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MIHR

PIPRA

Fiocruz, Brazil

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Home > IP Topics Index > Dealmaking and Marketing Technology to Product-Development Partners > Technology Marketing

Technology Marketing

Editor's Summary, Implications and Best Practices

Abstract

Finding out how to market your technology to potential licensees can be a perplexing process. There is no common consensus about how to approach technology licensing, and workshops on the topic tend to offer a haphazard mix of tools and strategies that cannot be applied generally. This chapter emphasizes the importance of actively marketing your technology. It offers a systematic marketing approach supported by numerous models for contacting and prioritizing your contacts. The chapter also includes numerous helpful worksheets to guide and focus your approach. By following the steps laid out in this chapter, you will have learned a great deal about the market for your “merchandise,” its potential licensees, and its value. You may have even found a licensee!

1. Introduction

If you ask ten seasoned licensing professionals about how they locate potential licensees, you are almost guaranteed to receive ten different answers. The truth is that technology marketing, although one of the most important and difficult aspects of technology licensing, is rarely carried out in a systematic way.

There is no consensus about the best way to approach technology licensing, and many people are not willing to share their expertise. Marketing experts in technology transfer learned the ropes just like about everyone else learns the tricks of their trade: by experimenting with hit-or-miss techniques. This haphazard approach probably explains why most training workshops on the topic offer smorgasbords of tools and strategies that one person or a few people found useful and that may or may not be useful to someone else; the workshops never offer much guidance about which tools to use, when to use them, or in what order.

The following materials suggest that it is possible to construct a marketing plan that will (1) work for both the novice and the expert in most, if not all, situations and (2) allow the licensing professional to continually refine his or her marketing strategy by systematically examining the feedback received from various sources.

2. Moving Merchandise

To fully appreciate how important technology marketing is to your licensing program, consider this simplified step-by-step plan of how technology marketing works:

1. You begin by having to market technologies that are “raw materials.”
2. By investing capital in patent applications or other IP protection, you convert the raw materials into “merchandise.”
3. Licensing converts your merchandise (non-liquid IP assets) into capital (liquid assets). These assets fall into two categories: recovered capital and profits.
4. Recovered capital (and, optionally, profits, as well) can be re-invested with the aim of converting more raw materials into merchandise, the licensing of which will generate more recovered capital and additional profits.
5. If the rate of licensing is slower than the rate at which raw materials are converted into merchandise, your inventory will grow. Eventually, most of your capital will be tied up in nonliquid assets, and you will go out of business.

The point is that you must move your merchandise.

3. How to Market

Our approach to technology marketing makes use of the telephone extensively and requires that each call to a prospective licensee be followed up in writing.

Although direct mail communication with potential licensees is perhaps the least costly approach, the response rate to such mailings is extremely low, and there is no way to answer any questions that potential licensees might have. The same can be said for computer databases and bulletin boards, which require potential licensees to log on, search for, and find advertisements and information about your technology. The limitations of such an approach are evident.

In an ideal world, the licensing professional would personally meet with all potential licensees: much more information can be communicated in person, and the response to the presentation can be gauged more easily. But few companies have the resources to keep their marketing professionals on the road. Although conferences are an efficient way to meet many potential licensees in person, they do not happen frequently enough to be adequate as a sole source of new contacts; besides, not all companies send representatives to such meetings.

Although telephone conversations are not quite as good as face-to-face meetings, phone conversations are a close second choice. The greatest advantage of using the telephone is that you can easily and inexpensively communicate with potential customers who are geographically distant and dispersed. Follow up each phone call with a brief letter and a nonconfidential description of the technology you hope to license. This follow-up activity will remind your potential customer about your offer and allow you to offer materials that can be sent to his or her company’s scientists for further consideration.

4. Disclaimer

Keep in mind that the ideas shared in this chapter are new and have not yet been put to the test in the “real world.” However, they are based on more than 20 years of experience by licensing professionals. We believe that these are practical materials, and we hope that you will put these materials to the test. We look forward to hearing your comments and criticisms.

The strategy outlined here is meant to serve as a template. We expect each user to modify it to suit his or her own needs and personal style. Some professionals may eventually choose to abandon this strategy altogether for a more free-form approach to marketing.

Finally, we have recommended particular reference texts or databases with reluctance; some professionals in the field might feel that we are promoting the interests of certain companies. We would like to point out, however, that 1) not one of the contributors has ownership interest in any of the companies recommended here and (2) none of us has received any compensation or consideration for our recommendations. Furthermore, we acknowledge that many other services and resources may be just as good as those we have recommended, and some may be far better; many more resources exist that we have been able to personally evaluate. We therefore invite you to explore the alternatives for yourself. The Association of University Technology Managers (AUTM) Web site contains a section on marketing resources in its business section that can help you to begin your exploration.¹

5. Systematic Marketing

This systematic technology marketing approach can be divided into four major activities:

Step 1. Collect information from the inventors.

