Transferring Technology from Lab to Market

What does lab to market mean?

Lab to market (L2M) is the process of transferring new technologies from the laboratory to the marketplace.

Several factors at the market level are necessary to generate effective technology transfer processes, such as sufficient firms that are able to invest the money, time, and efforts to turn the IP into marketable products; a market that is ready to buy the product once it has been fully developed and is ready for sale; an absorption capacity to assimilate new knowledge and apply it to commercial ends. At the same time, universities and research institutions also have several market-related challenges to address in order to establish successful technology transfer agreements.

Academic institutions are particularly sensitive to challenges in dealing with the market environment for many reasons. First, because universities and research institutions are nonprofit organizations, even if they generate revenues through consultancies, services or technology transfer activities.

The main mission of university TTOs would rarely be financial, but rather focused on getting out research outcomes to users, and, if possible, collecting an income as return on research investment.

As mostly a “market observer” than player, academic institutions have a different understanding of the potential value of a technical solution on a specific market than market players, such as venture capitalists, industry partners or technology brokers.

Also, due to the lack of the real IP markets in the most emerging economies and rather non-transparent information regarding mechanisms and tools to be applied in determining the value and subsequently the price for transferred IP, academic institutions often have asymmetric information and negotiation positions vis-a-vis their business partners. Due to their main mission, which is impact and not income, universities are mainly developing their internal capacities to evaluate technologies, based on internally defined criteria, and outsource IP valuation services, which go beyond calculation of the cost of technology development.

Network of business
(Photo: metamorworks/Getty Images)

IP marketing in the context of technology transfer

Another market-related challenge for TTOs is how to market technology that has potential. This includes identifying appropriate markets, attracting business partners that can further develop, manufacture and disseminate products based on university’s IPRs, communicating effectively with potential consumers, and transmitting the right messaging.

IP marketing is a strategy of IP commercialization, which helps not only to promote existing IP assets, but also to convince businesses of the marketability of potential innovations. Therefore, the first step in the IP marketing process is to assure that there is an application for the technology. Further, Patent Landscape Reports can help you understand the situation in the market, including the important stakeholders, non-covered fields of use and potential partners.

The Polish Association of Centers for Technology Transfer (PACTT) is a voluntary association of representative units of six Polish universities responsible for the protection, management and commercialization of university IP. PACTT supports the dialogue between business and science through brokers, who act as coordinators for companies to collect data about relevant available patents and discoveries.

Based on the preferences and expectations of enterprises, brokers prepare summary presentations and arrange meetings that bring together both parties: research teams and business stakeholders. One of the elements of this process is the support of scientists through PACTT in preparing business presentations, as well as companies – in building relationships with promising research teams.

The company's cooperation with PACTT means that the company:

  • Can rely and count on the current update information collected according to the profile of company’s interests;
  • Receives a dedicated broker who collects information from over 70 universities and presents them in a convenient form to serve the company’s needs;
  • Gets a unique access to IP of Polish academic science in one place.

Get more support

WIPO offers capacity-building programs in the area of IP marketing providing following contents:

  • Diagnostic Phase: Analysis of the Existing Portfolio;
  • Identification of the Potential Buyers/Partners – use of Patent Landscape;
  • Tech Transfer (TT) Management Key Factors of Success;
  • Managing a Successful Relationship with the Potential Buyer.

IP valuation in the context of technology transfer

IP valuation is the process of identifying and measuring potential benefits and risks of an intangible asset. IP valuation is important for business planning, licensing, acquisitions, mergers, investments, joint ventures and loans. Valuation methodologies are important, because funding institutions are often willing to consider investment in research and innovative technologies, but lack the methodology with which to assess the value of IP assets.

Evaluation of IP is a process of estimating the value of the technology based on its technical advantages (how well and innovatively it solves the problem), market applicability (whether there is a market need), and the level of “freedom of operation” for industry partners (whether there are similar protected inventions and potential danger of IP infringement).

Valuation of IP is projection of the potential value that the technology may generate in the specific market and context, taking into consideration the risk and changing value of the money over the time.

