Navigating R&D Commercialization
Navigating R&D Commercialization
Table of Contents
Table of Figures ............................................................................................................................................. 3
1.
2.
3.
Background and Introduction ............................................................................................................... 4
1.1.
Strategic Goals .............................................................................................................................. 4
1.2.
Purpose of the Handbook and Workshop Objectives................................................................... 4
What Is R&D Commercialization? ......................................................................................................... 6
2.1.
Characteristics of R&D Commercialization ................................................................................... 7
2.2.
Technology Readiness Levels ........................................................................................................ 9
Who does R&D Commercialization? ................................................................................................... 12
3.1.
Overview of Jordan’s National Innovation System ..................................................................... 12
3.2.
Roles in Commercialization ......................................................................................................... 14
4.
Overview of the Technology Lifecycle ................................................................................................ 17
5.
The Process of R&D Commercialization.............................................................................................. 19
5.1.
Step 1: Select the Innovation ...................................................................................................... 19
5.2.
Step 2: Evaluate the Innovation .................................................................................................. 20
5.3.
Step 3: Protect the Intellectual Property .................................................................................... 21
5.4.
Step 4: Develop a Commercialization Strategy ........................................................................... 23
5.5.
Step 5: Finance the Commercialization ...................................................................................... 25
5.6.
Step 6: Launch the Commercialization ....................................................................................... 27
6.
Challenges and Barriers to R&D Commercialization ........................................................................... 28
7.
Tips and Techniques from Experienced Commercializers .................................................................. 30
8.
Case Studies ........................................................................................................................................ 32
9.
8.1.
Solix Biofuels ............................................................................................................................... 32
8.2.
PetroAlgae................................................................................................................................... 33
8.3.
Aurora Biofuels ........................................................................................................................... 34
References/Resources ........................................................................................................................ 35
Appendix 1 .................................................................................................................................................. 40
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Navigating R&D Commercialization
Table of Figures
Figure 2.1 Patenting Activity by Jordanian Innovators ................................................................................. 8
Figure 2.2 Jordan’s Patent Trends, 2000-2007 ............................................................................................. 8
Figure 2.3 Technology Readiness Levels ....................................................................................................... 9
Figure 2.4 Commercialization Readiness Level Assessment ....................................................................... 11
Figure 3.1 Organizations Involved in Innovation ........................................................................................ 13
Figure 3.3 Roles in Commercialization ........................................................................................................ 15
Figure 4.1 Phases in Technology Lifecycle .................................................................................................. 17
Figure 5.1 R&D Commercialization Process ................................................................................................ 19
Figure 5.2 Assessments Determine Commercialization Potential .............................................................. 21
Figure 5.3 Three Paths to Commercialization ............................................................................................. 24
Figure 8.1 PetroAlgae’s Patent Applications............................................................................................... 33
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USAID Jordan Economic Development Program (SABEQ)
Navigating R&D Commercialization
Navigating R&D Commercialization:
A Workshop for Jordanian Researchers
1. Background and Introduction
If your research produced a technology with commercial potential, how would you go about bringing
it to market? This handbook and accompanying workshop are designed to provide guidance for
commercializing university research. This handbook provides a roadmap for commercializing a
technology, covering various topics from the commercialization process to tips and techniques. The
focus is on the university researcher. Upon completion, the researcher will be ready to consider
commercializing his or her research.
1.1. Strategic Goals
USAID Jordan Economic Development Program (SABEQ) was designed to improve the
competitiveness of sectors of the Jordanian economy. The program is focused on three broad
initiatives: (i) inserting Jordan into global value chains; (ii) developing an innovation cluster in energy,
water, and environment (EWE) productivity; and (iii) catalyzing regional investment. The EWE
productivity innovation cluster initiative was adopted as an opportunity to engage Jordanian
innovation and technical capacity to respond to the challenges facing Jordan in scarcity of water and
energy resources and the impact of energy and water use on the environment. More specifically,
and in relation to the topic in hand, the capacity building of researchers in the area of research and
development (R&D) commercialization increases researchers capacity to properly develop
technologies and bring them to market addressing acute regional needs and global demand for
green products.
Universities and research institutes in Jordan lack capacity in the area of R&D commercialization.
This capacity gap prevents researchers from securing funding for core research, including in
renewable energy and water technologies, and limits their ability to lead technologies to market that
ultimately create wealth and jobs within Jordan. SABEQ assistance as committed under the
memorandum of understanding (MoU) signed with the Higher Council for Science and Technology
(HCST) helps in strengthening the capacities of Jordanian researchers in securing funds for core
research and ultimately bringing technologies to market.
1.2. Purpose of the Handbook and Workshop Objectives
The purpose of this training handbook is to provide the basis for a one-day workshop on R&D
commercialization. The target audience is Jordanian scientists and engineers interested in improving
their success with the commercialization of university research. These individuals have had little
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Navigating R&D Commercialization
prior experience in commercializing R&D and will be able to apply new learning to build expertise
and improve past experience.
There are three primary objectives of the handbook. The first is to understand the process of R&D
commercialization. This includes an introduction to the various participants in R&D
commercialization and an overview of the technology lifecycle. This also includes learning the stepby-step process for R&D commercialization. The second is to learn tips and techniques to increase
success and shorten timelines. This includes understanding the characteristics of successful
commercialization, as well as becoming familiar with the challenges and barriers to
commercialization. It will also incorporate lessons learned from seasoned R&D commercializers.
The third is to broaden participant knowledge so that he or she may in turn teach the key points of
the workshop at his or her home organization. This concept is called “train-the-trainer.” Ideally,
researchers will take these materials and continue to develop them based on their own experience.
Throughout this handbook, there will be illustrations, exercises, and examples/case studies to
encourage participation and make the workshop more interactive. In turn, participants are welcome
to share their experiences in R&D commercialization so that the rest of the group may benefit. In
that vein, here is the first exercise:
Exercise 1: What do you hope to learn about R&D commercialization?
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2. What Is R&D Commercialization?
University research is valuable for several reasons. It enlarges and enhances our body of knowledge.
It trains future scientists and engineers. It also has economic impact. University research produces
discoveries and technologies that have practical application. Research outputs have the potential to
solve some of our hardest problems. Because of its potential, university research must not be
confined to the lab. It must be transformed in a way to benefit society. Commercialization is the
method by which university research finds its way to the marketplace and to society more broadly.
This section will define and describe commercialization and introduce a tool for evaluating readiness.
R&D commercialization is the process of taking a research idea and bringing it to market. It is a
multistep process for transitioning research from the lab to the market, which will be detailed in
Section 5. The process takes time and investment, both of which may run out before the effort is
complete. Commercialization is a difficult process and the outcome is not guaranteed, but the
potential success makes the effort worthwhile.
The goal of commercialization is to extract value from intellectual capital. Universities,
governments, and other funding sources invest significant resources in university-based research.
While not every line of research has commercialization potential, it is important to guide those that
do to the market. Researchers or other owners stand to benefit from the profits of a
commercialized technology. Even if the technology does not turn a profit, society stands to benefit
from the advancement being widely available.
Commercialization is important to all economies, but to developing economies in particular.
Innovation is a key engine of economic growth. Unlocking the value of university research can help
propel a developing economy. As countries transform from manufacturing- and service-based
economies to knowledge economies, releasing the value of research and development through
commercialization is a significant boost.
R&D commercialization is important to Jordan for several reasons. It has the potential to create
revenue streams for researchers and universities. It has the potential to create new businesses and
new jobs. It also has the potential to improve some of the problems Jordan is facing. In the case of
energy, water, and environment productivity, research commercialization has the potential to
address these issues with a product that can also be sold both within Jordan and globally. The
following exercise will assess researchers’ familiarity with commercialization.
Exercise 2a: Describe an R&D commercialization success story.
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Exercise 2b: Describe an unsuccessful R&D commercialization effort.
Exercise2c: What were the differentiators?
2.1. Characteristics of R&D Commercialization
The full impact of R&D commercialization is difficult to characterize, but there are some metrics that
can give a sense of the scope of commercialization. Typically, university commercialization can be
measured by invention disclosures, patenting activity (applications and grants), licenses (number
executed and revenues), and new companies (start-ups). A researcher will provide an invention
disclosure to notify his or her university of an invention. It is an internal university document. A
patent is a legal form of intellectual property protection. The number of applications filed and
number of applications granted are two indicators tracked by both the patent office and university.
The owner of a technology can give others permission to use it with a license and for a fee. Often
the only way to commercialize a technology is to start a new company. Invention disclosures and
patenting are output indicators of the commercial potential of university research, while licensing
and new companies indicate the level of use of university research by firms.1
Compiling a commercialization profile for Jordan’s university research was hampered by the lack of
available data. Patenting activity is the only data available. Figure 2.1 highlights the patenting
activity of Jordanians at home, in the United States and Europe, and worldwide. Figure 2.2 depicts
national patenting activity over an eight-year period. The trends are fairly constant with an upward
trend in international applications in the last two years.
