1. University of California, Berkeley
Spinning Off in the U.S.
Dr. Gary W. Matkin
Associate Dean
University Extension
University of California, Berkeley

2. University Technology Transfer Activities
Patenting and licensing of university intellectual property
Research Partnerships with industry
Industrial affiliate or liaison programs
Technical/managerial assistance programs
Business incubators
Research parks
Venture capital/business start-up activities
Continuing Education

6. Taking Equity Model Research Institution For Profit Company
License
For Profit Company
Equity
License
For Profit Company
Equity
For Profit Company
License
Equity

7. Taking Equity Model Advantages Replication after established policy
Diversification
Equity build up
No up-front investment
Not dependent for return on one technology

8. Taking Equity Model Disadvantages Little control Equity dilution
Portfolio management overhead cost
Case-by-case negotiations
Messy (relations with inventors)

9. Taking Equity Model Issues Inventor share distribution
Degree of management involvement
Exercising voting rights
Board of Director membership
Anti dilution opportunities
Liquidation policy
Limits to percent of ownership

10. Non-Profit Buffer Model Alternative 1
Assigns
IP Ownership
Research Institution
Non-Profit Subsidiary
Receives share
of profit & equity
buildup
For Profit
Spin-Off
License
Equity
Tech Licenses

11. Non-Profit Buffer Model Alternative 2
Selective
Assignment
Research Institution
Non-Profit Subsidiary
Receives share
of profit & equity
buildup
Tech
License
Office
License
Equity
For Profit
Spin-off
Tech Licenses

12. Non-Profit Buffer Model
Advantages
Maintains control
Provides initial buffering
Can provide markedly increased flexibility
Disadvantages
Still has non-profit status
Hard to attract capital
Still removed from marketplace

13. For Profit Alternative One
Research Institution
For Profit Subsidiary
Creates
&
Owns
For Profit
Spin-off
License
Equity

14. For Profit Alternative Two
For Profit Subsidiary
Research Institution
Investor(s)
Majority
Owner
Minority
Owner
For Profit
Spin-off
License
Equity

15. For Profit Alternative Three
For Profit Subsidiary
Research Institution
Investor(s)
Minority
Owner
Majority
Owner
For Profit
Spin-off
License
Equity

16. For Profit Alternative Four
Research Institution
For Profit Partner
New For Profit Venture
Investor(s)
For Profit
Spin-off
License
Equity
Investor(s)

17. For Profit Alternative Five
Research Institution A
Research Institution B
New For Profit Venture
Investor(s)
For Profit
Spin-off
License
Equity
Investor(s)

18. For-Profit Alternatives
Advantages
Immediate entry into market
Can attract capital
“Rheostat” on control
Disadvantages
Sometimes little buffering
Often loss of control
UBIT, legal costs
Often high cost

19. The Arms-Length For-Profit IP Manager Model
Research Institution
For Profit IP
Management
Corporation
For Profit
Spin-offs $
$ + Equity IP
Research Institution
Tech License IP $ $ IP
Research Institution $

20. The Arms-Length For-Profit IP Manager Model
Advantages
Little cost to institution
Low risk (but low return)
Arms-length deal with faculty
Ability to gain critical mass, econ of scale
Disadvantages
Low return
“Cherry picking”

21. The Future of University IP Management
University as beneficial holder/clearinghouse
University as aggressive defender of IP
Research universities united
University IP policy as a condition of employment
University IP policy and collaborative education
Universities as heavies in national and international IP law development

22. Associate Dean/Director Technology Initiatives
Gary W. Matkin
Associate Dean/Director Technology Initiatives
UC Berkeley Extension