Creating a pathway for Ohio State startups
For some technologies, a startup company is the optimal way to bring the technology to market. Some factors that we consider include the development stage of the technology, the size of the problem the technology addresses and the impact the technology will have on the market.
The startup pathway
As soon as a discovery is made, inventors should submit an invention disclosure through Innovate. These confidential, internal, non-public disclosures help protect the intellectual property (see the university’s Intellectual Property Policy) and serve as a formal communication to the Corporate Engagement Office of a potential invention. A licensing manager will be assigned to the technology within one week of receiving an invention disclosure.
The licensing manager will contact the inventor to better understand the invention. Together, they will brainstorm ways to add value to the discovery as early in the commercialization process as possible. These could include identifying other applicable markets, non-traditional sources of technology advancement funding or ideas for validating and testing the technology. Licensing managers will outline initial action steps for both parties. A faculty meeting usually takes place within two weeks of an invention disclosure.
With the inventor, licensing managers assess the invention for technical merit, maturity, intellectual property protection potential and market impact. This helps to determine what steps can further develop the technology before license. The licensing manager researches and identifies the best protection method for the technology and makes a preliminary assessment of the market landscape and dynamics to understand the invention’s commercial potential. Depending on the complexity of the technology, the assessment step can take several months.
In the event that the technology commercialization team determines that the invention is best protected by patenting, the team makes initial patent filing decisions and identifies outside patent counsel with expertise in the relevant field. The inventor works closely with the licensing manager and the patent counsel to draft relevant, valuable, and enforceable claims based on the nature of the invention, the relevant markets and anticipated business model for commercializing the invention. Any subsequent patent decisions are made in concert with the inventor and the inventor’s college research leadership team.
Non-patentable inventions, such as materials, copyrighted works, and certain software, can be protected by other means such as copyrights or contracts. Licensing managers will be able to guide you on the best way to protect non-patentable inventions.
This process begins as early as a month after the invention disclosure and can take up to several years before a patent is secured, depending on the complexity of the technology.
The management team of a successful startup is comprised of a business leader and a technology leader (at a minimum). The faculty member, or another technology expert such as a post-doc or graduate student, is frequently the technology leader. The new ventures team works diligently to find a business leader with relevant expertise and networks in the technology and/or market. The business leader is responsible for filing the incorporation documents, negotiating the license agreement, preparing a business plan, recruiting additional talent and raising capital for the startup.
Terms of a startup license
The terms for a startup are designed to help the company launch, enable investment by third parties, and align the interests of Ohio State with those of the startup. The primary economic terms include: a royalty rate paid upon sales and an equity stake in the startup. The startup is also expected to bear the costs of intellectual property protection. In certain cases, where the creator finds the business leader and raises capital, the creator is eligible for standard (non-negotiated) deal terms.
Licensing managers lead license negotiations once a potential licensee is found and determine which type of agreement – such as a license or option – best fits the situation. To avoid conflicts of interest, inventors are not involved in license negotiations. Once a business leader is identified, the negotiation process can begin. The time to conduct a negotiation is determined by the partner and the unique characteristics of the deal.
Ideally, the commercialization process leads to a product sold on the market returning royalties and other revenue to the university to be used for additional research, education and inventive activity. Through the life of the license, the Corporate Engagement Office monitors compliance with any agreement and continues to manage all intellectual property activity.
Guidelines for creator startups
We have created guidelines to help clarify and simplify the process by which inventive faculty and staff inventors, or creators, may start new companies based on technology created by them at Ohio State.
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