TOs are evaluating technologies when deciding on IP protection and commercialization of new academic inventions. Due to this process, TTOs focus on the inventions that have the highest chance to succeed on the market – which is often only 20% of research disclosures.

IP valuation is considered as one of the most complex issues in the process of IP commercialization as it is very volatile and subjective. IP valuation, at least in its quantitative approach, appears as a scientific calculation. However, it is only an estimation depending on the experience of the valuator in the particular area and his or her ability to make technical, market and IP projections in the future (except in litigation where valuation of the lost benefit would be done based on past events and existing market data). In addition, the value of an intangible asset further depends on the context, thus the same asset can simultaneously have different values in different contexts.

Valuation process can be challenging for multiple reasons, starting with the fact that universities and R&D institutions often deal with early-stage technologies, very far from market penetration and use, which makes any projection of the future benefit extremely risky – at this stage it is very difficult to define potential fields of use and thus to identify a suitable market in which technology would be exploited. The other impeding element is the lack of IP professionals with appropriate skills to conduct IP valuation.

There are two major IP valuation approaches:

1. Qualitative IP valuation

Qualitative IP valuation of an invention is based on defined criteria related to technical, IP and market requirements in order to determine if the research result is valuable for further investment and IP commercialization, usually done in pre-commercialization phase.

2. Quantitative IP valuation

Quantitative IP valuation is the process of measuring the potential benefit and risk that can be generated by an IP under assessment.

The quantitative approach, which aims to give monetary value to IP, has a number of developed methodologies associated with it, among which the most used are:

  • Cost Method
  • Market Method
  • Income Method (which has numerous variations such as Discounted Cash Flow, Monte Carlo program, Real Option etc.).

Unfortunately, there is not one IP valuation model that fits all needs, especially since the ability of the invention to provide value depends on the context, market maturity, potential partners, specific sector etc. Depending on the context (IP audit, tax reporting, fundraising), the same technology may simultaneously generate different value. Further complexity comes from the subjective approach of every valuator, that is why the estimation is always expressed in a range of values.

Get more support

To help academic institutions to understand the core approach to IP valuation and to upgrade their capacity to deal with market challenges, WIPO developed valuation tools:

IP valuation presentation by Dr. André Gorius

Learn more about the importance and challenges of IP valuation for business from WIPO's distinguished speaker, Dr. André Gorius (Former IP Valorization Director at Solvay; Chair IP Valuation Committee at LESI). For more information on IP valuation, see the "Ask the Expert sessions" available on the eTISC platform.

IP commercialization in the context of technology transfer

IP commercialization is the process of creating economic value by converting knowledge, discoveries and inventions into new or significantly improved products and services.

IP commercialization process

The IP commercialization strategy can be different at each university or research institution, but usually involves the following steps:

  • submission of the invention or discovery to TTOs (usually through invention disclosure forms);
  • evaluation (assessment to determine technical superficity, IP status and potential market value of the invention – base for "go" or "no go" for protection and commercialization);
  • protection (intellectual property or other type of protection);
  • business case and commercial plan;
  • IP marketing;
  • licensing – as the most frequently used technology transfer means;
  • product development plan; and
  • market dissemination and commercialization.

What are the benefits of research outcomes commercialization?

The benefits of research outcomes commercialization are usually shared among different partners ranging from universities and research institutions to inventors, research departments, investors, private sector, etc. Many universities and research institutions have well-defined policies to support, encourage and enable the commercialization of knowledge and technology. They may include the establishment of knowledge transfer offices and associated policies for invention support, creation of start-up and spin-off companies, programs to sustain company development, incubators and accelerators, research parks, and participation in organizations and networks focused on IP commercialization.

IP Commercialization and Knowledge Transfer Toolkit

Designed for Universities and Research Institutions

The IP Toolkit is designed to help universities and research institutions with knowledge/technology transfer and IP commercialization. It provides university managers, knowledge transfer officers and researchers with instruments and tools to develop their own entrepreneurial approach to IPR management.

  • Model Agreements DOC, Model Agreements
  • Academic Intellectual Assets Map DOC, Academic Intellectual Assets Map
  • Hypothetical Case Studies DOC, Hypothetical Case Studies