The article and comparison chart below appeared in the April 2008 issue of Technology Transfer Tactics.

The question for TTOs is whether it is worth your time, effort, and limited marketing dollars to participate in one or more of these exchanges. To date, many large, reputable TTOs have had little to no success marketing technologies in this way, but a number of them are nonetheless experimenting with the approach because the potential value is hard to ignore. “We don’t know which [IP exchanges] are better for what [technologies], or which models are going to succeed in the end, so right now we are trying to do our own due diligence,” explains Brendan Rauw, portfolio director in the TTO at Columbia University in New York, NY.

Rauw points out that Columbia has just begun working with two IP exchanges — the Kansas City, MO-based Kauffman Foundation’s iBridge Network, and Ocean Tomo’s Dean’s List, based in Chicago, IL. He emphasizes that the school is open to possibly working with some additional IP exchanges as well, although he has yet to see any successful matches made from the approach. “In the end it will come down to what sort of value they can demonstrate,” he says.

Key selection criteria

Similarly, Imelda Oropeza, a copyright licensing and marketing specialist in the Office of Technology Licensing at Stanford University, has seen a number of IP exchanges come and go over the past few years, and is aware of only one instance in which a successful match was made at Stanford through the approach. She acknowledges, however, that the way IP exchanges are set up, it is not always clear to the TTO when a deal has been consummated as a direct result of an online posting. In light of this limited track record, she says, there are three main criteria the Stanford TTO is looking at when considering whether to participate in an IP exchange: reputation, automation, and fee structure.

In terms of reputation, Oropeza suggests that the critical issues have to do with what other organizations are posting technology on the IP exchange, what kind of technologies they are posting, and what industries the IP exchange is targeting. She maintains that TTOs should also consider what the IP exchange is doing to attract the appropriate industries, and to make the platform easy to use.

“One of the challenges we hear from people potentially interested in licensing technologies is that they don’t know everything that is out there, and they feel like they have to do a lot of work to find out who has what,” she says. Consequently, she points out, IP exchanges that offer attractive search tools for the user, such as an ability to cluster similar or related technologies together, are more likely to attract potential licensees than exchanges that don’t have these features.

While attracting potential licensees is obviously critical, the platforms also need to be easy to use for the TTOs, and this is where automation comes in. Many of the IP exchanges offer the ability to import data from a university website or IP database onto their platforms. While this feature may not be essential to smaller institutions that have only have a handful of technologies to post, it is critical to large, research-based universities that have hundreds of technologies in their portfolios. “There are so many demands and short resources that we only consider participating [in an IP exchange] if they can somehow download the information directly from us so that we don’t have to individually post things,” says Oropeza. She also insists that any IP exchange the school signs up with be capable of automatically updating the information as well, so that it is always fresh.

Even when an IP exchange offers this kind of automation, however, Rauw advises TTOs not to underestimate the amount of labor involved with managing the process. “Some services require technologies to be classified according to a set taxonomy or hierarchy,” he says, noting that if you don’t use the same classification system, someone has to go through all of the technology and make the appropriate changes. “Data needs to be tweaked and checked, and when you have a large number of technologies, that can be a time-consuming process.” Further, even after the data is uploaded, Rauw points out that someone needs to make sure it stays up to date.

Feel free to negotiate

In addition to the time and labor involved, you should also definitely consider the fee structure, sources agree. Most of the exchanges offer an array of payment options — ranging from monthly or annual membership fees to success fees, which typically involve paying the IP exchange a certain percentage whenever a successful match is made. Keep in mind, however, if none of the payment alternatives offered is acceptable, many of the exchanges are amenable to negotiation.

There is no question that big-name schools often have the upper hand in these situations because in many cases the IP exchange may have more to gain from getting the school to post its technology than the school has to gain from the added exposure. Indeed, with the Stanford name, Oropeza points out, her TTO refuses to do business with any IP exchange that charges any kind of fee at all. She particularly advises against payment options that include success fees. “The downside of structuring things that way is that it encourages TTOs to post only those inventions that they are having a harder time licensing,” she says. “If someone thinks they can license something, then they would be less likely to post it [on the IP exchange] because then they would have to share revenue.”

Smaller or less well-known schools may not have the negotiating power of Stanford, but many of the IP exchanges offer flexibility in their fee structures. The non-profit iBridge Network, for example, has three membership levels including one level that is free. In addition, brand new IP exchanges often offer free or highly attractive posting rates for early users. Newly launched SparkIP, for example, has attracted an impressive list of top-notch institutions, such as MIT, Stanford, Johns Hopkins, and the National Institutes of Health, in part by enabling these organizations to post their technologies free for a six-month trial period, according to Ed Trimble, SparkIP’s CEO.

