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About

Editor-in-Chief,   Anatole Krattiger

Editorial Board

Concept Foundation

PIPRA

Fiocruz, Brazil

bioDevelopments-   Institute

Evaluation and Valuation of Technologies
Topic Guide for Senior Administrators

Why This Topic Is Important

This section addresses the crucial step of determining what, if anything, the commercial use and value of a piece of IP-protected technology or genetics might be. The primary lessons of this section are that such value is highly uncertain and difficult to assess. Yet, an understanding of the issues and methods involved provides central insight into the nature of the problem of transferring technology from a scientific laboratory to the market.

Key Implications and Best Practices: Section 9

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

  • Determining how to translate an invention into an innovation that makes a difference in people’s lives (economically or socially or both) is one of the principal reasons technology transfer offices exist.
  • It can be challenging to negotiate licensing agreements that are fair to everyone and conducive to “moving” inventions to innovations. It is far better generally to make an imperfect deal than no deal at all. People do not benefit until technology is developed and distributed.
  • Institutions need to assess whether or not patenting is the most effective way to ensure high economic and/or humanitarian impact of their technologies.
  • A public institution’s decision with regard to patenting should depend on (1) whether such patenting would be socially responsible, (2) whether there is public interest in the technology, and (3) whether patenting would help the local economy (where applicable).
  • Putting a “price tag” on an invention early on is difficult, if not impossible. Fortunately, the full value of an invention need not be determined when the invention is transferred or licensed, as value can be realized later through the use of running royalties, fixed payments, common stock (equity), R&D funding, lab equipment, consulting services, grant backs, or access to other proprietary resources. For public sector organizations, in-kind contributions may sometimes be particularly appealing.
  • Evaluating a new technology is difficult and the evaluation will necessarily be imprecise. It is better to encourage a TTO to make deals creatively and expeditiously, without the imposition of minimum royalties and other restrictive terms. The important thing is to find a price that is acceptable to both parties and that encourages the licensee to invest in the development of the technology.
  • Senior management should be supportive of the overall deal making of its technology transfer officers rather than be critical of individual deals. Naturally, TTO officers need to follow procedures, apply policies, and be well trained and experienced in deal making.
  • Putting pressure on TTO officers to break even or to generate revenues can constitute a perverse incentive, almost forcing a TTO to go with up-front payments. This may drain a startup of critical financial resources and thus reduce the level of investment that is allocated to making the invention work.
  • Probabilistic modeling software can aid pricing efforts. The most effective software is expensive and may not be a good investment if fewer than 100 deals are made per year. Quite often the best approach is to get as many licenses as possible completed in a short period of time, even if an individual license does not provide the maximum possible income. The more licenses, the higher the probability that one, or a few, will generate returns.

Recommended Chapters       Show All AbstractsShow All Abstracts

Show AbstractAbstract Evaluating Inventions from Research Institutions
by Lita Nelsen

Show AbstractAbstract Pricing the Intellectual Property of Early-Stage Technologies: A Primer of Basic Valuation Tools and Considerations
by Richard Razgaitis

Show AbstractAbstract Technology Valuation: An Introduction
by Robert H. Potter

Show AbstractAbstract Valuation of Bioprospecting Samples: Approaches, Calculations, and Implications for Policy-Makers
by William H. Lesser, Anatole Krattiger