1. Attach the marketing information sheet shown in Box 1A to your disclosure form (all Boxes are at the end of this chapter). This form explains the importance of technology marketing to the inventors.²
2. Attach the subquestionnaire, shown in Box 1B to the disclosure form, which asks the inventors to consider a variety of marketable applications for their invention. Each inventor should fill out this portion of the questionnaire: each person is likely to have different ideas and different contacts.
3. Based on any information you have on hand (or that you can reasonably estimate) about the current situation of the market(s) into which the invention might be introduced, fill in the summary sheet shown in Box 1C. Fill out one sheet for each hypothetical product or service envisioned by you or the inventor(s). Keep this sheet updated as you collect relevant information.
4. In order to collect further information that may aid in marketing the invention, consult with the inventor(s) about the contents of the summary sheet in Box 1C, and ask them the questions on the checklist in Box 1D.
5. For each target market, prepare a tailored, single-page, nonconfidential disclosure, in accordance with the guidelines and sample text shown in Box 1E.

Step 2. Collect information about potential licensees.

1. Begin with online searches. You may decide to manually search for potential licensees, for example, using the CorpTech hard-copy directory.³
2. Subscribe to a service that provides an online database that you can search for potential licensees (for example, Knowledge Express Data Systems [KEDS] or another system of your choice).
3. Install the database software by following the tutorials and step-by-step instructions provided. Review any additional instructional materials that come with the database, paying particular attention to information on how to use the database.
4. Develop both a list of keywords that will help you identify potential licensees and a profile describing your ideal licensee, and also develop a CorpTech-like profile for your ideal licensee.
5. Search the databases using the parameters you have collected: your keywords, CorpTech profiles of companies that might be possible customers, and the profile you created of the ideal licensee. Identify the five companies that seem to be the best matches for your technology. If you are having trouble identifying the top five, use the worksheet in Box 2 to narrow down your list of companies.
6. If you are using KEDS, you can substantially expand the number and focus of hits by using the Knowledge Express “hypertext” function. This function allows you to quickly determine which of the many available databases have entries that match the keywords you have identified. You can then search each database individually for possible licensing prospects. The hypertext function will often find entries on advanced technologies in the CorpTech and BioScan databases (the latter is a database that focuses on biotechnology and related disciplines), Business News (which contains current information and lists companies that are not listed elsewhere), and SBIR (which lists awards made by the Federal Small Business Innovative Research program for small, high-tech companies).

Step 3. Review and prioritize your prospects list.

Examine your list of prospects. Using the worksheet in Box 3, assign each of the top five corporate prospects a rank from 1 to 5, with 1 the highest priority and 5 the lowest priority.

Step 4. Make contact with potential clients.

1. Review the guidelines (Box 4A) for finding the right person to talk to. Write down the company’s telephone number, and, if possible, make a list of names and titles of potential contacts.
2. Review the three cold-call transcripts (Box 4B) and familiarize yourself with the sorts of conversations you can expect, depending on whether your prospects are very interested, not at all interested, or somewhat interested.
3. Review the “What to Get Across to Your Contact When You Call” checklist (Box 4C), and make sure you have all of the information you will need to convey. You may want to write it down so that you do not forget any of it.
4. Make the call. Call the company with the lowest priority of the five you have selected. Box 4A explains how to find the right person to talk to.
5. During and after the call, record information about the prospective company and how your contact responded on the “Reaction Data Sheet” (Box 4D).
6. Send the prospect a follow-up letter, modeled after one of those in Box 5, along with a copy of the nonconfidential disclosure (regardless of whether or not the prospect requested one).
7. Repeat steps 4 through 6 for each of the other prospects, working from the one with the least potential to the one with the greatest potential (in other words, beginning with number 4, then number 3, and so on).
8. Next, call those prospects ranked 6, 7, 8, and so on in order of decreasing potential.
9. If you have found a licensee, congratulations! But do not stop. One prospect is fine, but two or more prospects are better: if you are planning to offer an exclusive license, more prospects will give you more bargaining power; if you are planning to offer nonexclusive licenses, each new prospect means more payoff for your marketing efforts. If, on the other hand, you have not been able to find a licensee, assess your results using the guidelines in Box 6 and decide what you want to do next: Continue looking for prospects using the same strategies? Continue looking for prospects using new strategies? Wait a year and try again? Write off, as a loss, the capital invested in IP protection for this invention?

6. Conclusions

By following these steps, you will have learned a great deal about the market for your merchandise, its potential licensees, and the value of your product. You may have even found a licensee. Build on whatever success you have found by taking the time to learn from your experience and by analyzing the feedback you have obtained from your systematic marketing approach. And share what works with others.

For further information, suggestions, or guidance regarding this marketing strategy and how it might be customized or refined, please feel free to contact the authors at the numbers shown below. We would also appreciate your feedback on how this approach has worked for you, and how you believe it might be improved. Please share with us copies of any revisions you may make to the instructions or forms.