Measure of success

How successful are IP exchanges at actually making matches? That is hard to pin down since TTOs often aren’t sure what prompted a particular deal, and in the absence of success fees the IP exchanges aren’t entirely clear on that point either. However, some users would argue that the value of these portals shouldn’t be viewed so much in terms of deals made, but rather in terms of exposure.

On that score, Didier Leconte, the manager of business development, science and engineering for Montreal-based Univalor, a limited partnership that seeks to commercialize innovations for a group of Canadian universities and researchers, maintains that IP exchanges can offer considerable value. For instance, he points out that 15% to 20% of the traffic to the organization’s website is via Flintbox.com, the Vancouver-based exchange that Univalor began working with two years ago. “We could not afford to have a marketing team within Univalor to actually promote all these technologies without Flintbox, so it is not a question of having a deal,” he says. “It is a pretty good tool for us to be exposed to the market.”

Leconte points out that Univalor works with other IP exchanges as well, and he believes the approach is essential to making industry connections. “The problem that people have when looking for technology is they can’t spend hours on the website of each TTO organization in the U.S. or worldwide. They need an interface that provides all of that information, and actually provides a search engine,” he says.

Contact Rauw at br2216@columbia.edu or 212-854-8171; Oropeza at Imelda.Oropeza@Stanford.edu or 650-725-9039; Leconte at Didier.leconte@univalor.ca or 514-340-3243, ext 4224; Trimble at contact@sparkIP.com or 404-477-2525.

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Comparison shopping for an IP exchange

All of the IP exchanges offer a marketplace where potential licensees can shop for innovations, but each one has unique characteristics that may make it a more suitable choice for a given TTO or technology. While pricing is always important, it also pays to look at ease of use, name recognition, client base, and the primary mission of the portal. Key features of seven prominent IP exchanges are summarized below.

iBridgeNetwork.org

Launched in January of 2007 by the Kansas City, MO-based Kauffman Foundation, the iBridge Network now has 38 campuses listing technologies. And at press time its director, Laura Paglione, indicated that a number of universities were about to post large portfolios. “While today we are at 1,600 innovations, I imagine in the next two months that number is going to explode,” she says.

Paglione emphasizes that what distinguishes iBridge from the other IP exchanges is its focus on the entire research pipeline. “Yes, there are things in there that are licensable technologies, but we also have a lot of things that fit much earlier — things like material transfer agreements,” she says. “Everything on iBridge is university-based research.”

Options available to universities include online transactions, writing assistance to help with marketing, access to a symposium series, and the ability to write content directly onto the network via an application programming interface (API). “When someone uses the API, they can click a button and everything is updated on the iBridge Network from their own database,” says Paglione.

The iBridge Network offers three levels of membership: smaller universities can post up to ten technologies at no cost, mid-level members can post up to 75 technologies at one time for $1,000 per year, and the highest level of membership enables universities to post an unlimited number of technologies for $3,000 per year. There are no fees associated with successful matches. Paglione is aware of 455 transactions that have taken place via iBridge, but she says there have probably been many more transactions resulting from the network that have taken place offline.

SparkIP.com

The creators of SparkIP clearly wanted the exchange to be known for its sophisticated search tools, capable of organizing IP into related groups, and then linking these groups with other correlating groups. “We’ve spent the past two years creating these algorithms that organize or cluster innovation, and there are about 40,000 of these SparkClusters [so far],” explains Ed Trimble, CEO of Atlanta-based SparkIP. He notes that users can search and analyze patents, patent applications, and also licensable technology on the site, lending it a high degree of additional value beyond IP matching. “We wanted to create a site that people would come to visit and use on a regular basis, and the exchange would be just one of the things they could do.”

Launched in October of 2007, the exchange has already amassed more than 5,700 technologies from 14 top universities and government labs. This process has no doubt been accelerated because, for the time being at least, the company is allowing institutions to post all of their technologies at no cost. “To get something like this off the ground, and to make it effective, and to bring the licensing community here, you have to have critical mass,” adds Trimble.

SparkIP plans to eventually initiate a listing fee of $99 per technology per year, but Trimble emphasizes that there are no plans to implement any success or transaction fees. Instead, the exchange plans to bring in revenue by charging subscription fees to users interested in advanced functionality such as portfolio management and report generation. “With our living, breathing platform, we can layer in lots of very interesting data sets for the future including scientific literature, available grants, SEC filings, and any information related to innovation that adds value to the scientific community and our user base,” Trimble says.

