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A Guide to UMIP The University of Manchester’s Agent for Intellectual Property Commercialisation

UMIP - REPUTATION AND VALUE THROUGH INTELLECTUAL PROPERTY®


Dear Colleague, I am pleased to provide an introduction to this publication which outlines the activities of UMIP (The University of Manchester Intellectual Property) and provides a practical guide demonstrating how you, the University and the wider society can benefit from the commercialisation and application of knowledge, expertise and intellectual property created and developed in the University. At heart, all of the University’s activities are concerned with the business of knowledge transfer. Through our teaching and research, we play a key role in advancing education, discovery and innovation, but also more broadly in enriching our culture and enhancing the quality of public life in our society. The protection and commercialisation of our expertise and intellectual property is simply another aspect of that broad knowledge transfer process. If handled professionally, it can also provide a valuable revenue stream for the University and a lucrative source of additional financial reward for individual members of academic and research staff and students. It is for these reasons that exemplary knowledge and technology transfer is identified as a key strategy in our Strategic Plan.

In pursuing that strategy, the University has formulated one of the country’s most generous and forward-thinking policies on Intellectual Property and commercialisation. It has also set itself ambitious targets to increase invention disclosures by staff, the proportion of our research income derived from industry sources and the value of licences granted to third parties to develop IP created in the University. The aim of all of these policies is to motivate you and make this University the preferred destination for innovators and creators of intellectual property and the preferred partner for major national and international companies. UMIP is wholly owned by the University, acts for the University and has responsibility for taking forward these policies and managing the commercialisation of University Intellectual Property. It operates through a network of its staff based in the Faculties. This Guide explains in detail how UMIP operates and how you and the University can benefit from its services in this important area of activity. I hope this booklet will encourage you to explore further the opportunities for commercialisation arising from your research activities.

Professor Dame Nancy Rothwell FRS President and Vice-Chancellor


Our aim is to make this University the preferred destination for innovators and creators of intellectual property and the preferred partner for major national and international companies. Professor Dame Nancy Rothwell FRS


THE UMIP MISSION UMIP contributes to the aims and objectives of The University’s “Exemplary Knowledge and Technology Transfer” agenda by providing Intellectual Property (IP) management and commercialisation activities: UMIP enhances the reputation and value of the University by: > transferring science and technology to the market place through IP sale, licence or spin-out. > making an important contribution to the economy regionally, nationally and internationally and to the quality of public life. > reinvesting returns from successful IP commercialisation activities back to the University, for example, through income from the sale of spin-out company shares or royalty income from licence agreements. We look forward to continuing to play a full part in realising the University’s ambition for IP to 2015 and beyond.


Contents What is UMIP? What does UMIP do?

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How is UMIP organised and governed?

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Organisational chart

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What is Intellectual Property (IP)?

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What is IP Commercialisation?

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Why commercialise?

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The commercialisation process What do you do if you have an idea? Practical Support

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Key components for success

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The Innovation Centre (UMIC)

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For initial UMIP contacts, please see insert at the back of this guide. For further information about UMIP, please see our website: www.umip.com

Copyright The University of Manchester Intellectual Property, 2011 Based on an idea at MIT and The University of Michigan


What is UMIP?

Why should you read this? Generation of new knowledge is the heart of the University. This often leads to intellectual property (IP). As an employee of the University whether as an academic, researcher, administrator or technical staff member it is important that you know what IP is about and what the University’s agent for IP commercialisation, UMIP, does. Of course it is of particular relevance to anyone actively interested in knowing how to protect and commercialise IP. If you have an idea that you think has commercial merit then contact us.

What is UMIP?

