does not have rights to future improvements

Participation of investigator limited by conflict rules Little commercial strategy or validation provided by

University No warrantees

Access to world class researchers Inventions often the result of years of

Federal funding Economical, practical way to add to

research pipeline Licenses are typically reasonable and

significant payments only in the event of success

To be competitive, is there really a choice?

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Professional management of the University’s intellectual property

Generate financial support and continuity through commercializing University’s inventions

Ensure compliance with Federal (Bayh Dole Act) & State laws and UMass policies

Support University’s economic development

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President’s Office◦ Executive Director

Oversight for IP matters for 5 campuses, ◦ MTTC Director (plus 2 professionals)

Facilitates Tech Transfer for all MA research institutions

Campus Office locations & resources◦ Amherst (4 licensing professionals) ◦ Boston and Dartmouth (2 licensing professional)◦ Lowell (4 licensing professionals)◦ Worcester (6 licensing professionals)

Office of General Counsel ◦ 2 Associate General Counsels supporting CVIP

Manage IPLicense University technologies Development of industry partnerships New company formation Manage 2 Gap funds Support to University on entrepreneurial activities

CVIP

Intellectual Property (IP) Policy Policy on Conflicts of Interest Relating to

IP and Commercial Ventures Policy on Faculty Consulting and Outside

Activities

CVIP

Reflectance Medical, Dartmouth Medical-electrical, medical devices Anellotech, Qteros -unique processesOWL, Texifter -Software,algorithmsMedImmune, Geckskin, Boston Scientific, Rxi - new compositions of matter Metabolix, Scidose, Sunovian- New uses of materials and significant improvements

CVIP

Receipt of Invention Disclosures from faculty

Discuss with investigator Case managers assess commercial

potential and technical/scientific uniqueness, breadth

Present at Case Manager Meeting

CVIP

Triage IP, Protection-Patent, Copyright Market technologies to potential licensees Case managers negotiate and close

agreements Prepare with General Counsel and execute

licenses Manage relationships and legal challenges

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Use of Non confidential invention summaries

Inventors are often the best source of leads Public disclosure Networking - meetings and conferences Market research Websites (ours and 3rd party services) Cold calls

Confidential Disclosure Agreements Material Transfer Agreement Inter-institutional patent management

agreement (IIA) Term Sheet Option Agreement Exclusive or Non exclusive license

agreement

Exclusive or non-exclusive Defined Field License Fees (range from $5K to $XM) Equity 5-10% (if new company formation) Royalty (range from 1% to 6%) Sublicense income (10-30%) Patent expense reimbursement (if

exclusive) Milestones/Due Diligence (if exclusive) Indemnification/No warrantees Board visitation (if new company

formation)

•Over 400 licenses to companies (pharma, biotechs, med device, clean tech, IT, materials)•UMass among the top US academic institutions

Best way to commercialize certain technologies- too early to license

Commercialization planning and efforts beyond university resources

Big companies won’t bite New company affords opportunity to

capture “real” value Economic development reasons (jobs, taxes

etc.)-startups usually remain local Alignment of interests (institution, PIs.

entrepreneur, funders)

“The research also showed that successful entrepreneurial output requires more than a proficient technology transfer office with effective policies and a strong incentive system,” said Robert Strom, director of Research and Policy at the Kauffman Foundation. “It also relies on an overall university ecosystem that helps to reduce the venture’s market and technological risk by providing programs and resources that give students and faculty freedom – and time – to develop strategic lab-to-market plans.”

Independent of their technology transfer offices, many of the eight universities studied have implemented mentoring programs, business plan competitions, accelerator programs, entrepreneurship training for students and faculty, and project-based classes that bring together interdisciplinary or MBA student teams to work on business plans and create roadmaps for commercialization. According to the study, these programs and practices have enhanced entrepreneurial efforts and allowed the universities to serve as business incubators.

Investment Funds Programs including entrepreneurship

training, company mentoring, showcase events, grant programs, investor network

Active VC alumni support UMass incubators with support Extensive network in MA business

community

Lab Market

Programs (MTTC & CVIP)Programs (MTTC & CVIP)

FundingFundingUMass Startup UMass Startup

InitiativeInitiative$5K$5K

Proof of Concept Venture Formation A - Round

Tech. Development

Fund$25 – 30K

Co-Investment

Fund$500K

• Invention to Venture Boot Camp

• Platform Program • Technology Showcase• New Venture Mentoring

Seed FundSeed Fund$75 - $250K$75 - $250K

CVIP Technology Development Fund-$30K per award to investigator for proof of principle-9years, good results

UMass Startup Initiative $5K for preparation of business plans;

new CVIP Co-Investment Equity Fund

$500K per company: New Seed Fund Planning stage -$250K per

company at earliest stages

Professional licensing staff (about 15 people)

Dedicated University attorneys (2) experienced with startup and equity issues

MTTC programs (Platform, Conferences, Networking events, Bootcamps)

Venture Creation specialist focused on the startup pipeline at all stages

UMass incubators Support of senior University management

Identification of promising technology Use of university POP or other gap funds to

advance development Preliminary technology and market

assessment Assessment of faculty/grad student interest Determination of startup models available

(use of internal /external resources ) Identification of entrepreneurial team and

due diligence on them

Option technology for technology & business assessment and planning

Validation of newco’s commercialization strategy Assist with networking, resource sourcing,

mentoring and coaching Use license to memorialize strategy and

commitments Invest?? Continuing roles such as board advisor

Management team formation, development and funding responsibility

University provides no warrantees University typically controls patent prosecution Exclusive licenses require due diligence

milestones by licensee -termination if not met University faculty can serve on SAB or conduct

further research (usually) but not officer of company

Qteros-microbial production of chemicals-$30M Dartmouth Med Research-polymers for bone

replacement-$1M Anellotech-catalytic conversion of biomass-

$20M Anterios-nanotech based delivery system-$10M Konarka- cleantech-$160M Reflectance Medical- non-invasive monitoring

system-$10M SBIR Texifter-sorting of large amounts of

unstructured texts-grants, organic growth Sevo Neutraceuticals-memory enhancement -

$250K Therapeutic Systems-pressure vest for

autistic children, $500K plus grants

William Rosenberg, Ph.D. Executive Director Commercial Venture and Intellectual

Property UMass President’s Office Tel 617 287 7044 Email- wrosenberg@umassp.edu