TechTransferOnline.com

Another new entry in the IP exchange arena, TechTransferOnline.com — also known by its corporate name eIP — was established by Bloomfield Hills, MI-based CJPS Enterprises, a consulting firm that specializes in commercializing technologies. Its CEO, Christophe Sevrain, explains that the exchange grew out of his own frustration in trying to find IP. “It was supposed to be a tool for us, but it got so much attention and response that we decided to [spin it off] as its own company,” he says.

Built into the site is a way to post confidential information about an innovation that browsers can only see if they agree to an online non-disclosure agreement (NDA). And whenever an NDA is signed, the person who listed the technology receives an e-mail with the appropriate contact information. The site also enables users to upload documents, pictures, presentations, and even patents if they choose, all of which are searchable. There are multiple ways to upload available technologies onto the site, Sevrain explains, depending on what a TTO wants to do. In fact, eIP can automatically sweep new technologies from a university site onto the exchange on a regular basis, if that is desired.

The online service began by charging based on a variety of fee structures, but in May announced that it was opening up to all non-profits with free listings.

For the first three months of operation (January through March of 2008), TechTransferOnline was only open to institutions interested in posting technology. The idea, according to Sevrain, was to make sure the shelves were well-stocked before shoppers were allowed to browse. “If we don’t have the volume, no one will come and visit the site. We can all agree on that,” he says. Within the first month, the site expected 1,000 technology listings but has far exceeded that estimate, Sevrain reports. At press time, listings had passed the 10,000 mark.

TechEx.com

One advantage that TechEx has over some of the other exchanges is that it has been around for nearly five years. And when the exchange became available for acquisition, Tampa, FL-based UTEK Corporation did not hesitate. “It had very good name recognition, it was started by an Ivy League School (Yale), and it was one of the first ones,” explains Doug Schaedler, UTEK’s chief operating officer.

However, what many TTOs like about TechEx is the fact that there is no charge to post their technologies. TechEx makes what it calls “alliances” with universities whereby it automatically uploads their technologies to its database, and regularly updates the data as well. “We have developed a program which we call a crawler that is very similar to the way Google works,” explains Carlos Mejia, VP of information services for UTEK. “It recognizes everything that is on a database, and we have the ability to go and check at the end of each day to see what has changed.”

TechEx generates revenue by selling subscriptions to various information services which enable users to actually search UTEK’s databases. For example, Knowledge Express is a business development service that includes proprietary databases, e-commerce licensing opportunities, company profiles, royalty rates, and other contract details, according to Mejia. “We have compiled into one stop what it would take months for a whole department to gather for a specific technology,” he says. TechEx subscription fees range from $2,950 per year for a single user to $15,000 or more for multiple geographic locations.

Mejia indicates that nearly 44,000 technologies are posted, and he estimates that the exchange gets 150,000 hits every month, but he does not have data regarding how many matches have been made as a result.

Yet2.com

Some exchanges are more focused on catering to the needs of established technology providers than they are to university TTOs. For example, yet2.com works with companies like Sony, Panasonic, Philips, and Microsoft. However, that doesn’t mean TTOs shouldn’t consider using the exchange in some instances, according to Tim Bernstein, executive VP of yet2.com. He points out two ways that universities can reap value from participating.

“First, anybody can sign up and monitor the technologies, and in particular, the technology needs that are coming onto the yet2.com marketplace,” he says. Technologies that companies or investors are looking to acquire are posted on the exchange as TechNeeds. “Universities often find a very valuable role in solving these technology needs, so that is a great first way for universities to interact with yet2.”

Secondly, universities are free to post technologies, which are presented as TechPaks, on the exchange. However, the fees for doing so start at $3,500 per year, per technology, and there is also a success fee of 15% when a successful match is made. Bernstein adds that the exchange will consider volume discounts for universities that want to post several technologies, but he advises TTOs to be selective. “The only technologies that we are helping to license from universities are ones where there is a fairly clear identification already of the applications that the technology would play in,” adds Bernstein.

Why are the fees so steep? Bernstein says the exchange has a few university clients, and that they are pretty excited about having access to the global 500. But he also points out that the company radically shifted its business model about four years ago from just being an online exchange to being a full-service, active consultancy. “So, in addition to posting out to our online marketplace…we also identify and then proactively contact those 30, 40, and 50 companies who should be interested in an opportunity,” he says. “Then we marshal promising introductions all the way through to the deal, so we play a facilitation role in making sure that deals that should close, do close.”

