Innovation: Concept to Commercialization
by
So you’ve had your eureka moment and you’ve done the rough math to figure out that your innovation is probably worth pursuing. Now what?
.
Intellectual Property
At this stage the answer is always the same: now you have to deal with the legalities involved in owning intellectual property. First off, make sure you own the IP. If you had an idea or developed a technology while at work or school, your institution may own some or all of your intellectual property. Check your employment contract, employee or student handbook, or other official documentation from your institute to make sure that you own your idea. Even if not, your institution may not always be interested in your idea and may forfeit the rights to you. Talk to your institutions IP or tech transfer office if you need to do so. Also, if you published the idea in a journal article or elsewhere that could be considered “public”, you have a limited amount of time to file for patent protection before your IP becomes public domain. This varies by country – in the US you have one year, some European countries require immediate filing upon publication – so check your local laws. If you’re really not sure if you own the rights to the IP, hire a lawyer.
Now you will need to lay out some money to file for patent protection. This will require hiring a patent attorney and can easily run into the thousands of dollars, so don’t take it lightly. If you own joint rights to the IP with your company they will likely pay for the attorney and filing. If you own sole rights to your IP but don’t have sufficient money and lack the ability to borrow it, I recommend that you reach out to a colleague who does have the financial means to pay a patent attorney and jointly own the IP. Alternatively, you can attempt to proceed without it and operate solely under nondisclosure agreements; however I strongly discourage anyone from doing so as these offer little protection and are only a small disincentive if someone wants to steal your IP.
.
Commercialization
Once you have the IP sorted out you’re potentially in the home stretch, or at least enough so that your hands may be getting clammy. You more or less have three choices on how to cash out from your idea or invention. Regardless of your choice, I very highly recommend working with a professional to help you unless you have prior experience.
One option would be to license your IP to a company that would be interested in commercializing your technology. In this scenario, they will have to develop the product and launch it, then when they start selling it you’ll get a percentage commission of the company’s sales. This is a good route if you’d like to realize an income from your IP and perhaps don’t need the money immediately. You may need to stay on top of the company after licensing to make sure they put sufficient priority on product development and marketing, so it can involve some work as well. Licensing also involves some degree of risk sharing with the company that you license your IP to since if the product is not successful you don’t get any revenues from it either. It works the other way as well – if it’s a blockbuster product you can make some serious bucks.
A second option, which is the fastest but with the lowest revenue potential, would be an outright sale of your IP. Since the purchasing company would be assuming all the risk, there will likely be a lot of haggling involved and you’re probably not going to get as much money compared to other options, but you do get to cash out, walk away, and move on with your life.
The third option, which is the most complex and time-consuming but has the greatest potential rewards, is building a company around your IP from the ground up. You’ll have to raise venture capital, set up operations, hire employees, and manage all the other requirements of running a business, which are too numerous for me to cover in this format. Unless you’re extremely passionate about your idea or invention and are quite certain about its potential for commercial success, I wouldn’t suggest building a company around it.
Regardless of your situation and goals, there are professionals who can help you with realizing gains from your idea and keep you from having to derail your career as a scientist to manage your IP. Your university’s tech transfer office may be one such resource. There are also commercialization consultants who can help commercialize your idea for a flat fee, an hourly rate, or a commission. If you have a trusted connection who has the right experience to help you, that person may be a good candidate to help as well. Regardless of whom you work with, make sure they have the right combination of industry, business, and technical knowledge to ensure your deal is successful. With a little help, you can take that great idea of yours and turn it into dollars.
.
Carlton Hoyt, Ph.D. is a scientist-turned-businessperson and is principal consultant and co-founder of BioBM Consulting, which provides commercialization services to life science inventors and companies. He welcomes you to contact him directly at [email protected].
.
.
Check out the other articles on Innovation in this series:
.
.
Have you ever considered commercializing one of your ideas? What happened?
.
.
Steven
wrote on April 5, 2011 at 7:22 pm
If you're a postdoc and you can see that the project may ultimately result in valuable IP, is it better to have a conversation with your PI early on to make sure you are both on the same page? Or do you think it makes more sense to wait until the IP has been established before initiating those conversations?
Carlton Hoyt
wrote on April 6, 2011 at 11:33 am
Steven,
If your project will directly lead to the generation of the IP in question, or the IP is based in large part off the research you are performing in your current lab, then yes, talk to your PI about it if you're interested in pursuing it because you'll want to plan to make sure that you can and do protect your IP.
For example, in the United States if you publish a paper that describes any kind of intellectual property you have one year before that IP becomes public domain. You will want to be prepared to act on protecting the IP before you publish, or at least soon after. This will probably involve your institution as well, and institutional IP departments can be notoriously slow. You may have to convince them that your IP is worth patenting or, if they repeatedly fail to see the value, to release the IP to you. This can be a time-consuming process that you should be prepared for ahead of time.
On the other hand, if your idea is not directly attributable to the work you are doing in your lab, read your employment contract and determine under what circumstances you retain rights to your IP. If you bring up an idea to your PI that is not directly related to your research, you may be ceding some or all of the rights to IP which may otherwise be yours. On the other hand, if you don't disclose it and work on it in your lab, where will you be able to develop the idea? Is your concept well-defined enough without development work to be meaningfully protected? … This kind of situation would require a lot of thought.
Hope that helps, and best of luck! Feel free to reach out to me if you have any questions.
-Carlton