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Technology Resource of the Southeast, Inc. Technology Bundling & Clustering May 17, 2007

Technology Resource of the Southeast, Inc. Technology Bundling & Clustering May 17, 2007. Is there really a buried treasure?. Who has the map? Is it real? How do I get to it? What does it cost Is it worth it?. Why bundle technologies?.

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Technology Resource of the Southeast, Inc. Technology Bundling & Clustering May 17, 2007

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  1. Technology Resourceof the Southeast, Inc. Technology Bundling & ClusteringMay 17, 2007

  2. Is there really a buried treasure? • Who has the map? • Is it real? • How do I get to it? • What does it cost • Is it worth it?

  3. Why bundle technologies? • Wealth of “unused”technologies from large & small business, Universities, Government Laboratories and trade associations • Expand revenue potential – broaden product lines • Promote Economic Development – Business expansion, start-ups and joint ventures

  4. What purpose does it serve? Answers to a common business problems • Increase sales • Develop new markets • Develop and dominate new areas of core expertise

  5. Examples of projects based on recent events • Washington Post Story – “Rice Industry troubled by genetic contamination” • Barbaro – winner of the 2006 Kentucky Derby, euthanised because of a hoof infection • Kaufman Report – Changes needed in tech transfer methods to create more opportunities

  6. What does a technology bundle look like? Genetic Engineering (In development) • 1 issued Patent • 3 Patent Applications • 2 Applications being written • Collaborative Research Agreements • Pre-agreed terms for splitting royalties/income • 2 Cross-Licensing Agreements

  7. What does a technology bundle look like? Laminitis/Hoof Injury ( In operation) • 3 Patent applications • 2 design patents • 2 Trademarks • 2 Cooperative research agreements • Pre-agreed terms on royalties/income • Expanding uses to include drug delivery systems • In-Licensing of synergistic product concepts (4)

  8. What Does a technology bundle look like? Kaufman Recommendations (In formation) • Assistive Technology start-up based on cooperation of Universities and commercial enterprises targeting the “boomer generation” • In-license of 5 Patents • 2 Joint Development agreements • Pre-agreed royalty/income distributions

  9. What do these potential projects have in common? • Available technologies from Universities • Available technologies from Private Industry • Available technology from trade association members • Potential for collaborations to form successful business expansion, partnerships or spin-offs

  10. What is the value proposition? • Models are developed that make sense from a business plan perspective. This makes them attractive to investors and/or industry partners • Individual IP valuations are very low when valued as single items • Combined IP provides an exponential valuation potential • IP is searched and screened on basis of synergy

  11. One solution • Bundle one-off solutions from University and Government Labs into technology clusters large enough to attract start-up capital & management • Identify commercial concerns and public agencies willing to cooperate with the bundling concept • Encourage corporate sponsorships and donations in kind to the pool of available technologies

  12. Hurdles to overcome & potential solutions • Agreement to work together is the primary issue • Revenue distribution is the number one challenge • Independent, third party objective evaluation and valuation provides the threshold for agreements • As a technology is located and identified as a component, terms of the agreement are then approved and become consistent between all parties based on the independent assessment and value of each individual component

  13. What will the evaluation process look like? • Verification of all pertinent facts • Patent Hierarchy Analysis • Technical, Market and Competitive Assessment of the Technology • Full Valuation Analysis using “Triangulation” Methodology • Valuation and Financial Modeling to build a framework for negotiation issues

  14. Basic Triangulation Methodology • Used for analysis based on a technology value. • If B approximates C and C approximates B, and if A compliments B, then C must compliment A and thus confirms the Technology Value.

  15. Technology Value • The Technology Triangle within a triangulation model • Each component compliments and verifies each other component • A approximates B • B approximates C • C approximates A

  16. One final reason to bundle

  17. Why doesn’t everyone bundle ? • It takes a lot of time to conduct a proper search • Not all identified target owners will be willing partners • All technologies must be clean and Patentable • Foreign rights must be in a preserved state • All agreements must be “exclusive licenses”

  18. Presenter Richard W. Sheehan, President Technology Resource, Johnson City, TN (423) 929-0380 RSheehan@technologyresourceSE.com

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