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Development of intellectual property

When most people think about intellectual property, they imagine startup businesses and active capitalistic goals. While that is certainly one way of developing intellectual property, there are others. Regardless of your goals for disseminating and distributing your intellectual property (IP), the Office of Research Services (ORS)  can help.

Non-commercial distribution of intellectual property

Even if you want to give your intellectual property away, we can advise on approaches to ensure no one else tries to sell it, such as through the use of a creative commons license. We can also craft user agreements to protect the creators and the university from liability. We can also:

  • Suggest partnership routes.
  • Make introductions.
  • Help secure funding for disseminating research results, such as through a community-based organization.
  • Facilitate the creation of a social enterprise.

Commercial exploitation of intellectual property

The ORS manages major commercialization paths, such as the licensing of technologies and the creation of spinoff companies. The choice between the two is usually fairly clear, but is based on a complex set of factors, including the:

  • nature of the technology
  • industry
  • market

A brief description of each of these factors will be given here, but it should be emphasized that the commercialization strategy is decided on an individual basis for each technology.

The nature of the technology is characterized by whether it is a platform technology (i.e., Can a series of products be created from it?), or a single product. Is it an incremental improvement on an existing product (e.g., a lighter, stronger golf club) or something new (e.g., an alternative locating device than a GPS)? How far from commercialization is it? How much investment will be required to get it to the market? How much risk is there that the technology will become a product (could it fail in commercial trials or is there a high degree of certainty that it will scale up)?

The industry a technology will be sold in will have a number of characteristics to help determine whether the commercialization path is best suited to licensing or the creation of a spinoff. Questions to consider include:

  • How many companies are in the industry?
  • How difficult is it to enter that industry (software is easy, aircraft manufacturing is hard)? 
  • Is it new or old?

The market is also important. How do people buy the product? Does it require specialized sales people, like pharmaceuticals, or do people pick it up off the shelf, like kitchen utensils? Is an elaborate marketing campaign required, or will buyers buy simply because it is cheaper?

Based on the answers to the questions above, a commercialization strategy will involve either licensing (see below) or the creation of a spinoff company.

Licensing

Academic creators of intellectual property at UOIT have the option of offering their intellectual property to the university for commercialization (described in the IP policy).

If IP is offered to the university, the ORS will investigate the commercial potential of the technology, which has nothing to do with the value of the research. If sufficient commercial potential is found, the ORS will offer to take assignment of the technology and then bear the costs of development, such as patenting and marketing studies. The ORS will also market the intellectual property to potential licensees.

Successful licensing should bring revenues back to the creators of the intellectual property. It is worth noting that statistically (based on stats from across North American universities), only about 25 per cent of inventions disclosed to the technology transfer office result in licenses. Licensees may also want to engage in ongoing collaborative research with the creators to further develop the technology or develop new generations of the technology.

Assigning your technology to the university means you are transferring ownership. It requires you to make a statement that you own the rights. It is important to have all of the creators represented in such a statement, so that no one emerges at a late date to make claims to the intellectual property. It is also important to acknowledge any third-party contributions, such as open-source software. Depending on the application, there may be terms that prohibit its sale in a commercial product.

What can you, as the creator, expect from being involved in a licensing deal?

You may need to be involved in meetings to answer technical questions about the technology. If a patent is filed on the technology, there is a variable amount of defence of the patent application required when the patent office examines similar patents. You will share in revenues from the license, after the costs of patenting and other development expenses are recovered by the university. You also retain your right to use the technology for academic purposes but are obliged to inform the university of further developments or improvements to the technology.

The license agreement is between the university and the company who licenses the technology. It contains terms that specify:

  • Exactly what is being licensed.
  • What the company can use the technology for.
  • Levels of insurance and sales that must be maintained.
  • Stipulations of who is going to do what in the event of legal actions.

It may take months to negotiate a legal agreement, even after the initial terms are set. A process of negotiation occurs, going back and forth between the company's lawyers and executives and the ORS. While this takes time, it should not require any input from the inventor.

Spinoffs

The terms spinoff or startup company do not have any formal legal meaning; even their meaning in business terms is vague.

  • A spinoff company implies it was created by taking some assets (in the university’s case, intellectual property) and putting them into a distinct entity (a small company) for the originator.
  • The term startup is fairly straight forward, as it indicates a new entity; university spinoffs are created with intellectual property owned by the university, which has generally been assigned to it by faculty and students.

Since faculty members own the intellectual property they create in the course of their research, they may also start companies based on the outcomes of their research, acting independently of the university. In addition, companies may be started by UOIT faculty or students based on products or concepts that are completely independent of any UOIT research programs.

Regardless of how the company is founded, the ORS can offer some resources and advice to help start the business or connect the entrepreneurs with those who can provide legal advice, business development advice, market research resources, facilities, inventors, pitch programs and other tools to help build the business.

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