Thedeanslist.com

The idea behind OceanTomo’s entry in the IP exchange arena was to provide a forum that is as open as possible, according to Dipanjan (“DJ”) Nag, director of the firm’s Chicago office. “If you want to go on to any portal and search for technology, you would generally have to register yourself, get an ID and a password, and then go search for technologies,” he says. However, Nag points out that people can browse through The Dean’s List anonymously, only needing to provide more information if they have a question for a potential seller or licensor. “One of the concerns for any buyer or licensee would be disclosing their identity before they have actually made a decision, so we try not to track who is visiting the site.”

Similarly, developers wanted the forum to be broadly suitable for any type of technology at virtually any stage of development. Currently, the exchange lists more than 2,000 patents, including technologies representing life sciences and pharmaceuticals as well as engineering and physical sciences. And Nag points out that there is functionality to help potential licensees key in on relevant IP. “We have 140-plus listing categories, so if one university puts up a patent, and there are three other universities that have similar types of IP assets, then a buyer can come in and take a look at all of those assets in one pool,” says Nag.

Universities can choose between two different fee structures for using the exchange: a listing fee of $1,000 per month for large institutions (or $1,000 per year for individuals), or they can pay a success fee of 10% whenever a successful match is made.

When universities are ready to proceed with posting their technology, they then must decide how they want their innovations categorized, but the rest of the uploading process is largely automated, according to Nag. “We have a back-end administration system that imports all the data, so essentially it maps the university’s database structure to ours,” he says. “The technology can be uploaded and made live in a day or two.”

Flintbox.com

If anyone wants to know what kind of innovation is going on in Canada, Flintbox is a good place to start. The Vancouver-based exchange is now being used by roughly 100 research institutions, three-quarters of which are Canadian. “All major research institutions in [Canada], including a number of the National Research Council labs and federal government labs, are using Flintbox to post their early-stage research licensing opportunities,” emphasizes Stephen Smith, its president.

The exchange served as a model for Kansas City, MO-based iBridge Network, and it shares many similarities in functionality including the ability to complete transactions online — a particularly useful feature with respect to higher-volume, non-exclusive licenses and material transfer agreements. “When there is an issue of having to do more than one license on something and the terms of that license are fairly clearly laid out, it really eases the administrative burden on a TTO by using Flintbox,” adds Smith.

Another plus: Since the listings that go into Flintbox were designed so that they would be optimized by Google, the site gets a ton of traffic. “What we are hearing from TTOs is that when they linked Flintbox to their primary website, our traffic started spilling off onto their primary website, and they’re actually getting more sponsored research now,” says Smith. “So they are benefitting from Flintbox in an ancillary way — not only by getting licensing deals, but also their primary website is getting more traffic.”

Smith adds that 80% of the traffic on Flintbox comes from Google searches, and that people find individual technology landing pages from these searches, then go directly to those pages.

Like most of the exchanges, Flintbox offers a range of fee structures. A small business or TTO can create a profile on Flintbox for $60 per year. Group memberships range from $600 to $5,000 a year, depending on the number of accounts needed and the activity level anticipated.

Flintbox has facilitated more than 6,000 licensing deals in three years, Smith says, adding that there have definitely been additional deals resulting from an initial contact that was enabled by the exchange. “We’ve got about 5,000 industry accounts from 109 countries around the world,” says Smith. He acknowledges, however, that while technologies posted on Flintbox get interest from U.S.-based organizations, no American schools are currently listing technology on the site. Nonetheless, Smith says he has his hands full trying to keep up with new institutions that are ready to sign up.

“In the early days we were having to be evangelical with Flintbox, telling research institutions to have faith, and that if they used this application, good things would happen,” he says. “What we are seeing now in this late-adopter mode is a more comprehensive embracing of [the concept] than we have ever seen before.”

Editor’s note: The online IP exchange market is competitive and in a state of rapid development and change. Information presented in this guide may have changed since it was first published. Please contact individual vendors for complete information on their current fees and offerings.

Contact information for IP exchanges

iBridge Network
www.iBridgeNetwork.org
800-573-5136
info@iBridgeNetwork.org

SparkIP
www.SparkIP.com
404-477-2525
contact@SparkIP.com

TechTransferOnline
www.TechTransferOnline.com
248-593-5926
info@TechTransferOnline.com

TechEx
www.TechEx.com
800-529-5337
info@knowledgeexpress.com

Yet2.com
www.Yet2.com
866-938-2266
info@Yet2.com

The Dean’s List
www.thedeanslist.com
312-327-4400
deanslist@oceantomo.com

Flintbox
www.Flintbox.com
604-678-9981
support@Flintbox.com