Sunday, April 3, 2011

U of M finalizes license agreement for Commerce and Search for Technology Transfer


The University of Minnesota has finalized a license agreement for Commerce and Search for Technology Transfer (CaSTT), an online tool that makes technologies available for licensing through an online database. CaSTT allows universities and research institutions to upload technology descriptions of intellectual property, which makes it easier for others to find through advanced search engine optimization (SEO). It allows users to submit inquiries about intellectual property electronically. Some nonexclusive license agreements can even be completed online. Darren Cox, CaSTT founder and chief evangelist, originally built the technology to reduce the cost of paper licensing for items such as the Minnesota Living with Heart Failure questionnaire. “We figured out that we were losing money on every license because of all of the manual processes of paper processing, so we thought there could be a better way. Then we thought, why don’t we just put it online and sell intellectual property the same way that you buy a book on Amazon?”

Cox managed the project and hired a contract development team consisting of a handful of software developers. CaSTT was developed over a six-month period two-and-a-half years ago. “What happened really shocked us,” Cox explained. “We never intended for this to be used by anybody but the U of M to solve a problem within our office … but within two weeks of turning it on we started getting contact from other major universities.” Cox incubated the project inside of the U of M for about eight months, and then he spun it out of the university and redesigned it so multiple customers can use it at a time. “We’re a few weeks away from having a completely redeveloped piece of software,” he said.
 
Although the product was initially built to market intellectual property, Cox found that there was not a lot of difference between marketing a product and marketing a startup in how you do it online. “CaSTT is used to market intellectual property. We specifically built it as a licensing tool, but we found out it’s vastly more effective as a marketing tool and licensing is an ancillary benefit of that because it’s only a small subset of hospitals or national labs that use it for licensing.”
 
The software allows potential licensees to easily find intellectual property available for license, pay for the license agreement online and either download the materials directly or, in the case of mouse models or slides, have it mailed directly. This stands in stark contrast to the oft-used but cumbersome process of finding information on a product, looking for licensing information online, playing phone tag with the other party and a lawyer, mailing a check and waiting a few weeks for processing once someone in the lab receives an order. Cox can recall one case in particular involving a technological inquiry that came through the website that had previously sat, unused, for years. “How it works and how well it works even shocked us,” he said.

Universities typically list intellectual properties on their websites in catalog form, but Cox believes the technology descriptions are a hindrance. “Tens of thousands of ideas of startups are sitting on shelves of universities, and nobody ever finds out about them because we in our industry do such a poor job of writing the descriptions in a way that Google can find them.” The software turns the optimization process into a mechanical one.

SEO is a big component of CaSTT, and part of the SEO strategy hinges on using accessible language. “First and foremost beyond anything mechanical you can do, you have to be able to write well,” Cox explained. “You have to write technology descriptions that people can understand. Some places put out technology descriptions that only 600 people on the planet can understand. The people who can understand the technological jargon and legalese are generally not the people looking to solve specific problems and actually license things. You need to learn to write better, and we had to start with the general premise that we were writing for an audience that may not understand every single term in a normal technology abstract.”

Using SEO strategies to optimize content for Google is very different from the oft-used strategy of listing intellectual property outside of the university on a third-party website, but Cox rejects the notion that the latter is the best approach. “iBridge and other technology aggregators’ premise is that instead of being able to do a Google search and find things like the rest of the world does, you should magically learn about some other website that holds a tiny little subset of the total of intellectual property in the world and you’re going to use that instead, you’re going to narrow your field so that you can only find intellectual property in a few hundred schools primarily in the U.S. I think if you asked Medtronic or Hewlett Packard or General Electric when they have a great idea and it’s protected, do they care if it came from Cleveland Clinic or somewhere in China? Most of the time if it is valuable, they don’t really care.”

Cox gave an example of how the software works. “About nine months ago, a researcher commercialized an implantable medical device that he developed,” he explained. The process involves sending in an intellectual property disclosure form to the technology transfer office, disclosing it to the office and then patenting it. The office then determines how to let people know it is available in case someone wants to start a company based on this product, or a big company wants to buy it.

“We put it on the site and within 24 hours we got an inquiry. And what was unique about it was that it was just a guy and he asked some questions that seemed like they were not the right questions for someone wanting to buy a medical device. It turns out he owns a western Pennsylvania holding company that produces farm machinery and a plastics manufacturing plant. This product happened to be made of some new kind of plastic.” The man was also a convenience store owner who happened to have a friend who was a surgeon and another friend who sells medical devices. Since he already knew how to manufacture plastic and had a seller in mind, he thought purchasing the device would be lucrative.

“That’s the holy grail of IP licensing, is to offer this technology to people we don’t know anything about,” Cox said. “These offices call people in big companies to try to sell things; it’s usually kind of a yes or no decision, but what happens to the 7.5 billion other people in the world that we don’t know about? Someone who owns convenience stores may not be considered a candidate to buy a medical device, but he was.”

Using the software, the U of M Office for Technology Commercialization executed more paid commercial licenses for a single piece of intellectual property than all of the Big Ten universities combined sold for all of their intellectual property in 2008.
The new version of CaSTT, which will be out before the end of April, will cost $500 a month or $6,000 a year. CaSTT is being marketed to universities, national labs and research hospitals, but industry is also in the picture. “We’re in talks right now with some pretty heavy hitters in corporate America,” Cox said.
The company will not take a percentage of revenue from the transactions.

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