1. I N N O V A T I O N L A W PHILIP MENDES & BRADLEY THOMAS Level 3, 380 Queen St Brisbane QLD, Australia Ph + 61 7 3211 9033 Fax + 61 7 3211 9025 Philip@innovationlaw.com.au Bradley@innovationlaw.com.au Topic 9 Establishing a Marketing Plan for Technology Commercialisation

2. Marketing Strategies What is a marketing strategy ? A plan for getting your technology commercialised Commercialisation does not just happen No one beats a path to your door competing for a license to your patent Commercialisation comes about because a strategy is implemented to Find licensing opportunities Find potential licensing partners Following slides are observations about what might be considered for a commercialisation marketing strategy That is, ways to help find a licensee for your technology

3. Deals are made between people who know each other Cold calling potential licensees rarely works Most deals done for research organisations are made between parties who already have a connection That existing connection facilitates the deal opportunity enthusiasm for the deal – to progress the path to doing the deal the making of the deal There are lots of exciting technologies People who deal with others that they already know is an edge that differentiates the exciting technology with no deal the exciting technology with a deal

4. Strategies to get to know people with whom you might do a deal Intimacy in the industry A business development manager that has networks in the industry can find deal opportunities Deal opportunities present themselves because A BDM knows that Company X has a need for certain technology Company Xs needs may not be generally known Company Xs needs may be identified because of synergy between the field it is in, and the area of research that the research organisation is in

5. Strategies to get to know people with whom you might do a deal BDMs need to Network within their industry Attend conferences, exhibitions, functions Inadequate to do it once Needs to be a constant never ending networking strategy: to go to events, to see, and to be seen, to get to know the people in the industry The longer that strategy is implemented, the more successful it will be The success of the strategy is limited only by Financial resources to travel The degree of intimacy established in networking ITLXe - toxins

6. Strategies to get to know people with whom you might do a deal Scientists also play a critical role in this networking Scientists should regularly go to the conferences in their field Conferences are attended by business development staff of biotech and pharmaceutical companies Staff of biotech and pharmaceutical companies attend conferences to see what new science is emerging Opportunities for scientists to establish rapport and relationships with business development staff from staff of biotech and pharmaceutical companies Again, must be constant strategy, inadequate to do it once HPV

7. This strategy is not devious, nor need it be selfishly pursued If its totally selfishly motivated, with a hard sell networking is unlikely to work, excellent friendships and personal relationships BDMs actively attend conferences and exhibitions, those that are identified as providing opportunities to build networks that are identified as potentially valuable Do not expect overnight results Results may take a few years to pay off Scientists Actively attend those conferences where relationships can be nurtured and rapport built Marketing plan strategy

8. Make this a strategy in a marketing plan Do not make it something that is casually applied, with unpredictable hit or miss results Systematic: Identify conferences and exhibitions Identify who should go to obtain maximum advantage Consistency go each year to renew, and reinforce relationships Ensure adequate financial resources to implement this expensive commitment Marketing plan strategy

9. Identifying potential licensees – identify people you already know When something is ready for a deal, ask Who do we know that may be interested in this More likely to do a deal with someone that you already know, rather than someone that you dont know yet What existing relationships might suggest that someone you already know may be interested What companies have existing deals been with ? What people met at conferences and exhibitions may be interested Former PhD students in industry Former colleagues in industry Who in your network that you already know may be interested Omega 3

10. People you know that can open doors Asks these questions in a wider framework Not just who do you know that may be interested in a deal More important: Who do you know that can open the door and introduce you to someone that may be interested in doing a deal That represents an even wider network of potential parties with whom the opportunity for a deal may arise Even more important Ask the person you know if they know someone else who can open the door for you That represents an even wider network

11. When a commercialisation candidate is identified: Systematically Identify everyone concerned with the technology (scientists and BDMs) Enquire whether anyone knows someone Who may be interested in the technology themselves Who may know someone who may be interested in the technology and may be able to open door Who may know another person who can open doors Again, Systematic Not casual Marketing plan strategy