UMIP is a division of The University of Manchester I3 Limited (UMI3) - the University of Manchester Innovation Group, created following the integration of UMIC, the University of Manchester’s Innovation Centre and UMIP. The name I3 (I-cubed) reflects the entrepreneurial spirit of UMIC’s and UMIP’s activities: Inspire/Invent/Innovate. You can find out more about the Innovation Centre on pages 28-29 of this Guide. UMIP consists of faculty oriented business management teams and an IP Services team backed up by a corporate services team provided by UMI3, which supports UMIP with services such as finance, legal and HR as well as sales, marketing and promotion. The UMIP office has secondees from its professional advisors as well as ‘associates’ such as designer-in-residence, regulator-in-residence, entrepreneur-in-residence and a Director of Entrepreneurship. Our website is www.umip.com UMIC’s website is www.umic.co.uk UMI3’s website is www.umi3.co.uk

The University of Manchester Intellectual Property ("UMIP") acts solely as agent for the University in relation to any matter relating to intellectual property and know how created at the University ("IP"). This is whether such IP is created by employees, students or others. UMIP does not represent anyone else in such matters. If anyone else requires advice in relation to such IP then they must take their own independent legal advice.

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The airplane stays up because it doesn’t have time to fall Orville Wright

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What does UMIP do?

UMIP was established by The University of Manchester to select, protect and where appropriate commercialise the results of research carried out by employees and research students within all schools of the University. UMIP works in highly positive relationships with researchers, entrepreneurs, business people, professional advisers and investors to achieve its goals.

In brief, UMIP: > Manages IP created at the University > Identifies, protects and evaluates the commercial potential of research outputs from all faculties > Holds the University's patent budget and manages its Proof of Principle awards and its seedcorn investment funds > Commercialises IP via the most appropriate route: sale, licence or spin-out > Has access to an extensive network of industry experts, consultants, professional advisers and investors

Inventions reached their limit long ago, and I see no hope for further development. Julius Frontinus, 1st century A.D.

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How is UMIP organised?

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UMIP consists of Commercialisation Executives, Licensing and Venture Managers backed up by an IP Services team. This team manages the University’s patent, trademark and design registration portfolio and conduct due deligence activities prior to IP commercialisation. The team also advises the University on IP issues.

The teams have been structured to provide the best possible service to all four faculties, with the Commercialisation Executives being your first “port of call”, and the Venture and Licensing Managers focusing on the project management of those IP projects which are progressing through UMIP’s innovation and development process.

Please see the insert at the back of this guide for your contacts.

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What is Intellectual Property, often called simply “IP”?

IP is a term used for the rights which protect your ideas and other forms of intellectual creation in just the same way that you own physical assets. Some rights have to be registered to be effective, others arise automatically without a formal registration procedure.

The main forms of IP are: > > > > >

Patents Copyright Designs Database rights Trademarks

If you would like to know more about the nature and scope of IP, you can obtain a “Researcher’s Guide to IP and Confidentiality” from UMIP or view it at: www.umip.com/researchers_guides.htm There are also three other relevant guides and a ‘workbook’ available in hard copy form and on the website. In addition, there are commercialisation case studies to complement this Guide which are also available for download. UMIP can describe the University’s IP policy to you and the position that the University takes in various circumstances. For further information about the University’s IP Policy, see the executive summary at: www.umip.com/ip_execsummary.htm

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Sometimes questions are more important than answers. Nancy Willard

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What is IP Commercialisation?

Innovation is the specific instrument of entrepreneurship... the act that endows resources with a new capacity to create wealth. Peter Drucker

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IP commercialisation refers to the transfer of IP in return for payment, whether in cash and/or in kind. In the same way as a house can be bought and sold, IP can also be sold or transferred to another owner. This is called an ‘assignment’. If the IP has been developed and has potential for business application, it may be appropriate to transfer the IP into a new, start-up company which is dedicated to its commercialisation. This is commonly referred to as a ‘spin-out company’. IP can also be licensed. This is similar to the lease of a flat. The IP owner (the “Licensor”) permits someone else (the “Licensee”) to use the IP usually in return for payment. If the IP has been used to make a particular product, payment will often be made in the form of a series of regular payments, generally linked to sales, known as “royalties”. In addition, IP can also be subject to an outright sale.

What are the advantages of each route? If the IP is in a new field and has many potential applications, it could have enormous financial potential. As a shareholder in a spin-out company it would be possible for you to see significant capital gains from the sale of your shares.

