E cdip/17/inf/2 original: English date: February 29, 2016 Committee on Development and Intellectual Property (cdip) Seventeenth Session Geneva, April 11 to 15, 2016

You gather your staff together and announce a second “eyes and ears” program. The intellectual asset pamphlet, you say, will likely only help people find your office who want to find it. You need more ways of ferreting out the intellectual assets being created on campus. To this end, you ask your secretary Kizbit to collect every announcement and flyer about public lectures, performances, and other events taking place on campus. You will review this list, and someone from your office will attend those events that suggest they may involve potentially commercial intellectual assets. If no one can attend, then the relevant personal will be called to discuss intellectual assets.

In addition, each week, your staff will be assigned the task of visiting a new university department. The objective will be to see and hear what seems to be going on in the department. The visits may be somewhat unannounced on occasion. American aviation executive Donald Douglas was famous for walking around his company’s offices and asking engineers to explain what they were working on. According to legend, if an employee could explain what he was working on in a manner that reflected good commercial sense, then the employee might receive a promotion on the spot, but if the employee could not explain what he was working on, then he might be immediately terminated. This is not what will happen at NUE, of course - but Information flows sporadically and imperfectly in any large organization, and NUE certainly qualifies as a large organization.

You will assess the information that your staff unearths from these programs. For those items that seem promising, you will make a proactive visit to the relevant professors, researchers, and students and seek further information and their agreement to consideration of commercialization efforts.

You look out over the campus. You review the list of schools and departments. In the 100 years of the university’s existence, no sustained commercialization program has ever existed. No one has been systematically required to report their findings to the university. The upper echelon of the university basically has no comprehensive view of what’s been done or how good it is.

You decide that one of your first steps must be to conduct a survey of the university – but you have many other things to do and your activities simply cannot wait until a survey has been completed.

2.5.1 What to Commercialize

Intangible Assets and Intellectual Property are rarely recognizable in their raw form. They are, after all, intangible. Many Intellectual Property Rights require their owner to take some affirmative step in protecting the right (e.g., patents and trademarks in most countries must be filed with a government office) or refrain from taking certain actions (e.g., publicizing trade secrets).

Your raw ingredients include: 1) what the university has done, 2) merged with your knowledge about what comprises an Intangible Asset capable of commercialization, and 3) overlaid with knowledge of market conditions for these Intellectual Assets.

You must also remember that important intellectual assets can go far beyond those that are legally protectable in their own right, such as patents and trademarks. The university’s intellectual assets comprise anything that can be retained in confidence and/or things that are not generally known. This list is not exhaustive, but it provides a reasonable glimpse over the subject. Technology-related Intellectual Property comprises inventions, formulations, recipes, processes, specialized technical information, designs, patterns, and/or know-how. Marketing-related Intellectual Property includes trademarks, trade names, trade dress, brands, and service marks. Documents, including software, can be protected by copyright and trade secret, and software may be patented in some jurisdictions under certain conditions. Human Capital-related Intellectual Property comprises the university’s workforce and certain key staff. Other Intellectual Property comprises methods, franchises, programs, business systems, procedures, campaigns, surveys, studies, forecasts, estimates, training materials, future sales/order books, or use rights. Similarly, services may include research and development, engineering, or marketing. Similarly, data and databases like compiled results from clinical trials and collaborative research agreements and document these developments in a proprietary manner.

You decide to create a database that tracks the various intellectual property activities occurring at NUE. You suspect that the faculty will likely view the project as an additional burden and may respond somewhat unenthusiastically. You decide to build the database using a variety of reference points that can be independently measured.

Here are the reference points you will use for building the list:

• 
  An intellectual property brochure distributed throughout the university;
  
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  A survey of existing university contracts;
  
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  A survey of publications originating from the university; and
  
• 
  Onsite interviews of the university’s staff.
  

You ask Kizbit to visit the library and see if they have a list of university publications for the past five years. You tell her that if the library doesn’t have such a list that she is to use the library’s periodical databases to compile such a list based on author affiliation. You tell her that the list should include the author’s name, department, publication title, and any information about the funding source for the publications. You also ask her to visit the university human relations department to pick up a list of names for all the university’s professors. Kizbit is to also search the periodical databases to see if any of the professors have published without identifying their university affiliation.

Meanwhile, you sit down to write an Intellectual Property brochure for the university. You spend several days writing this brochure, which has been discussed.