1
Anthony Arundel and Catalina Bordoy, UNU-MERIT, Maastricht, The Netherlands, “Developing Internationally
Comparable Indicators for the Commercialization of Publicly-Funded Research,”
<http://www.merit.unu.edu/archive/docs/hl/200610_200610_arundel_bordoy.pdf>.
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Figure 2.1 Patenting Activity by Jordanian Innovators2
Patents registered in Jordan a
-Registered to Jordanians b
U.S. patents granted to Jordanians
U.S. patent applications filed by Jordanians, but not yet granted c
European patents granted to Jordanians
International registrations
Notes:
2486
240
9
9
84
40
a
1948 to January 2009.
This is an approximate number as nationality is not always clear.
c Since 2001.
b
Figure 2.2 Jordan’s Patent Trends, 2000-20073
Year
2000
2001
2002
2003
2004
2005
2006
2007
Total
2
3
National
Applications
71
52
21
25
42
49
75
59
394
International
Applications
127
147
117
157
141
169
428
507
1793
National
Patents
12
-----13
8
4
9
10
23
79
International
Patents
59
-----16
39
56
46
50
40
306
Total Granted
Patents
71
----29
47
60
55
60
63
385
Dr. Wissam Rabadi, email, 26 August 2009.
Jordan Ministry of Industry and Trade, “Statistics,” <http://www.mit.gov.jo/tabid/465/Statistics.aspx>.
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2.2. Technology Readiness Levels
As a researcher begins to consider how to transfer his or her technology from the university and into
the marketplace, one tool to frame the thinking is technology readiness levels. Technology
readiness levels, or TRLs, describe the maturity of a technology using a 1 through 9 scale. Each level
is defined in Figure 2.3, where 1 is the least mature and 9 is the most mature. TRLs were originally
developed by the United States National Aeronautics and Space Administration (NASA) and later
adopted by the U.S. Department of Defense.4 TRLs are used by U.S. government programs to
evaluate the risk of incorporating a new technology into a system. It makes comparing technologies
easier, as they can be baselined against the same scale. It also provides a common language for
describing technology maturity, as the research and development lexicon has various terms to
describe the progression of research.
Figure 2.3 Technology Readiness Levels5
Technology Readiness Level
1. Basic principles observed and
reported.
2. Technology concept and/or
application formulated.
3. Analytical and experimental critical
function and/or characteristic proof of
concept.
4. Component and/or breadboard
validation in laboratory environment.
5. Component and/or breadboard
validation in relevant environment.
6. System/subsystem model or
prototype demonstration in a relevant
environment.
Description
Lowest level of technology readiness. Scientific research
begins to be translated into applied research and
development. Examples might include paper studies of a
technology’s basic properties.
Invention begins. Once basic principles are observed,
practical applications can be invented. Applications are
speculative and there may be no proof or detailed analysis
to support the assumptions. Examples are limited to
analytic studies.
Active research and development is initiated. This includes
analytical studies and laboratory studies to physically
validate analytical predictions of separate elements of the
technology. Examples include components that are not yet
integrated or representative.
Basic technological components are integrated to establish
that they will work together. This is relatively “low fidelity”
compared to the eventual system. Examples include
integration of “ad hoc” hardware in the laboratory.
Fidelity of breadboard technology increases significantly.
The basic technological components are integrated with
reasonably realistic supporting elements so it can be tested
in a simulated environment. Examples include “high
fidelity” laboratory integration of components.
Representative model or prototype system, which is well
beyond that of TRL 5, is tested in a relevant environment.
Represents a major step up in a technology’s demonstrated
readiness. Examples include testing a prototype in a highfidelity laboratory environment or in simulated operational
4
Wikipedia, “Technology Readiness Levels,” <http://en.wikipedia.org/wiki/Technology_readiness_level>.
U.S. Department of Defense, “Appendix 6: Technology Readiness Levels and Their Definitions,” Mandatory
Procedures for Major Defense Acquisition Programs (MDAPS) and Major Automated Information Systems
(MAIS) Acquisition Programs, DoD 5000.2-R, 05 April 2002, pp. 204-205,
<http://www.acq.osd.mil/ie/bei/pm/ref-library/dodi/p50002r.pdf>.
5
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Technology Readiness Level
7. System prototype demonstration in
an operational environment.
8. Actual system completed and
qualified through test and
demonstration.
9. Actual system proven through
successful mission operations.
Description
environment.
Prototype near, or at, planned operational system.
Represents a major step up from TRL 6, requiring
demonstration of an actual system prototype in an
operational environment such as an aircraft, vehicle, or
space. Examples include testing the prototype in a test bed
aircraft.
Technology has been proven to work in its final form and
under expected conditions. In almost all cases, this TRL
represents the end of true system development. Examples
include developmental test and evaluation of the system in
its intended weapon system to determine if it meets design
specifications.
Actual application of the technology in its final form and
under mission conditions, such as those encountered in
operational test and evaluation. Examples include using
the system under operational mission conditions.
TRLs are one attribute of a technology that can indicate how soon it can be commercialized. If a
technology has a TRL of 9, it is fully mature. The time it would take to commercialize is short, if it has
not already occurred. A technology with a TRL of 5 or 6 would take a lot longer to commercialize. A
TRL of 1 or 2 has the longest way to go. In the United States, industry typically uses technologies
with higher TRLs than the government. In other words, industry waits for technology development
to near completion before it begins product development.6
The TRL methodology has proven so useful that it has been adapted to define other types of
“readiness” levels. For example, there are now Manufacturing Readiness Levels, or MRLs, that
characterize the readiness of a technology for manufacturing.7 Commercialization readiness levels
(CRLs) are starting to enter the lexicon. NASA has recognized commercialization readiness and uses
it to determine “whether the technological asset’s technical maturity can be sufficiently advanced
such that the level of risk is acceptable to a commercial technology partnership.”8 Simply, CRLs
highlight how ready a technology is for the market. In Figure 2.4, the intersection of a technology’s
commercial potential (likelihood of success) and its commercial readiness (time to reach the market)
provides a commercialization readiness level. CRLs are defined as high, medium, and low. For
example, if a technology has a high commercial potential, but a low commercial readiness, its CRL
will be rated as medium.
6
United States General Accounting Office, “Best Practices: Better Management of Technology Development
Can Improve Weapon System Outcomes,” GAO/NSIAD-99-162, July 1999,
<http://www.gao.gov/archive/1999/ns991620.pdf>.
7
Defense Acquisition University, “Assessing Manufacturing Risk,”
<https://acc.dau.mil/CommunityBrowser.aspx?id=18231>.
8
National Aeronautics and Space Administration, “NASA Technology Commercialization Process,” NPR 7500.1,
20 December 2001,
<http://nodis3.gsfc.nasa.gov/displayDir.cfm?Internal_ID=N_PR_7500_0001_&page_name=Chp3>.
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Figure 2.4 Commercialization Readiness Level Assessment9
TRLs (and MRLs and CRLs) may assist the researcher in evaluating a commercialization attempt. TRLs
indicate how ready the technology is to be incorporated into a larger system. For example, if the
research project is for a component of a solar technology, the researcher can evaluate how ready it
is to be incorporated into a complete solar technology system. Researchers should determine TRLs
for their technologies and begin to think about how they would define “commercialization readiness
levels” for the same technologies.
9
National Aeronautics and Space Administration.
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3. Who does R&D Commercialization?
It takes various stakeholders to commercialize a technology. R&D commercialization is the result of
the complex interplay of academia, industry, and financial resources. It takes the combined talents
of university researchers, entrepreneurs, and investors to take a research idea and make it
successful in the market. In this section, the key institutional and individual actors in
commercialization are introduced.
3.1. Overview of Jordan’s National Innovation System
The structure and organization of a national innovation system has an important effect on
commercialization. It is defined as the “set of institutions whose interactions determine the
innovative performance…of national firms.”10 The main institutional actors in Jordan’s national
innovation system are described below. They can be grouped into the following five categories:
policy development and public administration, industry and its representatives, research centers,
academia, and entrepreneurship support programs and technology business incubators.11 Figure 3.1
highlights organizations in each of the categories.
Several key organizations are grouped in policy development and public administration. They
provide oversight and funding for research and development. These include the Higher Council for
Science and Technology (HCST), the Ministry of Higher Education and Scientific Research, the
Ministry of Industry and Trade (MIT), and the Ministry of Planning and International Cooperation.
HCST is responsible for setting policy and developing strategies, as well as supporting R&D projects
and programs. MIT oversees intellectual property rights such as patent registration.
In the category of industry and its representatives, these organizations are profit-motivated and sell
end products. They are large businesses and small and medium enterprises. This category also
includes business and professional associations that represent the interests of their business
members. The Amman Chamber of Industry is an example of a business association; the Jordan
Engineers Association is an example of a professional association.