If the IP is a development or improvement of an existing product or process, then it is more appropriate to license the IP to an existing company who will spend the time and resources to implement or commercialise the IP. As the IP originator you would receive a share of the royalties. In general the returns from involvement in a successful spin-out are greater than royalties from a licence although spin-out returns tend to take longer to realise and require a much greater personal commitment. Also, the risk of a spin-out not being successful is higher. Both routes can bring other “benefits” such as case study teaching material and development contracts. Occasionally secondment to the spin-out is possible and when sufficient investment money has been raised, there is also the possibility that you will receive fees as an adviser to the spin-out board. The University’s IP Policy explains in more detail how the royalty payments or shareholdings are allocated and can be accessed on the University’s intranet. Commercialisation case studies can be found on UMIP’s website at: www.umip.com/researchers_guides.htm

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Why commercialise?

It is widely recognised that innovation and entrepreneurship need to be stimulated in order to maintain and promote economic growth. The University therefore actively seeks to protect its IP and to commercialise the results of research where appropriate. The University also has an obligation to consider protecting IP where the research is funded by a Research Council or charitable institution. Much industrially sponsored contract research is funded specifically to generate valuable IP. Revenue earned through commercialising our IP is likely to benefit your School and the University in addition to yourself. The rewards both reputational and financial can be attractive, but the process requires careful management, often over a long period. Although it is impossible to guarantee that your idea can be protected or will be commercialised, we have a proven track record of success. Building on over 20 years of technology transfer activity we have helped: > Raise ÂŁ100Ms for spin-out companies > Create hundreds of jobs > Conclude over 45 annual licences with UK and international companies > Sell shares and collect royalties regularly You can find examples on the UMIP website. 16

The Commercialisation Process UMIP brings to you a blend of entrepreneurial expertise, in-depth knowledge of University IP, project management skills and, critically, an understanding of the needs of and demands upon University IP originators. UMIP will work with you to design a business model for the IP and generate the development, operational and marketing plans for its commercialisation route. Using our in-house teams as well as our extensive networks of external professional service providers, venture capital sources, dynamic commercial managers and marketing agents and business contacts we tailor-make an approach that is appropriate and successful for your licence or spin-out projects. This way we can marshall large and relevant resources to help you increase the likelihood of success and the speed with which it can be achieved. UMIP employs a rigorous innovation selection process which assesses your idea for commercial potential and the type and potential strength of its IP protection. Stage-gate management within this process will indicate whether the IP is best licensed or whether a spin-out company would be the most appropriate vehicle for commercialisation. This ensures effective use of time and resources too. Sometimes the IP can be sold outright as a once-only sale.


You must do the thing you think you cannot do. Eleanor Roosevelt

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UMIP’s Commercialisation Process

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PRE-DISCLOSURE

Early contact with UMIP is necessary to discuss your invention/IP and to provide guidance with respect to disclosure, commercial assessment and protection processes.

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INVENTION DISCLOSURE

This is the written notice of IP to UMIP that begins the formal IP commercialisation process. An IP disclosure remains a confidential document and should fully describe and record your IP so that the options for commercialisation can be evaluated and pursued.

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ASSESSMENT

The period in which UMIP reviews (with your input) the IP disclosure, requests patent searches (and other IP searches if applicable) and analyses the market and competitive technologies to determine the IP’s commercial potential. Based on the information gathered, a decision on whether to continue the commercialisation process will be made. Decisions against continuing may be due to issues such as unpatentability of the idea/observation or limited commercial potential. If the IP shows potential, the evaluation process will guide our strategy on whether to focus on licensing to an existing company or creating a new business start-up.

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PROTECTION

The process for which protection for IP is pursued to encourage third party interest in commercialisation. If patentable protection begins with the filing of a patent application with the Patent Office and, when appropriate, foreign patent offices. Once a patent application has been filed, it will require several years and tens of thousands of pounds to obtain issued UK and foreign patents. Other protection options include copyright, designs, database rights and trademarks.

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PROOF-OF-PRINCIPLE

UMIP’s Proof-of-Principle (PoP) programme can provide the funds needed to take a novel idea to a demonstrable stage - validating its commercial potential - in order to attract potential investors or licensees. UMIP assists with arranging such funding. The amount of money required for PoP varies and is typically invested over a twelve month period.

FIND A LICENSEE

FORM A SPIN-OUT

If the IP will best be commercialised by one or more existing companies, UMIP will seek potential licensees and work to identify mutual interests, goals and plans to commercialise the IP fully.

