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Transcript of IP Strategy and Open Innovation Policy updated
IP Strategy & Open Innovation PolicyInnovation & Entrepreneurship in Universities
Bill PontikakisBill Pontikakis © 2013
The Modern University Ecosystem
Bill Pontikakis © 2013
New Startups
Industry Innovation
Projects
University Ecosystem as
Leader in Innovation and
Entrepreneurship
Top World Innovation Ecosystems [1]
Bill Pontikakis © 2013
Traditional IP Strategy [2]
Bill Pontikakis © 2013
Control and exploit your IP
Limited Impact, Shortsighted Decisions
Driver of Revenues (free cash flow)
The “Medusa Effect” [3]
Bill Pontikakis © 2013
• Excessive patenting
• Overly stringent IP policies
• Prohibiting communication between company researchers and those outside
Procter & Gamble
• Use 10% of their patents
• Pay millions in annual renewal fees for remaining 90%
Procter & Gamble
• Unused IP can create patent thickets that inhibit potential collaborations
Economic Consequences [3]
Bill Pontikakis © 2013
Opportunities for 2nd
generation innovations
are lost due to lack of
collaboration with 3rd parties.
60% of the
patent holders receive
1% of the revenue
40% of ALL U.S.
patents receive 99% of patent-
licensing revenue
Traditional Approach to IPConsequences to Education Ecosystems
Bill Pontikakis © 2013
University IP
Ownership
A major barrier to
collaboration with Industry
Rolls Royce
Takes 18 months to negotiate a
research collaboration agreement
with a University
partner
Rolls Royce
Due to the delays the company is considering whether to
terminate its network of
research centers
The 10 Most Successful, in License Income, U.S. Universities
1.40.5 0.4 0.4 0.4
1.0 1.50.8 0.4 0.4
15.012.2
9.3
6.0
4.8
3.8
2.73.5
2.11.4
Licensing Income ($ Billions) Research Expenditure ($ Billions)
33.4
Bill Pontikakis © 2013
Less than 5% Annual ROI from IP Licenses
NYU
Wake
Fore
st
Northweste
rnEmory
Florid
a State
U of Florid
a
U of Minneso
ta MIT
U of Califo
rnia
U of Wash
ington
4.3
3.4
1.91.7
1.4
0.70.5
0.3 0.3 0.3
Annual Average % Return
Bill Pontikakis © 2013
Canadian Universities The Trend is Worse
…and it Doesn’t Improve Over Time
IP Revenues Earned by U.S. and Canadian Universities 1991-2008 [5]
Bill Pontikakis © 2013
The New PhilosophyOpen Innovation (ΟΙ) Policy [6]
Bill Pontikakis © 2013
Opportunity
The “one-size-fits-all”
approach to IP is generally unhelpful
Open Innovation
The company’s use of internal as
well as external ideas,
and internal and external
paths to market, as it
looks to advance its technology
Goal
To create an ecosystem
around your IP or “a system of value” to
multiple parties
Closed Innovation (CI) vs. Open Innovation (OI) [7]
Bill Pontikakis © 2013
IP as a Disabler or Enabler of Open Innovation [3]
Bill Pontikakis © 2013
How to Create Value withOpen Innovation (OI)
Bill Pontikakis © 2013
Idea
Create an Innovation Ecosystem. Within the ecosystem
grant access to large
portion of your IP basis
Goal
Parties within the ecosystem
will use the open
technology as a basis for their own
products and services
Outcome
The 3rd parties will increase
the total value of the
ecosystem through the creation of
complimentary products
and services
How to Create Value with OIIBM – Eclipse Project
Bill Pontikakis © 2013
Action
IBM in 2001 released to
public its Eclipse
project, a developer tool
worth some $40 million at
that time
Strategy
To replace competitor software-
development products with
a standard framework into which
might better integrate its
Rational software
product line
Outcome
Eclipse is now one of the
world’s most widely used
software development tools, actively supported by almost all the major players
in the software industry
How to Create Value with OIGlaxoSmithKline Pharma [3]
Bill Pontikakis © 2013
• GlaxoSmithKline Created a “patent pool” of 800 granted or pending patents
• Researchers can license freely in order to develop and produce new products and formulations
Objective
• To generate public goodwill for corporation
Objective
• To Create a network of potential collaborators with whom the corporation can license IP for profit
How to Create Value with OIUniversity of Glasgow - Easy Access IP [8]
Bill Pontikakis © 2013
IP and granting rights are
provided free in a standard legal
page legal agreement
A preliminary piece of IP can
add to the portfolio of a
young company and help it attract
investment
Most of the 25 licenses executed under Easy Access
IP terms have been with SMEs which are known to find it difficult to interact with
universities
How to Create Value with OIUniversity of Manitoba – IP Ownership [8]
Bill Pontikakis © 2013
• Partners Gain automatic ownership of IP arising from collaborations