12. Publications as a marketing strategy Publications and commercialisation sometimes perceived as being on a collision course Publication means disseminating, and disseminating adversely affects novelty Commercialisation perceived as needing secrecy, and that is not consistent with the publication objective. But that is too simple a view Scientists and BDMs are now much more sophisticated BDMs know that publications and peer recognition are an important driver for innovation and inventiveness, and personal satisfaction of scientists Scientists know that publication can potentially destroy the transformation of the outcomes of their research into useful and beneficial products for the community

13. Publications as a marketing strategy Both scientists and BMS therefore know that they each have to help the other achieve the objectives of both That is Both publish and commercialise Publication part of a broader commercialisation strategy Publication at the right time, in the right forum, creates deal opportunities As a marketing tool marketing opportunity Conference presentations identify emerging technologies of interest to potential industry partners Many deals are done because of deal opportunities presented by opportune publications HPV

14. Give consideration to the optimal Manner of publication Place of publication What is the best audience for the publication Is one publication option better than another Marketing Plan might consider systematic Identification of publications Identification of optimal means of dissemination Processes to accelerate or delay publication for maximum advantage Achieving publications as a marketing tool and opportunity Marketing plan strategy

15. The role of the scientist in finding leads Much folklore about the leads for licensing originating with scientists Folklore confirmed Where do the Leads for Licenses Come From Journal of the Association of University Technology Managers Volume XI (1999) http://www.autm.net/pubs/journal/99/leads.cfm Study of 1140 licenses Granted by 6 institutions: University of Florida, MIT, Oak Ridge National Laboratory, Oregon Health Sciences University, Tulane University, University of Utah These institutions vary in size, and vary in specialisation

16. The role of the scientist in finding leads Leads by scientist: 56% (range 45-67) Leads by marketing efforts from licensing staff: 19% (range 12-42) Leads by enquiry from potential licensee: 10% (range 0-17) Leads from research sponsor: 7% (range 0- 25)

17. The role of the scientist in finding leads Scientists need to be asked who they know that may be interested in their invention Invention Disclosure Form Used by research organisation as a means of Helping scientists identify their invention Assisting scientists to disclose their invention First step in the commercialisation assessment, and patenting evaluation process Inventor Disclosure form should include provision for scientist to identify Industry applications Potential licensees that may be interested Persons the scientists knows personally, or knows of, that may be interested

18. The role of the scientist in finding leads Why do scientists produce the greatest number of leads ? They have good industry contacts and large personal networks Long history of association with industry Sponsored research relationships with industry Consulting engagements by industry Networks amongst their former students Companies want to deal with scientists that are leaders in their field, particularly scientists where that leadership is demonstrated through publications Need to engage scientists not just once, but continually When Inventor Disclosure Form signed When patent search is done When patent application is filed

19. Encourage scientists: to form, expand and maintain their networks and contacts to maintain a high profile to undertaking private consulting to attend conferences to publish to get the business cards of people that they meet Enquire of scientists systematically about potential licensees that they can identify Not just once Repeatedly Marketing plan strategy

20. Consider deals other than licensing, as marketing opportunities for licensing Sometimes a marketing strategy for licensing is to do a deal other than a licensing deal Strategic Alliance with another research organisation If another research organisation has the networks to make a deal there are synergies between your own technology consider partnering with that other research organisation, making your technology available to them, and allow them to access their networks and contacts – the people that they know, to commercialise the package of your technology and theirs VIDRL

21. Consider deals other than licensing, as marketing opportunities for licensing Strategic Alliances with industry partners You dont need to wait to have your technology ready for a deal A technology in a stage of development may be appealing to an industry strategic alliance partner There may be complementary research capabilities potential synergies in the research programs of the research organisation and the potential alliance partner The deal becomes not just a license The deal instead becomes one with many features Collaborative research, scientists from both organisations working together Financing and sponsorship for research Skills acquisition And a license as well

22. Marketing plan strategy Marketing plan should identify potential strategic alliance partners Both other research organisations, and industry partners What organisations are there with synergistic research programs ? What companies are there with synergistic research programs ? What relationships already exist to tap into those opportunities ? How can they be accessed ? Constantly identify and assess new potential strategic alliance partners with whom there may be synergies