The next two categories are research centers and academia. Research centers execute research and
development, typically funded by others. There are eight research centers affiliated with HCST, and
several other independent ones such as the Royal Scientific Society. Academia refers to institutions
of higher education, such as Jordanian universities, both public and private. These institutions fund
and execute research and development, but may also receive external funding. They also educate
future scientists and engineers that will participate in any of the R&D organizations.
The last category is entrepreneurship support programs and technology business incubators. This is
a unique category in that these organizations help to bridge gaps among the other four groups of
organizations. These groups typically provide services to entrepreneurs and start-ups to grow a
10
Richard R. Nelson and Nathan Rosenberg, “Technical Innovation and National Systems,” Richard R. Nelson,
ed., National Innovation Systems: A Comparative Analysis, New York: Oxford University Press, 1993, pp. 3.
11
Medibtikar, “Group of Actors,” 03 January 2007, <http://www.medibtikar.eu/-Group-of-Actors,98-.html>.
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successful business around a technology. Services can include assistance with administrative, legal,
technical, financial, and other issues. Investors are also included in this group.
Figure 3.1 Organizations Involved in Innovation12
Category
Policy Development and Public
Administration
Industry and its Representatives
Research Centers
Academia
Organizations
-Higher Council for Science and Technology
-Ministry of Higher Education and Scientific Research
-Ministry of Industry and Trade
-Ministry of Planning and International Cooperation
-Large businesses
-Small and medium enterprises
-Business associations (e.g., Amman Chamber of Industry)
-Professional associations (e.g., Jordan Engineers Association)
HCST Affiliated
-The National Center for Human Resources Development
(NCHRD)
-The National Center for Diabetes Endocrine and Inherited
Diseases (NCDID)
-National Energy Research Center (NERC)
-The National Virtual Center for Biotechnology (NVCB)
-Jordan Center for Public Policy Research & Dialogue (JCPPRD)
-Jordan Badia Research and Development Center (JBRDC)
-National Network for Advanced Materials and NanoTechnology (NNAMNT)
-Regional Human Security Center (RHSC)
-The Environment Monitoring & Research Central Unit
(ENMARCU)
Other
-The Royal Scientific Society
-National Center for Agricultural Research and Technology
Transfer (NCARTT)
-Pharmaceuticals Research Unit (PRU)
Public
-The University of Jordan
-Jordan University for Science and Technology (JUST)
-Yarmuk University
-Mu'tah University
-Hashemite University
-Al Al Bayt University
-Al Hussien Bin Talal University
-AlBalqa Applied University
-Tafila Technical University
-The German-Jordanian University
Private
-University of Petra
-Al Ahliyya Amman University
12
Higher Council for Science and Technology, “Science & Technology and Innovation Profile of Jordan,”
Prepared for Evaluation of Scientific and Technological Capabilities in Mediterranean Countries (ESTIME), 10
October 2006, <http://www.estime.ird.fr/article197.html>.
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Category
Entrepreneurship Support
Programs and Technology
Business Incubators
Organizations
-Princess Sumaya University for Technology
-Jarash Private University
-Irbid National University
-Zerqa Private University
-Al Isra'a Private University
-Applied Science Private University
-Al-Zaytoonah University
-Amman Arab University For Graduate Studies
-Philadelphia University
-Jordan Applied University College of Hospitality & Tourism
-The National Consortium for Technology and Incubation of
Business (NACTIB)
-Information & Communication Technology Business Incubator
(iPARK)
-Jordan Innovation Centre for Engineers and Industrial
Enterprises at Royal Scientific Society
-Agro-industries Business Incubator (Jordan Innovation Center)
-The Intellectual Property Rights unit of HCST
-The Industrial Scientific Research and Development Fund
(ISRDF)
-National Fund for Enterprises Support (NAFES)
-Enterprise Productivity Centers (EPCs) IRADA
-Jordan Upgrading and Modernization Programme (JUMP)
-Other programs funded by Ministries and foreigners
-Queen Rania Center for Entrepreneurship (Technology
Commercialization Program)
-Royal Scientific Society Technology Transfer Center
3.2. Roles in Commercialization
While the breadth of Jordan’s national innovation system provides the larger context, it is important
to understand the perspective of the individual researcher. Who are the key players that a
researcher will need to interface with as he or she seeks to commercialize his or her technology?
Figure 3.3 illustrates the individual roles that are relevant to commercialization and they are
described below.
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Figure 3.2 Roles in Commercialization
The researcher plays the most important role in commercialization. He or she is the most likely to
identify the commercial potential of a technology. Even if the researcher cannot envision the
commercial applications, he or she may attract the interest of others who can. In addition to
identifying the commercial potential, the researcher may also initialize the commercialization
process and see it through fruition.
Because researchers are typically affiliated with a university or research center, they will need a
company to continue the commercialization process. Universities are typically not in the end-to-end
commercialization business. Researchers may transfer their technology to an existing company or
form a new company, a start up, for the purpose of commercializing the technology. Companies will
fully commercialize a technology into a product that can be sold in the market.
The end user is the consumer of the fully commercialized technology. All of the other actors should
keep the needs and wants of the end user at the forefront of their commercialization strategy. If the
consumer won’t buy or use the end product, then the technology is not a good candidate for
commercialization.
Investors play a supporting and significant role in commercialization. They provide the funding to
start or grow a business to commercialize a technology. They not only provide financial resources,
but also provide business acumen for a profitable venture. Investors can take various forms,
including individuals, companies, programs, funds, etc.
In the American model of innovation, the technology management office plays a role in
commercialization. Technology management offices (TMOs) are part of a university organization.
Their function is to manage the university’s technology portfolio. Technology transfer office is
another term, which can refer to university or government offices that perform the same function,
as is knowledge transfer office. TMOs assist researchers with identifying novel technologies,
applying for intellectual property protection, starting new companies, and marketing technologies to
companies looking for a new venture. They provide a key interface between researchers and
businesses.
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These five roles are not an exhaustive list, but provide a starting point for thinking about who is
important in R&D commercialization. Each technology will have a specific set of actors in its
commercialization process. It is up to the researcher to begin identifying them. The following
exercise checks researchers’ knowledge of their stakeholders.
Exercise 3: Who are the stakeholders for renewable energy technologies? Brainstorm the
stakeholders and their perspectives.
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4. Overview of the Technology Lifecycle
The technology lifecycle refers to the typical phases that a technology passes through from its
conception as an idea to being turned into an end product. This is the broader lifecycle, where
commercialization is just one component. The typical phases in the technology lifecycle are basic
research, applied research, development, and commercialization as illustrated in Figure 4.1.
Figure 4.1 Phases in Technology Lifecycle13
The above terms are defined by the U.S. government as:



“Basic research is defined as systematic study directed toward fuller knowledge or
understanding of the fundamental aspects of phenomena and of observable facts without
specific applications towards processes or products in mind.
Applied research is defined as systematic study to gain knowledge or understanding
necessary to determine the means by which a recognized and specific need may be met.
Development is defined as systematic application of knowledge or understanding, directed
toward the production of useful materials, devices, and systems or methods, including
design, development, and improvement of prototypes and new processes to meet specific
requirements.”14
This lifecycle is also known as the linear model of innovation. The linear model is an
oversimplification, because research and development is a complex process. Research and
development stops, starts, takes wrong turns, has dead ends, and, sometimes, results in a new
technology. There are also numerous feedback loops between the phases.15 For example,
discoveries and improvements made down the line in development can be fed back into earlier
phases.
Industry and academia have varying levels of participation in each of the phases. Academia’s
participation in the technology lifecycle typically fades out in the middle of this process. Industry
13
Charles W. Wessner, ed., National Research Council, SBIR and the Phase III Challenge of Commercialization:
Report of a Symposium, Washington, D.C.: National Academies Press, 2007, pp.68,
<http://www.nap.edu/catalog.php?record_id=11851>.
14
Office of Management and Budget, Circular A-11, 2008,
<http://www.whitehouse.gov/omb/circulars/a11/current_year/s84.pdf>.
15
Charles W. Wessner, National Research Council, “The Twenty-First Century University: Innovation & the
Commercialization of University Research,” Briefing, Knowledge Economy Forum IV, Istanbul, Turkey, 23
March 2005, pp. 7,
<http://siteresources.worldbank.org/INTECAREGTOPKNOECO/Resources/CharlesWessner.ppt>.
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starts to step in as technologies get closer to their final, marketable form. This is not a smooth
handoff. It takes continued funding to maintain momentum through the lifecycle. Sometimes there
is a funding gap between government-sponsored research and industry’s uptake of the technology
for remaining development. This is called the “valley of death.”
The valley of death, as its name implies, is where innovations don’t make it any further in their
development. There may be other reasons for the lack of progression other than funding, but that is
typically the case. Renewable energy technologies can be particularly capital intensive, such as
building solar plants, wind farms, or biodiesel facilities.16 There is a claim that the valley of death is
getting wider—i.e., getting more difficult to get private funding—for renewable energy technologies
because of the credit crisis.17
While academia as a whole will participate less as the march towards commercialization progresses,
individual researchers may have variable experiences. University researchers may end their
involvement with basic research or applied research. Only a few academic entrepreneurs will be
involved through commercialization.
