Commercialization for Inventors

First step: the invention disclosure

A creator of intellectual property at The University of Texas at Austin must disclose any intellectual property subject to ownership by the University if he or she believes that there may be commercial potential. The inventor using University resources, either as part of an instructional academic program or as part of the course and scope of his or her employment, must involve the Research Manager responsible for the resources used when disclosures of intellectual property are made. The Research Manager is the faculty member and/or researcher in charge of the research program in which the intellectual property was developed (e.g., Principal Investigator, Department Chair, Center Director, or Group Leader), and he or she is responsible for the management of all intellectual property generated by the research team.

An inventor's first step in the commercialization process is to submit an invention disclosure. This is the beginning of a relationship between a researcher and OTC. By submitting a disclosure, the inventor enables OTC to offer assistance and support throughout the commercialization process if the university asserts its interest in the technology.

What is a disclosure?

The disclosure is a confidential document that provides both scientific and legal overviews of a technology. The document addresses technical aspects of the technology, such as the science behind the invention, its advantages over prior art, its potential drawbacks, and its scope of use. In addition, the invention disclosure addresses legal matters (such as IP ownership and encumbrances).

How do I submit a disclosure?

Invention disclosure forms are available in Word format in the Forms for Inventors section of this website. Inventors should save the appropriate Word document to their computer, complete it, and send to OTC in electronic form, followed by a hard copy with inventors' signatures.

What happens next?

After submitting your disclosure, someone at OTC will contact you to confirm receipt. OTC assigns a UT Austin file number to every invention disclosure received and enters the technology into the OTC database. Based on the nature of its science, each invention is assigned to a licensing associate (LA) who specializes in the field. The licensing associate assumes responsibility for reviewing the technology, working with the inventor and the Research Manager. Legal assistance may be sought to address issues regarding patentability of inventions.

Within 45 calendar days of receipt by OTC of a complete disclosure, OTC and the Vice President for Research will advise the inventor and the UT System Office of General Counsel whether or not the University will assert its interest in the intellectual property. If extenuating circumstances exist that make this 45-day time period infeasible, the Vice President for Research will discuss the circumstances with the inventor(s) and Research Manager before determining a reasonable timeframe for a decision. If the university does not assert its interest within the 45-day time period (or other time period set due to extenuating circumstances), the University shall offer to release the intellectual property to the inventor(s) under appropriate release provisions.

Commercial evaluation

OTC reviews each disclosure to determine the fit of the technology to the current marketplace. Successful commercialization requires the existence of a market need for the innovation. The LA often meets with the inventor(s) and conducts self-directed research to aid in the evaluation process. To acquire information about these value indicators, the OTC conducts a thorough market review with information gathered from industry personnel, venture capitalists, and governmental/economic development contacts. A brief background check on prior art is run to ensure novelty of the invention. This comprehensive review forms the basis of the commercialization strategy for the technology.

After reviewing the invention, the OTC sometimes suggests that patent prosecution and marketing be delayed to allow the technology and/or market to ripen. This, at least temporarily, brings the commercialization endeavor to a halt. However, OTC will welcome any future developments or new inventions the inventor might present.

Legal review

The final step of the process is the legal review. A more thorough investigation of prior art is conducted. Legal counsel helps address questions regarding potential roadblocks to patent acquisition and enforceability.

Possible outcomes

Upon completion of these stages of review, OTC, working with the Vice President for Research, the inventor and the Research Manager, has four possible courses of action:

UT asserting title. In this case, OTC will file a patent on the invention (unless it is to be handled on a copyright or trade secret basis) and begin actively marketing the invention. The initial patent filing is typically a U.S. provisional filing, but may be a U.S. non-provisional filing or a Patent Cooperation Treaty (PCT) filing.
Offering to release the invention to the inventors (covered above)
Requesting that the Responsible Manager present additional enabling data with respect to the invention
Closing the file. The file will be closed if either (a) the inventors are unable in the near term to provide enabling data (file closure does not preclude the inventors from later submitting a new IPQ when enabling data is available); (b) a decision is made with the Responsible Manager to allow the invention to go into the public domain; (c) a determination is made with the Responsible Manager to combine the disclosure with another disclosure; or (d) the IPQ failed to disclose patentable subject matter.

Technology marketing and licensing

The Vice President for Research and OTC, along with the inventor and the Research Manager, shall jointly decide how, when, and where the intellectual property is to be protected and commercialized. OTC will inform the inventor and Research Manager of relevant deadlines and commercialization activity. If the inventor wishes, he or she may be actively involved in the development of the commercialization strategy.

Patent protection is sought for most inventions, with the exception of some software. In certain cases, other IP protection such as copyrights or trademarks may also be considered. Outside patent counsel prepares and files all University patent applications with the input of OTC and the inventor.

OTC has a responsibility to the University and the community to maximize the benefit of each technology and therefore engages the most promising proposed commercialization path. The University partners with entities in industry to pursue this commercialization effort. Partners vary from investors and entrepreneurs to large enterprises.

Technology transfers are made from the University through patent or technology license agreements, which are constructed to meet the needs of the commercialization partner while compensating the University and the inventor for their contributions. Due to the nature of university research, UT Austin retains the rights to practice and publish its intellectual property. Other variable licensing terms include compensation, exclusivity, fields of use, duration, sublicensing rights, and required diligence milestones.

University compensation can take various forms but is usually some combination of a cash fee, patent expense reimbursements, royalties, and equity in the commercializing entity. The inventor personally shares in this compensation. If a university inventor passes away, the inventor's share of licensing income will be paid to the inventor's estate.

OTC has made great strides in streamlining the licensing process and has dramatically reduced the time to execution. OTC negotiates both the business and legal terms of each license agreement. While it is possible to negotiate terms and execute an agreement in less than a week, it is not uncommon for negotiation to last for several weeks. OTC has reasonable template agreements which, if used in their entirety, leave only the business terms such as compensation as points for negotiation. If the commercialization partner is unable to accept certain legal terms or language in the OTC template agreement, a more extensive legal review process is required and execution of a final agreement will take longer.

Licensing of software is detailed in the Software Licensing and Copyrights section of this website.

One option inventors may choose is to establish a startup company. While this is primarily under the inventor's own initiative, OTC offers assistance in the process.