If creation of a new business has been chosen as the optimal commercialisation vehicle, UMIP will work to assist the founders in planning, creating and seeking funding for the spin-out and project manage the early stages.

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CONTRACTUAL

UMIP manages documents such as licence agreements/shareholder agreements etc

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REVENUE

Revenues received by UMIP from licensees such as up-front payments and royalties are distributed to IP creators and to the University/IP creators' faculties. Shareholdings and the sale of shares from spin-out companies can benefit the IP creator and the University.

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What do you do if you have an idea?

If you have an idea or observation and are wondering if it has potential value contact one of our Commercialisation Executives. Look at our website for a list of key contacts or refer to the leaflet at the inside of the back cover of this Guide.

What happens next? You will be invited to meet with one of our Commercialisation Executives, specific to your faculty, to discuss your idea/observation. We will then complete an Invention Disclosure based on the information you give. The Invention Disclosure is very important. It helps UMIP's Commercialisation Executives to define and understand the results of your research and, in the first instance, identify if there is any IP to protect. It provides us with the preliminary information needed to begin the process of protecting it. The Invention Disclosure and other documents in the UMIP process are designed to complement the laboratory notebook, which may be the primary source of much of the information required and should be carefully preserved and made available, on request, to the University or its agents. It will also be proof of inventorship/creation and aid registration.

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To avoid risking the protection of certain of your IP rights and possibly hindering the opportunity to market your IP, contact UMIP before holding any discussions with people outside of the University or indeed anyone who is not an employee of the University such as students, Visiting Fellows or Honorary Lecturers. If a patent or design right application has not yet been filed and your idea/observation has been publicly disclosed (e.g. published papers, poster sessions, conference, web disclosure or other communication), potential protection of any IP may be jeopardised. Please contact UMIP in sufficient time to allow us to consider the filing of a patent or design right application before publicly disclosing your idea/observation. We will provide you with a Confidentiality Agreement for the party to sign before you describe your invention or design to them. We would even recommend it for other automatically protected IP, such as source code. UMIP has a strong working relationship with the University’s Research Office and with the Contract Services Team to ensure that IP and confidentiality issues are managed closely and in a consistent way.


Research is the process of going up alleys to see if they are blind. Marston Bates

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Practical Support

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Proof-of-Principle (PoP) Programme One of the major early hurdles to overcome in IP commercialisation is to find the early stage funding needed to take a novel idea to a demonstrable stage and thereby validating the commercial potential of that idea in order to attract potential investors or licensees. To overcome this first hurdle the University has set up a ‘Proof-of-Principle’ scheme for projects with good potential. The amount of money awarded is usually around £100k but on occasion up to £150k, often to be spent over a twelve month period to move the project on to the next stage - for example, to finance a prototype, more in-depth market studies and/or the

generation of additional data for a patent application. UMIP is also very experienced in securing PoP funding from a variety of non-University sources. Ideas are initially screened by members of UMIP’s Faculty teams and then by a panel, including members of UMIP’s Investment Committee. Applications are assessed every three months using criteria such as: IP situation, applications of the idea, market analysis, benefits and risk analysis. A rapid and considered response is given and successful applications can commence immediately.

If you do things well, do them better. Be daring, be first, be different, be just. Anita Roddick

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Practical Support

Development Funding Through UMIP, sources of further funding exist to give follow-on support to exceptional projects with outstanding commercial potential which have successfully completed ‘Proof-of-Principle’ (PoP). These project finance grants and “late seed” investments are usually in the £100k to £750k range and are used to maintain momentum in a licence project or spin-out or to “gear-in” funding beyond the PoP phase. Funding requirements for spin-outs tend to be much higher than for licence projects.

The UMIP Premier Fund (UPF) primarily makes late-seed stage investments, in a total of 15-20 companies, initially in the £250k-£750k range, with both the intention and capacity to provide follow-on investment up to £3m. It is an independent fund, managed by MTI Partners and has an office on campus. Its website is www.theupf.com

UMIP has a regular dialogue about its deal flow with VCs, business angels and government agencies in its network so as to facilitate effective technology transfer. In particular, it has access to the UMIP Premier Fund.