This overview of the technology lifecycle illustrates the buildup towards commercialization. The
next section describes the step-by-step process of how university researchers can make it happen.
16
Nichola Groom, “Investors Take on Green Energy’s ‘Valley of Death,’” Reuters, 14 April 2008,
<http://www.reuters.com/article/reutersComService4/idUSN1428292820080417>.
17
“’Valley of Death’ for Low Carbon Technologies Is Widening,” Commodities Now, 23 June 2009,
<http://www.commodities-now.com/news/environmental-markets/190-valley-of-death-for-low-carbontechnologies-is-widening.html>.
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5. The Process of R&D Commercialization
The commercialization of university research is a process unique to each technology.
Commercialization takes research and turns it into an end product, but there may be many avenues
to accomplish this task. While there are some common steps in the commercialization process, the
many variables will make each commercialization attempt appear very different.
This section will outline the usual steps in R&D commercialization. The six major steps are shown in
Figure 5.1. They are: select the innovation, evaluate the innovation, protect the intellectual
property, develop a commercialization strategy, finance the commercialization, and launch the
commercialization. Although they are illustrated in a serial fashion, some steps may be completed in
parallel or in a different order. Further, not every commercialization attempt will complete all of the
steps. A researcher may exit the commercialization process at any point where it no longer makes
sense to proceed. Each of the six steps will be discussed in the following sections.
Figure 5.1 R&D Commercialization Process
5.1. Step 1: Select the Innovation
The initial step in R&D commercialization is to select the innovation to be commercialized. The first
of three tasks is to identify the key innovation from the research results. What is the novel outcome
of the research? Research can produce a range of results, not all of which have commercial
potential. While this step may appear obvious, it is worthwhile to spend some time bounding or
narrowing down the research results to the key technology to carry forward in this process.
Once the researcher has made a choice, the second task is to gather up relevant documentation.
The researcher should already have some preliminary documentation in place through research
proposals, laboratory notebooks, and other records. It is important to identify the items that will be
needed in subsequent commercialization steps, such as market evaluation or intellectual property
protection. Here is a list of questions that will help assemble the key details:






What is the name or title of the innovation?
What is a description or summary of the innovation?
What is novel or unique about the innovation?
Why is it valuable?
What are the benefits of the technology?
What are the advantages over similar technologies?
The last task is for the researcher to communicate the innovation and the intent to commercialize to
his or her leadership. At the university, this would mean sharing the innovation with department
heads and others in the organization that would have an interest in research commercialization. If a
technology management office is established, the researcher would contact the office and work with
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the staff. A formal method for this communication is an invention disclosure.18 This is a form
designed by the university to capture basic information about the invention, such as who the
inventors are, details about the invention, the source of funding for the research, and any
publications or public disclosures about the invention. Is may also ask the researcher to make some
assessments about the invention, which will be discussed next.
5.2. Step 2: Evaluate the Innovation
The second step in R&D commercialization is to evaluate the technology from various angles. The
readiness and potential of the technology will be assessed, which will assist in decision making and
mapping a course of action. This evaluation can be conducted by the researcher or technology
management office. There are three types of evaluations.
The first evaluation is to determine the maturity of the technology. Using the technology readiness
levels (TRLs) discussed earlier or another method, the researcher should establish the maturity of
the technology. This will give a sense of the time and resources necessary to fully develop the
technology into a proven end product. Another part of this evaluation is to understand the technical
feasibility of the application. Can the technology be translated into a marketable end product?
The second evaluation is of the market potential of the technology. This market assessment will
examine both supply and demand of the end product. What need does it fill? From the demand
side: Who are the potential buyers of the technology and what quantities might they purchase?
How does demand look now and in the future? From the supply side: Is there a firm(s) that can
manufacture and sell the end product at a price that covers costs and provides a return? This
evaluation will give a sense of the scope of the market and potential profits.
The third evaluation is of the patentability of the technology. Patentability refers to the ability to
protect the innovation with a patent or other intellectual property right. Patents are issued under
certain conditions. They are industrial applicability (utility or usefulness), novelty (no prior art), and
non-obviousness.19 To make sure there is no prior art, the researcher should perform a literature
search for related papers or citations. The researcher should also perform a search of various patent
databases, both domestically and internationally, such as the Jordanian Ministry of Industry and
Trade, the World Intellectual Property Organization, and the United States Patent and Trademark
Office. This evaluation will give a sense of how exclusive the technology is, and therefore how
profitable.
18
Many samples can be located by searching on “invention disclosure form.”
WIPO, “Understanding Industrial Property,” pp. 6,
<http://www.wipo.int/freepublications/en/intproperty/895/wipo_pub_895.pdf>.
19
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Figure 5.2 Assessments Determine Commercialization Potential
The assessments of maturity, marketability, and patentability will determine the commercialization
potential of the technology. See Figure 5.2. Based on the results of each assessment, the researcher
will decide whether and how to proceed with commercialization.
5.3. Step 3: Protect the Intellectual Property
The third step in R&D commercialization is to protect the intellectual property rights to the
innovation. The innovation has value and it is important to establish who has the right to capitalize
on that value. A significant investment has been made in the research and research institutions are
incentivized to recoup the investment and any additional returns. There are three tasks in this step.
The first task is to determine the type of protection. There are several ways to protect intellectual
property, including patents, trademarks, copyrights, and trade secrets. When it comes to
commercializing research, patents and trade secrets are the most relevant. The United States Patent
and Trademark Office defines a patent as “the grant of a property right to the inventor.”20 It
typically lasts for a fixed period of time—it is 20 years in Jordan.21 In exchange for a patent, the
technology is disclosed, which is the opposite of a trade secret. A trade secret is a technology that is
not disclosed by its owner. Keeping a technology a secret confers an advantage to an organization
over its competitors. Think of food or beverages that are made with a “secret recipe” or “secret
sauce.” Non-disclosure agreements are the mechanism for maintaining confidentiality.
The second task is to determine where to protect the intellectual property. This will establish where
and how patent applications are filed. Intellectual property is regulated at the national level. In
Jordan, oversight for patents is provided by the Ministry of Industry and Trade and oversight for
20
United States Patent and Trademark Office, “General Information Concerning Patents,” Revised January
2005, <http://www.uspto.gov/web/offices/pac/doc/general/index.html#ptsc>.
21
Ministry of Industry and Trade, “Patent Law,” Article 17,
<http://www.mit.gov.jo/portals/0/tabid/507/patent%20law.aspx>.
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copyrights is provided by the Ministry of Culture.22 The World Intellectual Property Organization
(WIPO), a United Nations body, is a venue for harmonizing patent law among countries. It also
offers an international registration system for intellectual property, where a researcher can fill out
one application and receive patent protection in multiple countries.23 Jordan is not a signatory to
the Patent Cooperation Treaty, so simultaneous application for patents in other countries is not
possible through its patent office.24
The third task is to complete and file the patent application. In Jordan, Article 8 of the Patent Law
details the procedure for filing a patent application, which costs 50 Dinars.
1. A patent application shall be submitted to the Registrar with the detailed description
of the invention. The description shall disclose the invention in a manner sufficiently
clear and complete for it to be carried out by a person having ordinary skill in the art
while stating the best mode for carrying out the invention known to him on the
application date or the priority date.
2. The patent owner shall file complete particulars on the applications on the same
patent subject matter which he filed in other countries including the results of such
applications. If applications relating to biologic substances or microorganisms are
filed, the applicant shall submit a proof that he filed specimen to one of the
specialized centers.
3. The application shall be accompanied by a statement justifying the applicant’s right
to the patent.
4. The application shall determine the claims which the applicant wishes to protect.
The claims shall be concise and clear and be fully supported by the whole description,
and the drawings may be used in interpreting the claims.
5. The application shall include an abstract of the patent specification, and the new
elements to be protected, inventor’s and applicant’s names and addresses, for the
purposes of publication in the Official Gazette25.
The detailed list of documents to be included in the patent application is found in the Patent
Regulations.26
It is important to file for a patent early in the commercialization process. The patent goes to the
party that files first. Further, there are certain events that impact patentability, such as first
22
World Intellectual Property Organization (WIPO), “WIPO Guide to Intellectual Property Worldwide, Country
Profiles: Jordan,” updated December 2008, <http://www.wipo.int/export/sites/www/aboutip/en/ipworldwide/pdf/jo.pdf>.
23
WIPO, “Understanding Industrial Property,” pp. 16,
<http://www.wipo.int/freepublications/en/intproperty/895/wipo_pub_895.pdf>.
24
WIPO, “Contracting Parties, Patent Cooperation Treaty,”
<http://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=6>.