23. Research sponsorship Research sponsorship is the financial sponsorship of research by industry at a research organisation Sponsored research tends to be applied research Sponsored research is not necessarily contract research where the provider of funds owns the IP outcomes Sponsored research usually means there is a cost sharing: Research organisation may do research for direct costs (salary and consumables), leveraging off their infrastructure, foregoing seeking costs for infrastructure, and foregoing a profit component) On that basis, research organisation owns the IP outcomes, and licenses outcomes to research sponsor Reward for providing infrastructure at zero cost, and foregoing profit component is the expectation of royalties

24. Research sponsorship Research sponsorship accounting for an average of only 7% of licensing leads in AUTM survey But one respondent to the survey reported as many as 25% leads Research sponsorship is therefore an important marketing strategy By making the skills and resources of the research organisation available to industry sponsors: Direct licensing opportunities arise (up to 25%, average of 7%) Relationships are formed between scientists and industry, and those relationships indirectly lead to more opportunities (average 56%)

25. Research sponsorship Challenge is to increase the level of research sponsorship Interact with industry to Identify their needs for applied research Identify your own synergistic research capability Resist demands for the research sponsor to own the IP created in the course of the sponsored research Industry sponsor can own if it pays a market rate that takes into account indirect infrastructure costs (buildings, roads, labs, equipment, facilities, library etc), and pays a profit component Industry sponsor cannot own if it pays less than that – in that case the research sponsor should own, and license out

26. Seek out relationships with industry that can sponsor applied research Identify who they are Identify their needs Implement the strategy by forging networks and relationships with them Not likely to be an overnight response Expertise, capability, resources, and willingness to undertake applied research takes time to filter out to potential partners Perseverance pays off Marketing plan strategy

27. Know your industry space Industry Watch Patent Watch Literature Watch Newsletter Watch Press Release Watch All of these are means by which you can keep up with what is happening in the industry relevant to your science Knowing what is going on in your industry space will help identify Potential licensees who may be interested in your technology Potential strategic alliance partners Potential infringers

28. Know your industry space Patent Watch and Literature watch Keep an eye on new patents that are published Keep an eye on scientific literature to see what science others are up to Do they overlap with yours ? Would the exploitation of their patent necessarily infringe yours ? Is their invention synergistic with your own invention ? Might they be interested in A license A strategic alliance Do they infringe your patent so that they have to get a license from you ?

29. Know your industry space Newsletter Watch and Press Release Watch Specialists newsletters published regularly on industry news informing the industry about new science, new deals, etc RNAI news, Genome Web daily news BioArray News, Cell Based Assay News News services Daily email with links to press releases issued in last 24 hours containing your key words All are means to keeping informed about what is going on Identify Potential licensees Potential strategic alliance partners Potential infringers Ozgene

30. Know your industry space Industry Watch Be aware of new products and inventions that enter the market place in your space Identify Potential licensees Potential research collaborators Potential strategic alliance partners Potential infringers GE

31. Marketing plan should: Identify what to watch Industry watch Patent Watch Literature Watch Press Release Watch Newsletter Watch Who will have responsibility for watching Process of assessment and review of intelligence gathered Process of planning to maximise taking advantage of intelligence learned Marketing plan strategy

32. Infringers are potential licensees An infringer should not necessarily be perceived as a wrong doer Every infringer is a potential Licensee, or Strategic alliance partner and licensee Not every infringer knows that they are infringing The rate of change of science, particularly in biotechnology, is such that exactly the same invention may be made by different people, in close proximity in time Very possible that an infringer may not know that they are infringing your patent Infringers are the easiest target to take a license from you

33. Infringers are potential licensees Challenge is to identify infringers Industry Watch Patent Watch Literature Watch Press Release Watch Newsletter Watch Once you find an infringer, you have to do something about it Groundless threats of litigation can lead to an exposure to the patent owner that makes the groundless threat Need to be sure that your patent is valid Prudent to make no threat, but to make an infringer aware of your patent and invite a discussion about respective patent positions That starts a dialogue on whether there is an infringement, and if so, the availability of a license

