VERTEX COMMERCIALIZATION ROADMAP

The Vertex Commercialization Roadmap can be downloaded from this site. It is available as a pdf file in either colour or black and white. The black and white version will provide a more ledgible copy when printed on legal-size paper using a printer with a resolution of 600 dpi or better.

A larger version of the Roadmap is available from Vertex. Click here to receive a copy for your office.


Over the past couple of years, facets of the Vertex roadmap were created to help us provide various consulting services to our clients. We have recently integrated the parts previously developed to form a broader based technology commercialization roadmap.

Our technology commercialization roadmap works much like a highway roadmap. First, you need to determine where you are in the commercialization process and then you must locate the destination that you want to reach. You can then determine the path you need to follow from the roadmap. Note that this roadmap shows only the 'main highways' and 'well-traveled routes'. It does not provide the details for the 'secondary roads' that are often needed but which are only included on 'higher resolution local maps'. Vertex's Technology Commercialization Roadmap is intended to be a useful guide to individual inventors, small and medium size businesses, as well as larger companies.

There are four main regions in this roadmap, namely Idea Creation, Technology Development, Intellectual Property (IP) Protection and Exploitation. The Idea Creation territory is the region in which new technology-development ideas are cultivated and their business potential is critically examined. Once idea concepts are clarified, it's on to the Technology Development stage. The focus of the Technology Development area is to advance the new technology idea to a stage suitable for commercialization. Then, before charging forward with the commercialization process, there is an IP Protection region to be traversed in which intellectual asset management tasks are addressed. Once the Exploitation destination is finally reached, there are many available commercialization paths to follow and hence many decisions to make. You will find that spending time in this region is rewarding in that it is one of the main sources of inspirations for new ideas and future travels.

Idea Creation Quadrant - 'The Starting Point for Business Success'
New technology development ideas are cultivated and their business potentials critically examined in the Idea Creation neighbourhood. Large businesses use many different processes and procedures to make new technology development and product launch decisions. Small and medium size enterprises tend to look at the same issues with a less formal approach. Individual inventors, who generally have a minimum of business experience, tend to take a more emotional view of things and sometimes erroneously believe that their idea is so good that it will carry itself to the market place.

Regardless of the degree of formality in process used, the main factors to be assessed in all cases are:

  1. Technology - How will the technology solution being assessed compare to competitive alternatives in terms of the business need that it addresses?
  2. Market - What is the market potential for the technology or product?
  3. Management - What management capabilities are needed to commercialize the product or technology? Are these skills and capabilities currently available or will new personnel or special training be required?
  4. Financial - What expenses are expected during the commercialization process? What financial return can be expected? How does the return on investment for the technology being considered compare to other opportunities that might be available?

Once these issues have been clarified, and a product development and exploitation business plan has been developed, it's on to the technology development stage.

Technology Development Neighbourhood - 'Getting your Idea & Technology Market Ready'
Once a business case that supports a technology development program has been established, there are a number of issues to be addressed before moving on to the Intellectual Property Protection and Exploitation neighbourhoods.
First, the technology development needs must be clearly defined in terms of the performance characteristics of the target application. The market research carried out in the process of developing the business case will help to focus this effort. With the complete technology needs clearly understood, the next step in the technology development phase is to determine what technology components, if any, exist within the organization.

For example, in large organizations it is possible that the required technology component has already been created or an existing in-house technology can easily be adapted to meet the newly identified need. However, if the technology does not exist in-house, it may be available from another organization. It is always worth investigating the possibility of acquiring the needed technology through licensing-in. This approach can often prove not only to be less costly, but also more reliable than undertaking an internal development program.

Once the possibility of an acquisition has been exhausted, an in-house technology development program must be defined for the commercialization process to proceed. Remember that the in-house program may include the strategic outsourcing of specific facets of the technology development. Finally, when all of the components have been developed, it is necessary to integrate them into the marketable product with the specific performance characteristics established by the market research work.

As the technology development work proceeds, it is important to re-confirm that the market needs justify the expense of the technology development program. In many cases, technology development programs can be lengthy and the market needs can shift. Regular reviews will help assure that the technology program has the appropriate market focus, as it makes no business sense to develop a product for which there is insufficient market demand.

Large businesses use many different processes and procedures to make technology development and product launch decisions. Small and medium size enterprises tend to consider the same issues with a less structured approach. Individual inventors, who generally have minimal business experience, tend to take a more emotional view of the situation. Some erroneously believe that their idea is so good that it will carry itself to the marketplace.

As the technology development work nears completion, an intellectual property management plan needs to be developed. In fact, it is advisable to anticipate this need during the technology development phase and to initiate the development of an IP management program at this time. Some strategic activities, such as the decision to patent or not, should normally be considered during the technology development phase. As we mentioned, intellectual property management and protection is the focus of the next neighbourhood.

Intellectual Property Protection Neighbourhood - Safeguarding your Idea & Technology

In the "IP Protection" neighbourhood, we consider how the hard work of the first two quadrants that resulted in newly developed technologies and associated intellectual properties can be most appropriately secured for the exclusive use of those who developed them. As you will see, there are a number of different options, each with its own strengths, weaknesses and areas of application.

The first step in the development of an IP protection plan is to complete an inventory of the intellectual property assets currently held. This involves the identification and listing of:

•  Patented inventions,
•  Unpatented inventions,
•  Trade secrets,
•  Copyrights,
•  Trademarks, and
•  Design registrations.

Let's review each of these types of intellectual property assets in turn. Patented inventions are the most straightforward, since a patent provides the holder exclusive right to exploit the technology covered by the patent for a set period in a given jurisdiction. Patents are generally obtained for inventions that are key to an important process or product and without which it would be difficult or impossible to duplicate the technology in question. Companies may also patent inventions for defensive purposes, to bar entry to a market by a competitor.