25
Ministry of Industry and Trade, “Patent Law,” Article 8,
<http://www.mit.gov.jo/portals/0/tabid/507/patent%20law.aspx>.
26
Ministry of Industry and Trade, “Patent Regulations,” Article 10,
<http://www.mit.gov.jo/portals/0/tabid/537/patent%20regulation.aspx>.
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publication, first use, or first offer for sale.27 These events can be considered prior art and would
affect whether a patent is granted.28
The filing date is a key piece of information. It establishes the conditions of novelty and nonobviousness on that date. Further, if the patent application is filed in one jurisdiction, another
application can be filed in another jurisdiction within 12 months and be considered as having the
same filing date.29
Intellectual property protection is an important step in the commercialization process. It ensures
that the researcher (or other owner) can profit from the commercialization of the technology free
from competition. The researcher will make some key decisions, and make them early in the
process, even if the researcher does not fully pursue commercialization.
5.4. Step 4: Develop a Commercialization Strategy
The fourth step in R&D commercialization is to develop a commercialization strategy. A
commercialization strategy is the plan for getting the technology to market. It’s not just a matter of
sitting down and writing a plan. There is a lot of brainstorming and making choices before actually
documenting it. There are four tasks in this step.
The first task is for the researcher to determine how involved he or she wants to be in the
commercialization of the technology. Does the researcher prefer to hand off the technology to
others to commercialize and focus on research, perhaps working on the next technology with
commercial potential? Or, does the researcher prefer to be hands-on in every stage of
commercializing the technology? This is a personal, professional, and financial decision.
Commercializing a technology can be a significant commitment of time, require a change in
employers or becoming self-employed, and require a financial commitment.
The next task is to find collaborators for commercialization. Referring back to the roles described in
Section 3.2, the researcher needs to become aware of individuals and organizations that participate
and assist in the commercialization process. These may be the aforementioned companies, end
users, investors, and technology management offices. They may be co-investigators, mentors, and
other advisors. They may also be specialists or consultants to assist with the process, such as patent
attorneys. Now is the time to identify the people who might be involved in the commercialization of
the technology. Note: If intellectual property protection is not in place, consider having the
collaborators sign non-disclosure agreements.
The third task is to determine the path for commercialization. Thomas Friedman put it simply:
“Companies can do one of three things with an innovation: They can patent the widget they invent
27
Geoffrey Prentice and Tim Anderson, “Career Development for New Engineering Faculty Workshop,”
Briefing, University of New Mexico, May 25, 2007, pp. 177,
<http://www.nsf.gov/eng/cbet/new_faculty/new_faculty_unm_25may07.ppt>.
28
Ius Mentis, “When is Something Prior Art Against a Patent?” <
http://www.iusmentis.com/patents/priorart/>.
29
WIPO, “Understanding Industrial Property,” pp. 6-7,
<http://www.wipo.int/freepublications/en/intproperty/895/wipo_pub_895.pdf>.
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and sell it themselves; they can patent it and license it to someone else to manufacture; or they can
patent it and cross-license with several other companies so that they all have freedom of action to
make a product—like a PC—that comes from melding many different patents.”30 Researchers have
analogous options for technology commercialization. As Figure 5.3 illustrates, there are three
primary ways researchers can see their innovation commercialized: licensing, forming a startup, or
partnering.
Figure 5.3 Three Paths to Commercialization31
Licensing refers to licensing of the technology (patent). It is where the researcher (owner) gives
permission for someone else to use the technology in exchange for a fee. In many cases, this is an
established company. One of the advantages is the researcher can continue his or her research at
the university while now having an income stream. One disadvantage is the researcher is not
materially involved in the remainder of the commercialization. From the researcher’s perspective,
the commercialization process ends at this step.
Forming a startup refers to establishing a new company for the purpose of commercializing a
technology. The new company then licenses the technology. One of the advantages is the
researcher can potentially generate a larger income stream through selling the end product. The
researcher is also materially involved in setting up the new company, which may take him or her
away from primary research. One disadvantage is startups are small enterprises, and small
enterprises often need a lot of help to get going and maintain operations through profitability.
Support organizations are listed back in Figure 3.1.
30
Thomas L. Friedman, The World is Flat: A Brief History of the Twenty-First Century, 3rd edition, New York:
Picador, 2007, pp. 254.
31
Tony Stanco, National Council of Entrepreneurial Tech Transfer, “Researcher Commercialization Course,”
NCET2 Researcher Commercialization Course, Lecture 1: Commercialization Methods,
<http://researchercourse.ncet2backoffice.org/images/powerpoint/tonyncet2researchercommercializationlect
ure1.pdf>.
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Partnering can take the form of a strategic alliance or a joint venture. A strategic alliance is an
arrangement where two (or more) organizations agree to share resources for their mutual benefit.
They typically have complementary expertise. A joint venture is a strategic alliance where a new
business entity is created. One advantage of a strategic alliance is being able to leverage the
resources of a larger business and reduce business risk. One disadvantage is the costs to establish
and manage the alliance. For example, one partner may be able to access the new university
technology, while the other partner may be able to access economies of scale, larger markets, or
new market segments.32
The last task is to write a business plan. The three prior tasks helped to form the commercialization
strategy and now it is time to document it and flesh out the particulars. The elements of a good
business plan include details in the following areas:









Executive Summary
Market Analysis
Company Description
Organization & Management
Marketing & Sales Management
Service or Product Line
Funding Request
Financials
Appendix33
There are many resources for developing a business plan, from outlines and templates to
consultants and workshops. Take advantage of the resources and get assistance from entrepreneur
support organizations (refer back to Figure 3.1). The business plan is a living document, and will
grow and evolve over time. Incorporate feedback from advisors and potential investors to improve
it.
In sum, developing a commercialization strategy requires a significant amount of thought about how
to execute the commercialization and capturing it in a plan. The researcher will have to consider his
or her own role, the inclusion of others, and the method of commercialization. If licensing is the
path, then the researcher’s role in commercialization concludes. If forming a startup or partnering is
the path, the researcher becomes an entrepreneur. All of this is in preparation for the next two
steps.
5.5. Step 5: Finance the Commercialization
The fifth step in R&D commercialization is to finance the commercialization. It takes financial
resources to lay the groundwork for commercialization, principally for a startup. This includes
32
Anna Claudia Pellicelli, “Strategic Alliances,” EADI Workshop, 30-31 October 2003, <http://www.ea2000.it/204pellicelli.pdf>.
33
U.S. Small Business Administration, “Write a Business Plan,”
<http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html>. Other business plan tools
are available at this site.
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forming the company, continuing development of the technology, and starting operations. The
business plan should indicate how much funding is needed. This step has two tasks.
The first task is to research investors and other funding sources. There are several sources of
funding, which include business plan competitions, friends and family, non-profit grants, angel
investors, broker/dealers, and venture capital firms. 34 A business plan competition is a great way to
get feedback on the plan and also get exposure for the company. Friends, family, and personal
savings might be the initial sources of funds. Grants can be pursued through non-profit
organizations like foundations. Government grants may also be available. Angel investors are
affluent individuals that invest their own funds. Sometimes angel investors band together in
networks to pool ideas and funds. Broker/dealers can match their own investors to opportunities.
Venture capital firms are professional fund managers that invest a pool of money.
Each of these types of investors has their own requirements for investing. Primarily, they will
evaluate the business plan and decide if it is a good match. Some investors may invest earlier than
others. Some investors have specific types of investments they will consider, perhaps by industry or
technology. Investors have dollar thresholds they will consider. For example, venture capital firms
have higher minimum investments than other sources of funding. The Clean Energy Investors
Directory is a source of investors in clean energy technologies.35
Venture capital funding in renewable energy companies is strong. “VC investment in green energy
technologies in 2008 exceeded $7.7 billion in more than 350 deals—more than double last year’s
dollar totals.”36 It was announced in August 2009 that two funds investing in green technology
startups are the largest since 2007. “Khosla Ventures will make initial investments of $5 million to
$15 million from its main $800 million fund. The smaller $275 million fund will seed very early-stage
ideas with investments of around $2 million.”37
The second task is to solicit support. This is the hard work of attracting investors to the startup, not
just in the beginning but though its early growth. All the support needed for the entire
commercialization will not come all at once. This requires presenting the business plan to potential
investors and getting their investment.
Ideally, the commercialization will receive multiple rounds of financing from various sources to
continue to the next step. If funding is not obtained, it will be difficult for the commercialization to
proceed. This is the valley of death that was discussed in Section 4.
34
University of Southern California, Stevens Institute for Innovation, “Raising Venture Capital,”
<http://stevens.usc.edu/start_raisevc.php>.
35
National Renewable Energy Laboratory, “Clean Energy Investors Directory,”
<http://www.nrel.gov/technologytransfer/directory_ce_investors.html>.
