Commercialization Workshop Series Commercialization Pathways. April 2, 2015

Commercialization Workshop Series Commercialization Pathways April 2, 2015

Commercialization Workshop Series Commercialization Pathways Commercialization Options Parasight Seikowave Dean Harvey Eric Hauck Matt Bellis Daniel Lau

Commercialization Workshop Series Upcoming Workshops Time/Place TBD April 21 st Funding Opportunities SBIRs/STTRs & State Matching Program State Investment Programs Angel Investors & Venture Capital

Commercialization Pathways Sponsored Research License to Industry Startup Company How do you decide? What s best for the inventor? What s best for UK?

Commercialization Pathways 1 Sponsored research 2 License to industry UK 3 4 License to product startup License to development startup 1 2 Industry Partner M A R K E T Startup 4 3

1 Sponsored Research Benefits Provides funding for UK research Creates early industry partnership Challenges In many cases, hard to find company willing to do Potential conflicts on IP ownership Company usually has first rights to license, potentially limiting commercialization options Example where it is the preferred approach Energy opportunity where industry partner does not have internal research expertise commercialization can only be done by industry funding required is very large and time to market is long heavy regulatory requirements

2 License to Industry Benefits Creates ongoing royalties for life of patent Minimizes UK & inventor resources in commercialization process Challenges Many companies want further along in development before licensing Need to monitor licensee keeps focus on commercialization Doesn t contribute to local/state economic development Example where it is the preferred approach Agriculture opportunity where UK IP has large market opportunity and first office action is positive commercialization can only be done by industry funding required is very large and time to market is long regulatory requirements

3 License to Product Startup Benefits Offers inventor opportunity to participate in bringing product to market, and to own equity Startup controls priorities Contributes to job creation and economic development in Kentucky Challenges Inventor must carefully manage potential conflict of interest with UK responsibilities Finding the right management team is hard Raising money is a continual challenge Example where it is the preferred approach Engineering opportunity where UK IP has large market opportunity SBIR/STTRs and angel funding can bring to market or to next funding stage Time to market is relatively short Strong management team is available with both technical and business experience No regulatory requirements

4 License to Development Startup Benefits Offers inventor opportunity to participate in bringing product to market, and to own equity Increases license value by being further along in commercialization stage Challenges Inventor must carefully manage potential conflict of interest with UK responsibilities Finding the right management team is hard Raising money is a continual challenge Contributes to job creation and economic development in Kentucky Example where it is the preferred approach Medical device opportunity where UK IP has large market opportunity SBIR/STTRs and angel funding can bring to prototype and hopefully early clinical results Time to license to industry player is a few years, and target licensee(s) have been identified Strong management team is available with both technical and business experience Minimal/moderate regulatory requirements

UK Royalty Distribution UK patent expenses royalties equity progress payments licensee after repayment of patent expenses 40% inventors 20% inventors department(s) 20% inventors college(s) 20% UKRF

UK Royalty Distribution Simplified Example after payment of patent expenses UK $5 patent expenses royalties equity progress payments licensee $100 sales 5% royalty $5 $2 $1 $1 $1 after repayment of patent expenses 40% inventors 20% inventors department(s) 20% inventors college(s) 20% UKRF

Startup Distribution Simplified Example UK $5 patent expenses royalties equity progress payments Startup $100 sales $5 $2 $1 $1 $1 after repayment of patent expenses 40% inventors 20% inventors department(s) 20% inventors college(s) 20% UKRF equity? share of profits