IP is becoming the most valuable asset on the planet and yet the market still struggles to unlock the full commercial and economic potential of IP assets.
Global spending on R&D is at record highs, exceeding $1.7 trillion globally – a trend that is set to continue as countries pledge to increase public and private R&D spending by 2030, but the full value of the IP asset is far from being fully realized.
The annual waste in underused IP assets in the US alone is estimated at $1 trillion – according to Forrester Research, more than 50,000 patent assets from Universities are underused each year, with less than 5% of technologies developed by major Universities and research centers generating revenue for inventors and Universities themselves.
At the same time innovation cycles are shortening – Companies must now go-to-market faster than ever before and this is accelerating each year. Current systems and infrastructures are simply not set up to handle this throughput, highlighted by many corporations as the biggest obstacle to innovation ROI.
To keep pace with accelerating innovation cycles, corporations have quickly shifted to external solutions to access the technology they need. It’s only sensible to think that University Technology Transfer would be thriving in this environment – as illustrated by the above figures however, that is far from the case.
That is not to say University Technology Transfer is underperforming – Over $71BN USD was spent on US federally sponsored research in 2018, in the same year around $2.94BN in licensing revenues were generated, which assuming a 2% average royalty rate on academic inventions means total sales from startups utilizing academic technology of around $147BN USD.
In this sense, the returns to the economy are well exceeding the funding invested into public research, even if it doesn’t make it back into the individual University who conducted the research. Though, when you consider that all of that revenue comes from successful partnerships on a miniscule subset of patents, it is hard not imagine the returns to Universities and the public for their invested money if we could double or triple that rate of return – the opportunity cost of not commercializing the majority of University IP is enormous.
There is a strong correlation between patents issued and revenues earned. That said, current federal rules in the US do not allow any of the $71BN in research funding to be spent on patent filing, leaving Universities to foot the bill. Additionally, not all University funding is spent on inventions with a plan to commercialize the technology and a lot of technology is simply not ready to commercialize.
Patents are expensive and there is never enough funding to file patents on all inventions generated. So then comes the question of what should you file?
Patents exists to provide a commercial monopoly and to exclude others from making, using or selling the invention. If the objective is not to commercialize, then there are more cost-effective routes than patenting (i.e. defensively publishing your research).
Though innovativeness and defensibility are important, the market should be the real focus when deciding which patents to file – Are companies looking for this type of invention? How much are customers willing to pay for products made possible by this invention? Is the market growing?
By focusing on an invention’s commercial opportunity, Universities align filing decisions to the purpose that a patent exists – using the invention to generate competitive advantage, build value and generate returns (whether returns are measured by royalties, sales, GDP or Jobs).
The objective here is not to rethink how innovation is done – University research is not entirely done for the sake of commercial returns and that isn’t changing. Instead, the objective is to assess innovations based on their potential to be commercialized and to focus your limited filing resources on the inventions that will most likely generate returns.
To do this, Universities need to be more data-centric, leveraging intelligence and market insights to steer resources towards the assets with the highest likelihood of commercialization – is the invention of high quality? How big is the market? Is there a viable commercial opportunity?
It was once cost-prohibitive to perform this analysis (even with the latest search tools). Fortunately, new advancements in AI technology enables you to get actionable intelligence far quicker and cheaper than before (IPwe provides such solutions – for more information see here).
From this type of intelligence, you define the inventions to mobilize behind – from proposal grant through each stage of the invention and filing process, your inputs are continually tested against the market, plugging into commercial partners as early in the process as possible.
Inventions that feedback a low chance of commercialization are valuable in a different way – rather than spending money to file, these inventions can be identified upfront and routed to other protection channels. Your resources are now focused on patents with the highest chances of generating return.
IPwe helps Universities to understand markets and technologies surrounding their patents, focus resources on the highest value assets and connect to sourcing and contracting of partners. We do this by combining proprietary technology with 80+ years’ industry expertise and a global network of IP professionals.
By focusing on quality and marketability of patents, the IPwe Platform is the next industry evolution, bridging the needs of Universities and Corporations and driving commercialization.
Contact us for more information.