Tech Transfer: Which Came First? The Chicken or the Egg?

Thursday, September 24, 2015

Tech Transfer is an idea that everyone, regardless of industry, seems to be in love with at the moment.

Theoretically, it’s great.  

Here’s why:

Research (the chicken) that has already been paid for yields discovery and results (eggs) that, if licensed, can bring income (more chickens) back to both the inventor(s) and the institutions where the inventors work.  Brilliant (It’s a veritable hatchery!) 

But, here’s the catch:

Who funds and times the creation of the property right (i.e., the hen house where the eggs can hatch to make more chickens), also known as the patent?

Most often, this question is left in a sort of “limbo” where the tech transfer office (the farmer in the chicken scenario), with very limited funds, cannot pursue each worthy invention or a research grant that expressly sets aside the notion of money being spent for a patent.

Timing is in even more of a “limbo” as patent applications are filed in a waiting room of indeterminate duration at the US Patent and Trademark Office. Some patents issue in as little as 18 months, some issue at over 80 months.  Many never issue at all, and there is the rub – an issued patent is an asset – you can measure it, understand it, invest in it. A patent application, even if beautifully written and filed, is not nearly so investment-worthy.

Yet, patents are essential to accomplishing the objectives of tech transfer.  Without patents there is no ability to attract money. The following excerpt, from David Nay sums it up nicely: 

“Studies have shown that IP is essential in attracting Venture Capital (VC) investment.  A 2010 study performed in association with the MIT Sloan School of Management demonstrated that companies with high-quality IP positions are over six times more likely to be acquired or go public than to go out of business.” 

 SEE THE ISSUE IN ACTION:  

                Read Show Me the IP! Venture Capital Success Based on Patents.  

This probability for success is a significant driver in VC investment decisions, yet it appears to be underappreciated by entrepreneurs that are often focused solely on product development. 

Similar to the MIT study, a 2008 U.C. Berkeley survey found that 97 percent of all venture-backed biotech/medical device companies hold patents, and 70-90 percent of all venture-backed IT firms hold patents.  The Berkeley survey found evidence that patents are often the differentiator between two similarly situated companies, and that “venture-capital investors appear much less willing to fund companies that hold no patents.”

Without a patent, quickly and predictably, the chances of maintaining momentum toward producing an asset that yields a return are small. The individuals involved move on, they have to, to new grants and projects. Whatever publication was put out is generally enough for them, even if promising commercial prospects wither. Grad students who may have devoted part of their time to the effort involved in the research  likewise wrap up their endeavors and move on to the jobs awaiting them in industry or academia.   There is nothing for any of these parties to pursue because there is no coalescing of capital and initiative around a rapidly developing patent portfolio.  

What to do?

Most importantly, you don’t want to end up without any chickens OR eggs, so we advise that you consider Berenato & White’s help in obtaining a patent for your product in as little as 12 months. 

There are two options to speed up the patent process:

  1. Accelerated Examination:  Here, you basically perform your own examination and present the results for review by the USPTO. If they agree with your review, presto, you have a patent. 
  2. Fast Track: Here, you pay a large filing fee ($ 4,000) but the USPTO still does the work for you.  

The Fast Track approach is limited to 10,000 applications, but there is no limit in accelerated examination. 

Contact the Berenato & White office and ask for Steve Kelber or John White, to talk about which strategy works for you.