I can see a time when every city will have one. An American mayor’s reaction to the news of the invention of the telephone

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Key components for success

Successful spin-outs and high value licence projects are not specific to any particular field of research. Researchers who have become successful through licence deals or spin out companies are just as likely to be engineers, chemists, physicists, biologists, psychologists, geographers, management scientists or researchers in the creative arts. The IP commercialisation path is a long one to travel down before reaching the destination and can be arduous but UMIP is willing to go down the path with you and introduce you to people (and resources) who can make the journey more rewarding. The journey itself can be tremendously valuable in itself and enjoyable for you and ultimately reputation enhancing and financially beneficial. Recent examples of the successes from the University are on our website.

More help There are various help notes, tips and other information notes on the UMIP website for you as well as a series of guides, an IP workbook, our IP Policy Guide and online resource.

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We must not forget that when radium was discovered no one knew that it would prove useful in hospitals. The work was one of pure science Marie Curie

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The Innovation Centre (UMIC)

State-of-the-art incubator premises and a vibrant enterprise conferencing and networking centre

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Our partner division in UMI3

The University of Manchester has a global reputation for being at the forefront of innovative and enterprising research. UMIP and the Innovation Centre’s recent configuration as partner divisions within The University of Manchester I3 Ltd (UMI3) will deliver many operational benefits in the successful transfer of University IP to the market place efficiently at scale. The Innovation Centre provides high quality state-of- the-art incubator premises for biotech and hi-tech companies through a mixed portfolio of high specification laboratories and office space suitable for a variety of purposes. Many of UMIP’s spin-out companies reside in the Innovation Centre and are part of a vibrant supportive environment and benefit from being part of our ‘Entrepreneurial Hub’. A major feature of the Hub is an Entrepreneurship Forum, the main aim of which is to unite the external community, whose interests lie in entrepreneurship and innovation, with the University’s academic/research community through a series of workshops, seminars and events. Forum activities are held at UMIC’s bespoke conferencing and event facilities and include: > Events bringing industry professionals together with academics to explore opportunities for the co-development of projects and showcasing of expertise. > Specialist events for academics interested in developing new ventures from research focusing on Intellectual Property issues

including advice on patenting and trade-marking, creating and running spin-outs, social enterprises and licensing of technologies. > Attracting in competitions, workshops and events linked with enterprise and innovation such as initiatives for SMEs and local Business Angel and Investor programmes for companies looking to fundraise or pitch to investors. > A newly formatted series of the Manchester Masterclass events on topical subjects such as accessing cloud based computing, designing effective products, social media and marketing. > Events with innovation support providers, both themed and general, that help to provide support for stimulating new and growing businesses – seed camps on key subject areas, interactive sessions on stimulating start-ups and high growth business events. > Drop-in or surgery system, where support providers and associates are given space to conduct one- to-ones. UMIC have a range of private and public sector associates providing pro bono work. > Profile raising, fact-finding and VIP tours – promoting activities to raise government, stakeholder, funders’ and foreign dignitaries’ awareness of UMIC facilities and its tenant community. A comprehensive rolling events calendar can be found on the UMIC website at www.umic.co.uk/events 29


Intellectual Property Awareness Resource

Provides valuable information on: > Understanding IP > IP Commercialisation > IP in Research or Consultancy > IP and Academic Materials

www.manchester.ac.uk/ipresource 30


UMIP

Spin outs

Shares

Prototyping

Business planning Seedcorn investing

Licensing

Innovating

Up-front payments

Royalties

Sale of IP

Assignments IP protection Patents Copyright Trade Marks

Investor-in-People

Excellent track record

Experienced staff

Well networked

Effective and confidential service

Licensing

Seed capital contacts

Proof of Principle funds

Patents

Know-how

Copyright

Trademarks

IP agreements

Company flotations

Trade sales


Printed on recycled paper

Issue 3/01 November 11

UMIP is a division of The University of Manchester I3 Limited (UMI3) www.umi3.co.uk

Core Technology Facility 46 Grafton Street Manchester M13 9NT T: 0161 603 7751 info@umip.com www.umip.com

@UMIPnews


A Guide to UMIP