However, for a number of reasons, not all inventions should be patented. Patents require disclosure of the details of the technology and this may provide more information to the competition than is desirable. Thus a company may choose not to patent a given invention and instead maintain it as a trade secret.

In addition, patents are also expensive to acquire and maintain. Patent maintenance fees need to be paid on a regular basis to keep the patent in force. The decision to keep or abandon a patent is typically based on the strategic value of the patent to the operation of the business. Factors favouring the maintenance of patents include:

•  The freedom to operate (make, use or sell products),
•  The provision of a "technology fence",
•  Controlled access to a market niche, and
•  Licensing opportunities.

Alternatively, patents may be abandoned when:

•  The patented inventions have been superseded and rendered obsolete by newer technologies.

•  A business' focus and product lines have changed and the business no longer needs the patent, now or in the future, and there is no potential for licensing.

Trade secrets constitute another form of IP 'protection'. By keeping a technology secret, the company ensures that it is not available to others, providing of course that the invention cannot be discovered by reverse engineering. However, the holders of trade secrets run the risk that the inventions will be independently discovered and patented by a competitor, which would effectively impede the right of the original inventors to use the technologies.

Finally, copyrights, trademarks and design registrations are similar to patents in that they provide the holder exclusive right to exploit the particular item in a given jurisdiction. However, they differ from patents in detail and application.

Note that the development IP management plan requires many business decisions to be made, often with the guidance of an IP professional. Securing of patent and trademark protection requires the input and special services of patent and trademark agents.

Exploitation Neighbourhood - Cashing in on your Idea & Technology

The "Exploitation neighbourhood" is always the ultimate destination of any technology development initiative. As businesses negotiate their way through the challenges of the Idea Creation, Technology Development and Intellectual Property Protection neighbourhoods, it is the Exploitation neighbourhood that has been kept in view. Once a product or technology idea has been fully developed and the associated intellectual assets are appropriately safeguarded, the commercialization plans can be developed and implemented. Normally, a company develops intellectual assets specifically for the purpose of exploiting them in its own business. However, once the scope and versatility of the intellectual assets are fully understood, they can often be commercialized in a variety of ways. As shown in our roadmap, there are several different commercialization or exploitation options, each with its own set of implications. These include:

•  Use in the existing business,
•  Creating a subsidiary or spin-off business,
•  Use in joint ventures, and
•  Licensing-out.

The table below briefly summarizes each of the commercialization options and examines the ramifications of each option.





Characteristics of Alternative Technology Exploitation Options

Application

Option

New

Capital

Requirements

Highest - 10

Lowest - 1

Personnel Requirements (Including Ongoing

Customer Service Needs)

Most - 10

Least - 1

Time Needed to Access the Marketplace

Longest - 10

Shortest - 1

Accessibility to

Worldwide Markets &

Broadly-Based Applications

Best - 10

Poorest - 1

Liability &

Exposure

to Risk

Highest - 10

Lowest - 1

Include in Current Business Operations

of the Technology Developer

9

New manufacturing and production infrastructure capital investments are often required in order to exploit the new technology.

9

Unless an exact fit with the current operations exists, additional personnel core competencies are generally required.

9

For new technologies, where new channels to market need to be developed, considerable time and effort could be required and lost business opportunities could result.

1

The technology developer is often not positioned to fully exploit its own technology. Marketing capabilities often reside in limited geographic area and are useful for specific applications.

10

With no "partner" to share the liability, the technology developer will have the highest liability with this approach.

Set-Up a

Subsidiary or

Spin-off

Company

10

This option would have the highest need for new capital. for both manufacturing needs and for funds required to set up a separate business entity.

10

Personnel with the needed competencies will be to either be hired or transferred from the technology developer in order to effectively exploit the technology. Additional administrative personnel would be needed to operate the business.

10

For new technologies where the channels to market need to be developed, considerable time and effort will likely be required. This could result in lost business opportunities.

2

A subsidiary business would be only slightly better positioned to exploit its technology in worldwide markets and in new applications than the technology developer.

8

The liability associated with the deployment of the technology is for the most part transferred to the s ubsidiary or spin-off company.

Establish a

Joint Venture

3

The joint venture partner would provide the major capital and production facility investment, while the technology developer's contribution would be limited primarily to the technology.

4

A joint-venture greatly reduces the human resource demand on the technology developer and tends to limit the personnel requirements to primarily technical staff.

7

The JV partner would generally provide personnel needed to produce and sell the technology. The technology provider's personnel contribution would be limited to technology related aspects.

6

A joint venture partner would be selected for its ability to provide access to new applications and world-wide markets.

5

A joint venture enables the business liability to be shared with the joint venture partner. Liability needs to addressed with in a joint venture agreement.

License the

Technology

1

Licensees often utilize their existing manufacturing infrastructure to produce the licensed technology. Licensor capital requirements would be related to marketing, technology transfer and license agreement management.

1

Ideally staffed licensees will be able to effectively exploit the technology, while the licensor's needs are limited to the staff required to transfer the technology and manage the license agreement.

1

Ideally located and positioned licensees with the necessary staff and infrastructure can quickly access the market, once the technology involved has been transferred from the licensor.

10

Strategically located licensees with key industry positions and focus will enable the broadest market penetration and widest range of technology applications.

1

Licensing enables much of the business risk to be transferred to the licensee.

 

The Vertex Angle is a regular publication of Vertex Intellectual Property Strategies Inc., which provides a source of ideas for intellectual property managers and licensing professionals. If you would like to receive our newsletter, please provide us with your contact information.

The layout and graphics for the roadmap were produced by Capstone Communications Group.

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Toronto, Ontario
Canada M8X 2C7
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