36
“Venture Capital Investment in Greentech and Renewable Energy Exceeds $2.5B in Q4 2008 and Reaches
$7.7B for the Year,” Reuters, 05 January 2009,
<http://www.reuters.com/article/pressRelease/idUS140478+05-Jan-2009+PRN20090105>.
37
Claire Cain Miller, “Venture Firm’s ‘Green’ Funds Top $1 Billion,” New York Times, 01 September 2009,
<http://www.nytimes.com/2009/09/01/business/01khosla.html?_r=1&th&emc=th>.
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5.6. Step 6: Launch the Commercialization
The final step in R&D commercialization is to launch the commercialization. This means to make,
use or sell the technology as an end product. There are three tasks. The first task is to implement
the business plan developed in Step 4. The second task is to set up production and manufacture the
end product. This may require additional development to get to the end product. The last task is to
market and sell the technology.
In conclusion, the commercialization process can lead to varying outcomes for the researcher and
the technology depending on decisions made during the process. Nonetheless, the technology will
have hopefully completed the journey from the lab to the marketplace. The following exercise will
apply the key points from the commercialization process to a renewable energy example.
Exercise 5: Select a renewable energy technology with commercial potential. Answer the following
questions:





What is the innovation? What is the end product?
How mature is it? Is it marketable? Is it patentable?
How will you protect it?
Describe the commercialization strategy.
How will you finance it?
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6. Challenges and Barriers to R&D Commercialization
R&D commercialization is not a smooth and direct path as the process described in the previous
section might imply. There are many challenges and barriers to commercialization, which can occur
in any of the steps. These should not dissuade the researcher from seeking to commercialize his or
her research, but should highlight potential trouble areas.
Barriers and challenges to commercialization can appear in many areas. A researcher might
experience market, technological, social/cultural, bureaucratic, and commercial barriers. Some
specific barriers might include:






Lack of needed skills, particularly business acumen
Lack of sources of financing
Lack of institutional support, including bureaucratic “red tape”
Business plan does not attract interest
Technology not mature enough
Access to networks
The protracted timelines are another challenge to commercialization. Research commercialization
can take a long time—measured in years. Some of the stakeholders in a particular
commercialization may not be prepared for the long timelines, particularly investors. Because
commercialization can have long timelines, conditions change during the process. Market conditions
may change to where demand for the end product increases or decreases, financing may be more or
less available, or partners or experts may or may or may not be accessible.
The barriers and challenges to should not be a deterrent to achieving a commercialized technology.
Knowing where they might occur can give confidence to the researcher that the current obstacle is
only a temporary slowdown. He or she will find a way to overcome it or find another avenue to get
around it. Also, the entrepreneurship support programs listed in Figure 3.1 are designed to assist
researcher-entrepreneurs with many of the trouble areas. For example, Jordan’s iPARK Technology
Incubator provides logistical services, strategic support services, and operational support services to
overcome some of the basic hurdles of starting a new business.38
While most barriers can be overcome with perseverance and ingenuity, there are some barriers so
significant as to derail the commercialization or for the commercialization to fail. This is a normal
outcome of a commercialization attempt. It is important to identify and understand the barriers to a
successful commercialization as early as possible. The following exercise has participants brainstorm
barriers.
38
iPARK, “Services,” <http://www.ipark.jo/services.html>.
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Exercise 6: What are your top three barriers to commercialization? Can they be overcome? How?
Are there barriers unique to renewable energy technologies?
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7. Tips and Techniques from Experienced Commercializers
Success in commercialization is not just about overcoming barriers, although they can dominate the
view of the researcher. Success is also about finding those suggestions that can provide some
forward momentum. This section will highlight tips and techniques from experienced
commercializers.
The first set of tips is about the people involved in the commercialization. Researchers need
business skills. The attributes of a good researcher don’t necessarily make him or her a good
business person. Business skills are more important than scientific skills. Get commercialization
training and support provided by government or industry.
Even with training, the researcher will need to recruit additional skills. Finding collaborators was
described in Step 4 of the commercialization process. Find people with the right skills for the needs
of the startup and build networks to source specialized expertise. These are the managers, lawyers,
sales staff, etc. Researchers could consider taking on a role that provides technical expertise, such as
Chief Technology Officer of Chief Science Advisor, if they don’t feel qualified to manage the business.
Finding support or mentoring is important to a successful commercialization. It is important to find
external advisors, both formal and informal, such as “consultants, peers, ‘customers as mentors,’
board of directors, ‘investors as mentors,’ or members of formalized advisory boards.”39 This
outside perspective is valuable during intense early stages.
In addition to the human element, the technology itself is a key variable in success. Select projects
that have the greatest commercial and technical potential. Researchers should take the time to
carefully define the product and carefully evaluate the commercial potential. Do the market
research to fully understand how the end product will be received.
There are a few tips regarding financing. There is funding available if the researcher takes the time
to look for it. Develop relationships with investors early, before the funding is needed. Go to the
extra effort to reduce risk from the perspective of the investor.
A few remaining tips: Researchers should understand the regulatory requirements, particularly in
heavily regulated industries. Acquire early customers to help shape the product. Use partnerships
for acquiring sales channels. Lastly, go for it! No commercialization is successful unless the
researcher takes the first step.
Sources:


Rocket Builders, “Commercialization Success in Early Stage Technology Companies,” 25 June
2004,
<http://www.rocketbuilders.com/commercialization/RB_Commercialization_June2004.pdf>.
Penelope Shihab, MonoJo, Personal Interview, 17 September 2009.
39
Rocket Builders, “Commercialization Success in Early Stage Technology Companies,” 25 June 2004, pp. 34,
<http://www.rocketbuilders.com/commercialization/RB_Commercialization_June2004.pdf>.
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

Dr. John Turner, Flinders Technologies Pty Ltd, “Commercialization of Inventions and
Research Results: Managing Technical and Commercial Developments to Optimize
Outcomes,” Presentation to WIPO Regional Seminar on Support Services for Inventors,
Valuation and Commercialization of Inventions and Research Results, Manila, 19-21
November 1998,
<http://www.wipo.int/edocs/mdocs/innovation/en/wipo_inv_mnl_98/wipo_inv_mnl_98_6.
doc>.
University of Southern California, Stevens Institute for Innovation, “Building a Team,”
<http://stevens.usc.edu/start_team.php>.
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8. Case Studies
Case studies are an important learning tool when it comes to research commercialization. They
offer the opportunity to learn from the experiences of the researchers and technologies being
commercialized. Stories of success can provide insights into the commercialization process.
Because renewable energy is a key area of emphasis for SABEQ, case studies were developed from
the commercialization of renewable energy technologies. One area with significant
commercialization activity is biofuels from algae. One headline reads, “Who's the Slimiest? 10
Companies in the Race to Commercialize Algae.” Companies large and small are going after these
petroleum substitutes. For example, Exxon Mobil and Synthetic Genomics recently announced their
$600 million strategic alliance for research and development in algal biofuels.40
Three case studies were developed from companies developing biofuels from algae. The companies
were selected based on a relationship with a research university. They are Solix Biofuels,
PetroAlgae, and Aurora Biofuels. Each case study will introduce the company and technology, and
present some key points in each of the steps of the commercialization. Sources for the case studies
are listed in Appendix 1.
8.1. Solix Biofuels
Solix Biofuels was co-founded in 2006 by a Colorado State University mechanical engineering
professor, Bryan Willson. He is the company’s Chief Technology Strategist. The company’s goal is to
create “a commercially viable biofuel that will help solve climate change and petroleum scarcity
without competing with global food supply.” Solix produces the AGS Technology, which is a photobioreactor that houses closed-growth chambers that support the monoculture growth of microalgae.
The intellectual property was from a co-founder.
Solix began construction of its Coyote Gulch Demonstration Facility, located on the Southern Ute
Indian Reservation, in February 2009 and began operations in July 2009. The facility plans to
produce 3000 gallons of algae fuel per acre by the end of 2009. This means the technology is a TRL
7. The commercialization target is 2013.
Solix completed its first round of outside funding with almost $17 million in capital. Investors
include Shanghai Alliance Investment, I2BF Venture Capital, Bohemian Investments, Southern Ute
Alternative Energy LLC, Valero Energy Corp., and Infield Capital. The Southern Utes also contributed
free use of land and more than $1 million in equipment.
40
Synthetic Genomics, “Synthetic Genomics Inc and ExxonMobil Research and Engineering Company Sign
Exclusive, Multi-Year Agreement to Develop Next Generation Biofuels Using Photosynthetic Algae,” 14 July
2009, <http://www.syntheticgenomics.com/media/press/71409.html>.
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8.2. PetroAlgae
PetroAlgae was founded in 2006 with the mission “to dramatically alter the global energy landscape
through large-scale replacement of petroleum while creating a new source of food for the world.”