You are also teaching an undergraduate course in the business school on technology management and technology transfer. The course is attended primarily by students from the business school as well as students from the engineering school along with a few students from the medical school.

You tell your students that you cannot manage or exploit that which you do not know about. The students have already taken an exam covering the various types of intellectual properties and how they can be protected and exploited. They are to survey the university looking for patentable inventions, trade secrets, copyrights, domain names, design rights, trademarks, know how, skilled human capital, innovation processes, and management organization. You tell the students that their first assignment is to conduct a survey in the various schools of the university, note all that is going on in these departments, and identify what forms of intellectual property they may be creating.

Collectively, the students will complete this chart:

Your students submit their papers regarding the intellectual property survey. You ask each team to make a presentation about what they have found. Most groups admit that they had to think long and hard about what they were hearing and whether it had commercial value. You ask Kizbit to assemble the information from their papers into a completed table. She provides you with the following:

As the university continues making advancements across a wide number of fields, the Commercialization Institute will need to continues surveying and tracking the Intangible Assets that are created. The Commercialization Institute’s ability to exploit the university’s Intangible Assets will almost certainly pale in comparison to the number of assets created by the university’s staff. This means that the Commercialization Institute will need to create a system for rating and ranking identified Intangible Assets. The rating and raking system will help the Commercialization Institute prioritize its resources.

We will discuss all of the Intangible Assets uncovered in the survey above. However, in a real life university, we might likely need to apply a rating and ranking system to narrow the list down to those opportunities that our resources could handle. The detailed discussion for several of the assets discovered in the survey will implicitly and/or explicitly involve rating an IP asset for commercial exploitation.

We will explain one operable rating and ranking system here. There are many others. As the commercialization officer grows in experience and as the university commercialization programs mature, this rating and ranking system can be adjusted to suit the best needs of the institution.

A rating and ranking system involves exploring several seemingly unrelated issues and integrating the results to form a coherent picture. One topic involves exploring the commercial potential for an intellectual asset. Let’s say a university researcher has invented a new method for making paper from papyrus. After just a few minutes research, you can tell that the method offers no improvements over conventionally made paper. The method’s only use would be for hobbyists and lost explorers. You quickly investigate the market for papyrus hobbyists and discover that while there are more such hobbyists than you suspect, they are already well-furnished with low cost raw materials. As for lost explorers, they would all take paper with them and only need papyrus if they lost their paper. So, you conclude there is extremely limited commercial potential for this improved method. Thus, you have no need to compare it with competing solutions, see how readily you could find licensees, or estimate the time horizon for commercialization.

Assume the above hypothesis changes slightly, and you do find some possibility for commercial potential. You next compare the innovation with competing solutions to determine what, if any market (niche or otherwise) it might be used. Let’s assume for the papyrus example that you discover that the only market of any size would be the specialty handmade paper market. You conclude that it might be possible to enter this market, but you also conclude from the size of the market that you likely have many other and better uses of your time.

Again, assume the hypothesis above changes slightly, and you discover that there is a niche paper market in which the improved papyrus could play a significant role. You investigate (quickly) how ready this market is for a new entrant such as your papyrus improvement and you ask the researchers how soon the papyrus would be ready for commercialization. If the researchers tell you that it will be several years before their improvement could be commercialized, then all things considered, you may choose to give this innovation a low priority. Of course, in some cases, the university may opt to hold certain pioneering inventions and innovations so that these early and fundamental rights will be available when the market matures. (Even universities with the greatest possible resources, however, cannot afford to place too many bets on the future.)

Changing the hypothesis again, assume that the papyrus is ready for commercialization now and the market itself could potentially absorb a new entrant. You make some inquiries about potential licensees and discover that this specialty paper market is dominated by a handful of companies that never in-license technology. Thus, you conclude that while the papyrus could be commercialized you will have to spend an inordinate amount of time chasing down an unknown pool of potential licensees.

Assume now, however, that a few months after you had conducted this inquiry, one of the inventors comes back from a conference with the business card of a specialty paper company in a foreign country that seemed very intrigued about the papyrus business. You’re glad that you have done some initial commercialization work on this technology. The papyrus invention rises now in your ranking since the one obstacle – chasing down a potential licensee – has also been solved. Now you can also consider issues such as valuation and the commercial terms that you would like to seek from the potential acquirer. Chapter 3 provides an introduction to the formal process of evaluation and valuation.

Rating and ranking the university’s IP assets allows you to know where to concentrate your efforts. This also gives you a base to build from as new developments (both good and bad) transpire.