• Royalties on resulting products only after a patent starts generating revenues for the industrial partner
Objective
• Contribute to the local economy
Objective
• Increase the funding of research programs through the industrial collaborations
How to Create Value with OIUC BERKELEY – Industrial Alliance Office [9]
Bill Pontikakis © 2013
• OTL is a “push” effort, pushing out University patents for licensing in industry
Existing office, Office of Technology Licensing (OTL) focuses on the
licensing of University owned patents
• IAO is a “pull” effort, trying to bring the private sector to the University
New Office of Industry Alliances Office (IAO)
was created to enhance collaborations
How to Create Value with OIUC BERKELEY – Collaborations [9]
Bill Pontikakis © 2013
Open Collaborat
ions
Results publicly available to everyone
Consortia
Participating firms having preferential access to data and
IP
Sponsored Research Projects
Managed quite selectively, with only one industry partner
How to Create Value with OIUC BERKELEY – Collaborations [9]
Bill Pontikakis © 2013
How to Create Value with OIUC BERKELEY – Benefits of OI [9]
Bill Pontikakis © 2013
OTL IAO
600 Collaboration
Partners
$70M / year (Grants + Outside
Funding)
$10M / year (Patent
Licensing)
Suggestions on Open Innovation
Bill Pontikakis © 2013
• Create Intermediate Organizational Structures within the boundaries of Innovation Hubs
• Foster an Open Innovation culture with shared resources
Large Corporations
• Create Intermediate Organizational Structures within University boundaries.
• Open up underperforming IP portfolio
Academia
Bill Pontikakis © 2013
Most Vibrant University Ecosystems Foster Collaboration
Collaboration leads to Innovation
Students, faculty, and industry don’t just “consume” University products
Also they volunteer their services and donate money to help innovate with and alongside the University [2]
Benefits of Open Innovation Adoption
Bill Pontikakis © 2013
Build a regional economic prosperity in the society, not just institutional advantage to the university [2]
The new IP policy will provide mechanisms that create:
New partnerships of interactionMarket knowledgeIncentives that motivate new entrepreneurship
Open IP Strategy – Value Creation
Bill Pontikakis © 2013
Brand Value
Third Parties Use Your IP
Raises University
Profile
Attract High Quality
Faculty & Students
Increase in Grants &
Corporate Donations
Open IP Strategy – Value Creation
Bill Pontikakis © 2013
Will increase revenues from
tuition, research grants, alumni donations [2]
Might decrease revenues from
licensing
Innovation and Incubation Centers Recommendations for their IP Policy
Bill Pontikakis © 2013
Release any IP that has not generated any licensing income for the last 3 years to the incubation center
Any new IP should have the same grace period of at least 3 years, after which, if it has not generated any income, it should be released to the Incubation Center
The Incubation Center will use that IP as a leverage to attract collaboration with SMEs or to assist new startups with fund raising
Any new IP generated from the collaboration, if successfully commercialized, can generate income for the University (from licensing fees or any other form of monetization)
Open IP Strategy – Spur Innovation & Entrepreneurship
Bill Pontikakis © 2013
Spur Innovation & Entrepreneurship
The University will be at the center of the new innovative Ecosystem
The University will be a key contributor in putting their city on the map of the top world innovative ecosystems
References
Bill Pontikakis © 2013
[8] Nature Biotechnology, “No-fee university licenses spur biotech partnerships”, vol. 31, no. 5, p. 376, May 2013
[7] F. Wippich, “Leadership in Open Innovation: Examining the Influences of Open Innovation on Competencies, Control, and Behavior in R&D Environments”, Open Innovation in Firms and Public Administrations, pp. 97-125, IGI Global, 2012
[6] Henry Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology, Harvard Business School Press, 2003
[1] Cornell University, INSEAD, WIPO, “The Global Innovation Index 2013: The Local Dynamics of Innovation, 2013
[9] Henry Chesbrough, Principal Investigator, “Open Innovation: Implications for Japanese Innovation, Report to NEDO, March 2013
[5] CIC, Rights and Rents, Why Canada must harness its intellectual property resources, 2011
[4] The Kauffman Task Force on Law, Innovation, and Growth, “Rules for Growth: Promoting Innovation and Growth Through Legal Reform”, Ewing Marion Kauffman Foundation, 2011
[3] O. Alexy, P. Criscuolo, A. Salter, “Does IP Strategy Have to Cripple Open Innovation?”, MIT Sloan Management Review, vol. 51, no.1, Fall 2009
[2] John Palfrey, “Intellectual Property Strategy”, The MIT Press, 2011