The company licensed technology from Arizona State University. The key technology is a group of 12
strains of high oil-yield algae. The technology has its roots in the National Renewable Energy
Laboratory’s Aquatic Species Program, which was then moved to ASU. “PetroAlgae negotiated an inprinciple licensing agreement with ASU in late 2006 and signed a formal technology license in
February 2007, whereby they licensed certain of these strains of algae and an early design for a
bioreactor. In addition to the ASU technology, PetroAlgae has selected and utilizes other strains of
algae to optimize growth and harvest characteristics for different applications and different
geographic environments.”
PetroAlgae’s end product is a “system of technologies to grow and harvest oil from algae.” It has
developed a customer demonstration facility, which produces 141 metric tons of biomass per
hectare per year. This means the technology is a TRL 7. The first commercial revenues are expected
in 2009.
Patents are being pursued to protect the intellectual property, both the ASU technology and
PetroAlgae-developed technology. See Figure 8.1.
Figure 8.1 PetroAlgae’s Patent Applications41
Applications on behalf of Arizona State University
and LICENSED to PetroAlgae, LLC
Novel Chlorella Species and Uses Thereof
• PCT/US07/68889
• Filed May 14, 2007
• National Stage Entered
• US, India, China, Europe, Indonesia, Japan,
Singapore
Photobioreactor and Uses Thereof
• PCT/US07/04351
• Filed February 20, 2007
• National Stage entered
• Australia, India, China, Malaysia, Indonesia,
Singapore, Mexico, and the US
Advanced Chlorococcum/
Scenedesmus/Palmellococcus/Cylindrospermopsis
/Planktothrix photosynthesis-driven
bioremediation coupled with renewable biomass
and bioenergy production
• PCT/US08/64009
• Filed May 16, 2008
Applications on behalf of PetroAlgae, LLC
System and Methods of Production and
Harvesting of Oil-rich Algae
• PCT/US07/06466
• US Application 11/728297
• Filed March 15, 2007
• National Phase Entered
• Australia, Mexico, and US
System and Methods of Production and
Harvesting of Oil-rich Algae
• US Application 11/858417
• Filed December 18,2007
Tubular Growth Method
• PCT/US07/20211
• Taiwan 096164247
• Filed September 13, 2007
41
PetroAlgae, “8-K,” Section 5. Corporate Governance, 29 December 2008, <http://livermore.brand.edgaronline.com/EFX_dll/EDGARpro.dll?FetchFilingHtmlSection1?SectionID=6318952-9108125743&SessionID=297vWHhUWj7Tt02>.
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PetroAlgae is a publicly traded company (OTC BB: PALG.OB). On 04 October 2009, it was trading at
$24.95 per share. It has raised about $45 million in capital. Investors include Valens and Laurus.
8.3. Aurora Biofuels
Aurora Biofuels was founded in 2006 by a group of University of California, Berkeley students. In
that same year the group of students took top prize in two competitions: the UC Berkeley Business
Plan Competition and the Intel+UC Berkeley Technology Entrepreneurship Challenge. The
company’s goal is “to develop the lowest cost solution for growing algae and producing bio-oil.”
Aurora’s technology was developed by a Berkeley professor. The company has been producing
biomass at a pilot facility since August 2007 and is completing a 20-acre demonstration plan in 2009.
This indicates a TRL 6. It expects commercial production of biofuel in 2012. “A commercial
installation will span a minimum of 2000 acres with a capacity of at least 10 million gallons of
biodiesel per year.”
Aurora’s uses both patents and trade secrets. It announced in August 2009 that its proprietary
process for selection and breeding of non-transgenic algae has doubled the CO2 uptake and oil
production of its algae strains. One patent application was located for “Methods for Concentrating
Microalgae.”42
Aurora has raised $25 million in two rounds of financing. Investors include Gabriel Venture Partners,
Noventi Ventures, and Oak Investment Partners.
These three companies commercializing biofuels from algae have three unique experiences. Each
had a relationship with a research university. One was a startup by a professor, one licensed the
technology, and the third was a startup by students. Their technologies are each about the same
level of maturity—TRL 6 or 7. Patents are used to protect intellectual property, as is confidentiality
for trade secrets. All have been successful in attracting investors and raising capital in the tens of
millions of dollars. All appear to be ready to achieve full commercialization within the next four
years.
42
Aurora Biofuels, “Methods for Concentrating Microalgae,” Patent Application WO/2009/082696, Publication
Date: 02 July 2009, International Filing Date: 19 December 2008,
<http://www.wipo.int/pctdb/en/wo.jsp?IA=US2008087722>.
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9. References/Resources
Nizar Al-Halasah and Abeer Arafat, Royal Scientific Society, “Innovation System in Jordan,”
Presentation to Design and Evaluation of Innovation Policy in Developing Countries,
Maastricht, 22-26 October 2007,
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%>.
Kruti Amin, “Compete or Cooperate? Choosing the Right Commercialization Strategy as a
Technology Start-Up,” Posted Jul 2007,
<http://insight.kellogg.northwestern.edu/index.php/Kellogg/article/compete_or_cooperate
>.
Association of University Technology Managers (AUTM), <http://www.autm.net>.
---, “The Better World Project,” <http://www.betterworldproject.net>.
Thomas Åstebro, University of Waterloo, “Key Success Factors for R&D Project Commercialization,”
January 2003, <http://www.rotman.utoronto.ca/bicpapers/pdf/03-07.pdf>.
Bruce V. Bigelow, “Cleantech Venture Funding Brightens for All But Solar,” Xconomy, 01 July 2009,
<http://www.xconomy.com/national/2009/07/01/cleantech-venture-funding-brightens-forall-but-solar/>.
Declan Butler, “Islam and Science: The Data Gap,” Nature 444, 26-27 (2 November 2006); Published
online 1 November 2006,
<http://www.nature.com/nature/journal/v444/n7115/full/444026a.html>.
Duke University, Center for Entrepreneurship and Research Commercialization,
<http://www.cerc.duke.edu/>.
Ewing Marion Kauffman Foundation, “University Innovation and Commercialization,”
<http://www.kauffman.org/advancing_innovation/university_innovation_and_commercializ
ation.aspx?ekmensel=e4e07dfa_14_0_3560_1>.
Joe Fanguy, Office of Research and Economic Development, Mississippi State University, “From Lab
to Market: The Inventor's Commercialization,” Video Presentation,
<http://msworkforceuniversity.mediasite.com/msstate/Viewer/Viewers/Viewer320TL.aspx?
>. See more at <http://www.research.msstate.edu/development/seminar.php>.
Federal Laboratory Consortium for Technology Transfer, “Technology Transfer Mechanisms Used by
Federal Agencies: A Quick Reference Guide,” 2007,
<http://techtransfer.energy.gov/agencyt2mechanismguide%20rev_DOE.pdf>.
Steven M. Ferguson, NIH Office of Technology Transfer, “Why Is Technology Commercialization So
Important For Scientists?” NCET2 Researcher Commercialization Course, Lecture 1:
Commercialization Methods,
<http://researchercourse.ncet2backoffice.org/images/powerpoint/stevencet2researcherco
mmercializationlecture1.pdf>.
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Bruce Healy, “Barriers to Technology Commercialization in Alberta,” 15 July 1996,
<http://www.asra.gov.ab.ca/resources/publicdocs/barrier/bartoc.html>.
International Energy Agency, “Renewables in Global Energy Supply: An IEA Fact Sheet,” January
2007, <http://www.iea.org/textbase/papers/2006/renewable_factsheet.pdf>.
Jordan Enterprise Development Corporation, “The Jordan Enterprise Venture Capital Programme,”
20 May 2009, <http://www.jedco.gov.jo/files/VC%20Extension%20Guidelines.doc>.
Jordan Ministry of Industry and Trade, “Statistics,”
<http://www.mit.gov.jo/tabid/465/Statistics.aspx>.
Wendy Kennedy, So What? Who Cares? Why You?: The Inventor's Commercialization Toolkit, January
2006, <www.wendykennedy.com>.
Shalom Leaf and Alan Bickerstaff, “Angel Investors & Venture Capital,” NCET2 Researcher
Commercialization Course, Lecture 11: The Advanced Essentials: Angel Investors and
Venture Capital, 03 September 2009,
<http://researchercourse.ncet2backoffice.org/images/RCC_Speaker_Slides/bickerstaffleafsli
des.pdf>.
“Life Sciences Discovery Fund Announces Commercialization Grant Awards,” Reuters, 04 August
2009, <http://www.reuters.com/article/pressRelease/idUS199918+04-Aug2009+BW20090804>.
Medibtikar, “Jordan Innovation System Actors,” <http://www.medibtikar.eu/-Jordan-InnovationSystem-Actors-.html>.
Michigan Ross School of Business, Center for Venture Capital and Private Equity Finance, “FIN329 /
FIN629 Resources for Research Commercialization Projects,”
<http://webservices.itcs.umich.edu/mediawiki/KresgeLibrary/index.php/FIN329_/_FIN629_
Resources_for_Research_Commercialization_Projects>.