34. Infringers are potential licensees Myths: That infringers are never pursued That it is not worthwhile to pursue an infringer That pursuing an infringer leads to the patent being challenged All that does happen from time to time But in the vast majority of cases a robust patent position makes it unnecessary to have to consider infringement An infringer is not necessarily someone against whom you litigate An infringer may be someone who becomes your most valuable strategic alliance partner

35. Use Industry Watch Patent Watch Literature Watch Press Release Watch Newsletter Watch to identify infringer Marketing Plan may make provision for Keeping watch on potential infringers Strategy to implement when an infringer is identified Formal approach by letter Informal approach engineered at a conference And must consider litigation as a last resort, but not exclude it altogether Marketing plan strategy

36. Appoint Marketers A Marketer is someone that goes out and markets your technology and finds licensees on a contract basis Usually for a percentage of royalties and other licensing fees Marketer is someone that you appoint because of their networks and contacts, licensing opportunities that they can find for you That is, if you dont know someone with whom to do a deal with, find someone who does Appointment of a Marketer often approached with hesitation Many people offerring services as marketers in fact do not have the networks and contacts that they say that they do But dont be deterred Many successful deals have been facilitated by contract marketers Ex-pharma executives

37. Marketing Plan might make provision for the appointment of a marketer Identify Marketers Identify their areas of expertise Undertake a due diligence on the Marketer Who have they worked for What networks and contacts would you expect them to have What deals have they successfully facilitated Identify your technologies that may benefit from the appointment of a Marketer Engage not on retainer, but on success only Marketing plan strategy

38. Direct approach – Evaluation Package A package that is sent out to multiple potential licensees Package may contain: One pager non confidential description of the technology Data sheet to substantiate claims Link to published patent (or copy) Link to published literature (or copy) Template Confidentiality Agreement or Material Transfer Agreement Letter inviting an interested recipient to evaluate the technology Identify all possible potential licensees that may be interested Identify key person in each organisation to approach Send the evaluation package Follow up with each recipient to whom it was sent

39. Direct Approach - Roadshows A roadshow is a personal presentation to potential licensees Identify licensees Confirm their interest Dont wait for the phone call asking for a license Be proactive Get on a plane and go and see all of them Arrange appointments with all of them and do a roadshow trip to the US and/or Europe to make presentations Personal presentations can quickly screen uninterested potential licensees from real candidates Interaction efficiently progresses the discussion and assessment of the science Starts the important relationship building exercise that is an important part of every deal

40. Consider Evaluation Package being sent off Particularly useful strategy if a technology where it is proposed to license many times on a non exclusive basis a technology that complements the existing technology of the recipients Should not be regarded as a first strategy Should be regarded as a strategy to employ when other strategies are inapplicable or exhausted Undertake roadshows to all potential licensees to progress an assessment and discussions Marketing plan strategy

41. Databases of available technologies Some research organisations put their technologies on their web site to identify technologies available for licensing Works if you are MIT or Stanford For others, not acknowledged as likely to lead to licensing opportunities Most research organisations dont put their technologies on their wewb site, because it isnt acknowledged as working Commercial databases: https://members.knowledgeexpress.com Databases of technologies available for licensing Has operated for some years Very much a hit and miss approach

42. Marketing Plan is a living document A Marketing Plan is not a static document It needs to be a living document This means that it must be continually reviewed, assessed, updated Strategies that are not working need to be put in the back seat (for possible later use) Strategies that are working need to be focused on New networks and relationships are formed all the time New marketing opportunities arise from those new networks and opportunities Marketing Plans Must not remain idle They must be implemented

43. Conclusion Licensing and commercialisation occurs More often between people who know each other Less often between people who dont know each other Licensees dont come knocking on your door because you might have technology interesting to them Or, dont come knocking on your door at ll The key to a successful licensing strategy is to proactively go out and expand your network the more people that you know the more likely you will find someone that will be interested in doing a deal with you