What is commercialization?
Commercialization is the process of taking a licensed technology and converting it into a marketable product. The product is licensed in consideration for royalties paid to the inventor, the inventor’s research program, and the university.
How long does the technology commercialization process take?
The process of protecting the technology and finding the right licensing partner may take months - or even years - to complete. The amount of time will depend on the development stage of the technology, participation by the inventing faculty, competing technologies, the amount of work needed to bring a new concept to market ready status and the resources and acceptance of potential licensees.
What activities occur during commercialization after my technology has been licensed?
Most licensees continue to develop an invention to enhance the technology, reduce risk, prove reliability, and satisfy the market requirements for adoption by customers. This can involve additional testing, prototyping for manufacturability, durability and integrity, and further development to improve performance and other characteristics. Documentation for training, installation and marketing is often created during this phase. Benchmarking tests are often required to demonstrate the product or service advantages and to position the product in the market.
What is my role during commercialization?
The inventor is in the best position to understand the breadth of the industry interested in the invention. The inventor is the single most important source of potential licensees. Seventy-five percent of licenses intiated from first contact by the inventor (University of Akron TTO, 2010). Your role is clearly to use your knowledge of the field and industry contacts to give your invention the best chance of being licensed.
What revenues are generated for the University if commercialization is successful?
Most licenses have licensing fees that can be very modest (for start-ups or situations in which the value of the license is deemed to warrant models license fees) or can reach hundreds of thousands of dollars. Royalties on the eventual sales of licensed products can generate similar or greater revenues, although this can take years to occur, Equity, if included in a license, can yield similar returns, but only if a successful equity liquidation event (public equity offering or a sale of the company) occurs. Most licenses do not yield substantial revenues. A recent study of licenses at U.S. universities demonstrated that only 1% of all licenses yield over $1 million. However, the rewards of an invention reaching the market are often more significant than the financial considerations.
Utliziing your invention to its fullest potential can generate revenue for the inventor, his/hers research programs, and the university.
What will happen to my invention if the Start-up Company or licensee is unsuccessful? Can the invention be licensed to another entity?
Licenses typically include performance milestones that, if unmet, can result in termination. This allows for subsequent licensing to another business. However, time delays and other considerations can hinder this re-licensing.