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

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Presentation on theme: "Spinning Off in the U.S. Dr. Gary W. Matkin Associate Dean University Extension University of California, Berkeley."— Presentation transcript:

1 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

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

7 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 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 Taking Equity Model

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

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

12 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 Non-Profit Buffer Model

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

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

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

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

17 For Profit Alternative Five Research Institution A Research Institution B For Profit Spin-off License Equity Investor(s)New For Profit Venture 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 Spin-offs Tech License Research Institution For Profit IP Management Corporation IP $ $ $ $ + Equity IP $

20 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 The Arms-Length For-Profit IP Manager Model

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


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