Research Universities as Sources of Innovation

1. Research Universities as Sources of Innovation Dr. Bill Gathings Alabama Research Symposium University of South Alabama April 29-30, 2010

2. What is Innovation? • Innovation is not (just) : • Scientific discovery • Technology transfer • Intellectual property management • Business incubation • Innovation is: • The transformation of knowledge into commercial products, processes & services and, as such, extends well beyond science, engineering and technology

3. Successful Innovation • Internal Factors: • Utilization of “best practices” • Clear assessment of customer needs and a high quality product to meet those needs at a competitive price • A product launch strategy focused on customers, not technology • External Factors: • Location within and knowledge of regional business clusters • Full engagement of appropriate research university skills, expertise and technology

4. Michael Porter’s Definition “Innovation is the overarching process of moving an idea or discovery to commercial success, and it underlies growth in productivity and economic prosperity.”

5. The Four Stages of Technology Commercialization 1) Triage IP Validation & Selection Seed Small $ to Prove and Prototype Market Entry A round capital for product development, marketing and sales Expansion B round capital for organizational growth University Technology-focused Business Incubator Freestanding Company Industry 1) Dick Reeves- CEO, Huntsville Angel Network Wonder Blunder Thunder if It’s a good idea Plunder around figuring out what works and what doesn’t into the market the value created

6. External Advisory Council Review UA OTT COMMERCIALIZATION PROCESS Marketing UA Start-up OTT Present to IP Committee Utility/PCT Patent Filed • Develop Business Model (AIME) • Prepare Marketing Materials • Prepare summary report for Advisory Council (OTT) • Select Technology Opportunity • Nationalize Patent Negotiation Close Deal Tier 2 Triage: • Feasibility analysis (AIME) • Market opportunity analysis (OTT) • Prepare summary report for Advisory Council (OTT) Tier I Triage: • Prior art search (AIME) • Market analysis (AIME & OTT) • Commercial assessment (OTT) • Generate Report Inventor Presentation to IP Committee Provisional Patent Filed STAGE 1a GATE 1 GATE 2 STAGE 1b GATE 3 STAGE 2a GATE 4 STAGE 3a STAGE 2b Alabama Launchpad STAGE 3b STAGE 4a STAGE 4b STAGE 4c 2-4 months $0.5—2K 0.5-2 months $2-10K 10 months $2-5K 2 months $3-5K 16 months $25-50K 2 months $3-10K Revenue to UA via: • Sponsored Research Funding • License Fees • Royalties • Sublicense Fees • M & A, IPO 0 6 0 30

7. Stage 1/Gate 1 • Docket IPD • Meet with Inventor(s) • Assign to Triage Team • Prior Art Search • Market Assessment • Generate Report • Present to IP Committee • Approve PPA Filing • Hold & Watch • Return to Inventor(s) 2 – 4 months $500 - $2,000 0.5 – 2 months $2,000 - $10,000 STAGE 1A STAGE 1B GATE 1 PPA Filed

8. Stage 2/Gate 2 • Commercial Assessment • Develop Marketing Materials • Prepare Summary Report • Present to IP Committee • Approve Conversion • Abandon Patent ≤ 10 months $2,000 - $5,000 2 months $3,000 - $10,000 STAGE 2A STAGE 2B GATE 2 Utility Patent Filed

9. Stage 3/Gate 3 • Develop Business Model • Prepare Development Strategy • Outline Value-added Activities • Present to Advisory Group • Evaluation of Opportunity • Accelerator Funding • Present to IP Committee • Nationalize Patent • Abandon Patent 16 months $25,000 - $50,000 2 months $3,000 - $10,000 STAGE 3A STAGE 3B GATE 3 Opportunity Selected

10. Stage 4/Gate 4 STAGE 4A STAGE 4B STAGE 4 • Marketing • SRA • Licensing GATE 4 Close Deal • UA Start-up

11. UA Accelerator Fund • The Problem • Most protected UA technologies are at an early stage of development • No “proof-of-concept” data to secure funding required for further development and commercialization • The Solution • Establish an internal fund to award the development gap between early stage technologies and investment-grade opportunities • Awards of $25-50K for one year • Initial review by OTT • Proposals by invitation only • Subject to review by External Advisory Council

12. Benefits of the UA Accelerator Fund • Accelerate and propel promising new discoveries from the lab to the commercial development stage • Build added value into early-stage technologies, thereby enhancing their commercial viability • Overcome many of the limitations that impede technologies from reaching their full potential • Create more attractive opportunities for licensing, investment and commercial development • Expand public access to new technologies developed at UA • Reinforce UA’s mission and commitment to serve the public interest

13. OTT External Advisory Council • Purpose • Assist OTT in business evaluation of early-stage technologies • Ranking of proposals for accelerator funding • Start-up opportunities • Composition (alumni & other stakeholders) • Venture capitalist • Angel investor • Business development expertise • Product development expertise • Legal (regulatory, IP, business formation, freedom-to-operate • Two meetings per year

14. Questions?