3rd Technology Commercialization Program

by

Hams A. Madanat Talal Abu-Ghazaleh Organization

©2007

How to build a Successful How to build a Successful Commercialization Strategy Commercialization Strategy

presented inpresented in

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Introduction

“Innovation is 1% inspiration and 99% perspiration”

Tomas Edison

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Definition

• What is commercialization of Inventions?

Commercialization of inventions is a technical term describing the process of extracting financial value from a new invention or innovative idea through turning it into a commercial tradable and profit-generating product.

Commercialization can be made through the inventor himself or though selling or licensing the right to an investor who will, in turn, do the commercialization.

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Methods of Commercialization

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Weighing up your commercialization models should be made in light of:

• Your overall objective• Your financial position• Available skills and resources• Nature of technology• Strength of competition • Range of possible use of the technology

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What can be Commercialized?

• Conceptual ideas

• Under developed inventions

• Developed inventions – Innovations

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Commercialization Pre-requisites

• Industrial applicability• Technical Validity• Market Viability• Patentability• Feasibility

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Commercialization Process

1. Convince and develop an idea

2. Build a prototype

3. Carry out an initial assessment

4. Patent the invention

5. Check “Freedom to Operate”

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Commercialization Process (Cont’d)

6. Evaluate (cont.):

A. Market Potential

B. Technical Evaluation

C. Financial Valuation( IP Valuation)• Cost Approach• Income Approach• Market Value Approach• Other Criteria

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Commercialization Process /Financial Valuation (Cont’d)

Financial Valuation

1. Cost Approach• How much did or will developing the invention

will cost?

2. Income Approach• The 25% rule

3. Market Value Approach• Based on supply and demand• Valued by reference to similar transactions

4. Other Criteria

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Commercialization Process (Cont’d)

7. Determine your objectives and goals

8. Decide on the form of commercialization:– Sale – License– Joint Venture– start up ventures (spin offs)

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Commercialization Process (Cont’d)

9. Approach Investors– Marketing Avenues– Invention Exhibitions– Virtual Markets– Online Databases

10. Consider legal aspects of the transaction

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Challenges faced by Inventors

1. Lack of Financial Resources: lack o money to cover: (e.g.)

– Development cost of inventions– Patent fees– Consultant fees

2. Lack of Marketing Channels and skills

3. Lack of Business Knowledge

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Who Can Contribute to the Process?

• Funding Agencies• Invention Incubators • Non-profit Organizations

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Who Can Contribute to the Process? (cont.)

• Venture Capital Companies• Technology Transfer Offices• Technology Brokers and Consultants

– Commission fee based– Retainer fee based

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Maintaining Secrecy

• How much should you disclose? • Sign NDA’s/Confidentiality agreements

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Anatomy of an NDA

• What does an NDA include?

– Identification of parties– Purpose of agreement– Bilateral/ unilateral obligation to maintain secrecy– Duration– Exceptions

• Information in the public domain• Third party acquisition

• Self development- reverse engineering

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Maintaining Secrecy (Cont’d)

• Patented inventions are less vulnerable to infringement– Patent vs. Trade Secrets Protection

• Before an invention is patented its considered a trade secret.

• Consider whether you want to patent your invention or keep it a secret.

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Conclusion

Words of advise:• Be convinced with your invention in order to convince

others• Always do your home work first• Consult experts • Build your relationship on trust

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End of Presentation