Claire Cain Miller, “Venture Firm’s ‘Green’ Funds Top $1 Billion,” New York Times, 01 September
2009, <http://www.nytimes.com/2009/09/01/business/01khosla.html?_r=1&th&emc=th>.
Mississippi State University, Office of Research and Economic Development, “Office of Technology
Commercialization, Opportunity Assessment,” Checklist, Version 5.21.07(a),
<http://www.research.msstate.edu/development/pdf/seminar/otc_opp_assess.pdf>.
Geoffrey A. Moore, Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream
Customers, New York: Harper, 2002.
National Aeronautics and Space Administration, “NASA Technology Commercialization Process w/
Change 1,” NPR 7500.1, 09 April 2004,
<http://nodis3.gsfc.nasa.gov/displayDir.cfm?Internal_ID=N_PR_7500_0001_&page_name=
main>.
National Business Incubation Association (NBIA), <http://www.nbia.org/>.
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---, “Business Incubation FAQ,” <http://www.nbia.org/resource_library/faq/index.php#1>.
National Council for Entrepreneurial Tech Transfer, “Researcher Commercialization,” Webinar
course (free to view with registration), <http://ncet2.org/UpcomingEvents/researchercommercialization>.
National Renewable Energy Laboratory, <http://www.nrel.gov/>.
---, “Partnerships Boost Research, Improve Technology,” 06 March 2009,
<http://www.nrel.gov/features/20090306_crada.html>.
National Research Council, Government/Industry/Academic Relationships for Technology
Development: A Workshop Report, Washington, D.C.: The National Academies Press, 2005,
<http://books.nap.edu/html/gov-industry/0309095735.pdf>.
National Venture Capital Association, <http://www.nvca.org/>.
OECD, Turning Science into Business: Patenting and Licensing at Public Research Organisations, 2003,
<http://www.oecd.org/document/61/0,2340,en_2649_34269_2513917_1_1_1_1,00.html>.
“Phoenix Center Releases Study of ‘Valley of Death’ in R&D Technology Investments,” Reuters, 12
February 2008, <http://www.reuters.com/article/pressRelease/idUS235179+12-Feb2008+PRN20080212>.
Queen Rania Center for Entrepreneurship, <www.qrce.org>.
Andrew Reamer, Larry Icerman, and Jan Youtie, Technology Transfer and Commercialization: Their
Role in Economic Development, Prepared for the Economic Development Administration,
U.S. Department of Commerce, August 2003, <http://www.eda.gov/PDF/eda_ttc.pdf>.
“Renewable energy commercialization,”
<http://en.wikipedia.org/wiki/Renewable_energy_commercialization>.
Royal Scientific Society, “Technology Transfer Process,”
<http://www.rss.gov.jo/ttc/ttc_Process_e.aspx>.
Jim Sears, “Strategic Road to Commercialization: Food and Fuel from Algae,” AFOSR Algae Oil for Jet
Fuel Production Workshop, 19 February 2008,
<http://www.nrel.gov/biomass/pdfs/sears.pdf>.
Jenny C. Servo, “Commercialization Strategies that Work,”
<http://texasiof.ces.utexas.edu/texasshowcase/pdfs/presentations/d1/jservo.pdf>.
Scott Andrew Shane, Academic Entrepreneurship: University Spinoffs and Wealth Creation, Edward
Elgar Publishing, 2004,
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spective&source=gbs_navlinks_s>.
Stopfakes.gov, “How can I protect my intellectual property?”
<http://www.stopfakes.gov/sf_how.asp>.
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Joe Tidd, “A Review of Innovation Models,” 2006,
<http://www3.imperial.ac.uk/portal/pls/portallive/docs/1/7290726.PDF>.
United States Air Force SBIR/STTR, “Readiness Level Presentations,” July 2008,
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Partnering Activities at the National Laboratories and Other Facilities, Fiscal Year 2006,”
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20TT%20final.pdf>.
“The University Funds Launches Business Accelerator to Commercialize Research Innovation,”
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University of Southern California, Stevens Institute for Innovation, <http://stevens.usc.edu/>.
John M. Vassiliades, “Building Strategic Alliances,” NCET2 Researcher Commercialization Course,
Lecture 10: The Advanced Essentials: Corporate Strategic Alliances and Joint Venturing, 27
August 2009,
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2.ppt>.
Vivek Wadhwa, Krisztina Holly, Raj Aggarwal, and Alex Salkever , Anatomy of an Entrepreneur: Family
Background and Motivation, Kauffman Foundation Small Research Projects Research, 07 July
2009, <http://ssrn.com/abstract=1431263>.
Charles W. Wessner, ed., National Research Council, SBIR and the Phase III Challenge of
Commercialization: Report of a Symposium, Washington, D.C.: National Academies Press,
2007.
---, National Research Council, “The Twenty-First Century University: Innovation & the
Commercialization of University Research,” Briefing, Knowledge Economy Forum IV,
Istanbul, Turkey, 23 March 2005,
<http://siteresources.worldbank.org/INTECAREGTOPKNOECO/Resources/CharlesWessner.p
pt>.
Dennis Wonica, “SBIR Commercialization: Is Your Small Business Ready for Prime Time?”
Presentation to AIAA Los Angeles Chapter, 18 March 2008,
<http://laserlightnetworks.com/Documents/SBIR%20Commercialization.pdf>.
World Intellectual Property Organization (WIPO), “WIPO Intellectual Property Handbook: Policy, Law
and Use,” WIPO Publication No.489 (E), <http://www.wipo.int/aboutip/en/iprm/index.html>.
---, WIPO Overview, 2007 edition,
<http://www.wipo.int/freepublications/en/general/1007/wipo_pub_1007.pdf>.
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William E. Zamer, National Science Foundation, “An Assessment of Science and Technology
Capabilities Pertaining to the Innovation System in the Hashemite Kingdom of Jordan,” 24
March 2006.
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Appendix 1
Sources for Case Studies in Section 8
Aurora Biofuels, <http://www.aurorabiofuels.com/>.
“Biggie Smalls: Microcrops Go Mainstream and Head for the Big Time,” Biofuels Digest, 04 August
2009, <http://biofuelsdigest.com/blog2/2009/08/04/biggie-smalls-microcrops-gomainstream-and-head-for-prime-time/>.
Colorado State University, “Colorado State Engines Lab Teams with Solix Biofuels Inc. to Mass
Produce Oil from Algae as Diesel Fuel Alternative,” 07 December 2006,
<http://www.news.colostate.edu/Release/4260>.
Emerging Markets Online, “Algae 2020: Biofuel Market Strategies & Commercialization Outlook,”
June 2009, <http://www.emerging-markets.com/algae/default.asp>.
“Exploring Ways to Use Richly Abundant, One-Celled Organisms to Power Our Vehicles,” Colorado
State Magazine, December 2006, <http://www.colostate.edu/features/biofuels-fromalgae.aspx>.
Greener Dawn Research, “Growing Green: An In-Depth Look at the Emerging Algae Industry,” 22 July
2009, <http://www.greenerdawninvestmentgroup.com/research/>.
Kirk Johnson, “A New Test for Business and Biofuel,” New York Times, 16 August 2009,
<http://www.nytimes.com/2009/08/17/business/energy-environment/17algae.html?_r=1>.
Padma Nagappan, “Who's the Slimiest? 10 Companies in the Race to Commercialize Algae,”30 July
2009, <http://www.energyboom.com/biofuels/top-10-companies-race-commercializealgae>.
PESWiki, “Directory: Biodiesel from Algae Oil,”
<http://www.peswiki.com/index.php/Directory:Biodiesel_from_Algae_Oil>.
PetroAlgae, <http://www.petroalgae.com>.
PetroAlgae, “8-K,” Section 5. Corporate Governance, 29 December 2008,
<http://livermore.brand.edgaronline.com/EFX_dll/EDGARpro.dll?FetchFilingHtmlSection1?SectionID=6318952-9108125743&SessionID=297vWHhUWj7Tt02>.
PetroAlgae, “Transforming Sunlight into Fuel and Food for the World: Investor Presentation,”
September 2009, <http://www.petroalgae.com/docs/pres/Petroalgae-CorporateOverview.pdf>.
Solix Biofuels, <http://www.solixbiofuels.com>.
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Synthetic Genomics, “Next Generation Algal Biofuels Fact Sheet,” July 2009,
<http://www.syntheticgenomics.com/images/AlgalBiofuelsFactSheet.pdf>.
Chris Tachibana, “Algae Biofuels: From Pond Scum to Jet Fuel,” Renewable Energy World, 15
September 2009, <http://featured.matternetwork.com/2009/9/algae-biofuels-from-pondscum.cfm>.
University of California, Berkeley, “Aurora Biofuels Takes Top Prize in the UC Berkeley Business Plan
Competition,” 02 May 2006,
<http://nature.berkeley.edu/blogs/news/2006/05/aurora_biofuels_takes_top_priz_1.php>.
41
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