Basic Considerations for Commercialization

In general, technology commercialization and technology transfer describe the process of formally transforming your research into practical applications with commercial potential, seeking patent or copyright protection for these innovations, and then transferring them to industry via license agreements and sometimes new start-up companies. The process of commercialization enables researchers to get their innovations and discoveries to market and in the hands of those who can benefit most.

While some aspects of the commercialization process are highly focused on the technology or innovation, such as validating the technology, reducing it to practice and protecting it through patents and copyrights, there are equally important factors to consider from the market’s point of view.

The process of commercialization for Pitt researchers starts with the submission of an invention disclosure that initiates the review of the innovation by the Innovation Institute’s team of Licensing Managers. While the Licensing Managers work to understand the path to protect the innovation, they also work closely with the commercialization team to understand the market opportunity. In doing so, there are several factors to consider such as the potential customer, the value of the innovation from a market perspective and the potential path to commercialization – a traditional license from an existing company or through the creation of a new company.

Below is further explanation of some of these key considerations:

  • Customer Segments

This is the process of evaluating the different groups of companies or individuals that will find value from the innovation. The groups are assembled by understanding how their needs differ, what distribution channels are employed to reach them, their profitability, etc.

  • Value Proposition

A succinct, targeted statement summarizing the commercial value of your innovation and convincing potential industry partners to license your innovation. We call that statement, which will become your key marketing tool, the value proposition.

You will use the value proposition to position the business opportunity for your innovation—whether online, in scientific journals, at conferences and technology showcases, at industry partnering meetings, or through other interactive venues. Participating in the Innovation Institute’s commercialization programs will help you to develop your value proposition as well as cultivate marketing opportunities.

  • Product-Market Fit

You may have an innovation or product, but you need to learn whether a market exists for it. You need to determine if there are a significant number of people or organizations that have a problem your innovation solves and do they perceive that your product is superior to the alternatives.

  • License vs. Startup

Past experience has demonstrated that innovations that aren’t patent-protected and licensed to industry and instead are released into the public domain often don’t find their way into everyday use. Few commercial entities in the United States will invest the large sums of money necessary to bring most ideas to market without the guaranteed exclusivity provided for a set period by patent protection.

In addition, the University holds to the belief that future economic success in the United States depends in no small part on the commercial development of university-based technologies that emerge from research funded by federal grants. The federal government invests substantial resources in basic research conducted by research institutions like the University of Pittsburgh. Granting agencies today expect their research investments to someday result not only in new knowledge, but also in new innovations that can enhance the global competitiveness of the U.S. economy.

The federal government supported that goal with the enactment of the Bayh-Dole Act of 1980, effectively giving universities title to federally funded university technologies and requiring universities to file patents on all elected technologies. At the same time, the Innovation Institute works to foster new relationships with industry—long-lasting partnerships in sponsored research, new innovation development, technology outlicensing, and the formation of start-up companies.

The Importance of Commercialization

Past experience has demonstrated that innovations that aren’t patent-protected and licensed to industry and instead are released into the public domain often don’t find their way into everyday use. Few commercial entities in the United States will invest the large sums of money necessary to bring most ideas to market without the guaranteed exclusivity provided for a set period by patent protection.

In addition, the University holds to the belief that future economic success in the United States depends in no small part on the commercial development of university-based technologies that emerge from research funded by federal grants. The federal government invests substantial resources in basic research conducted by research institutions like the University of Pittsburgh. Granting agencies today expect their research investments to someday result not only in new knowledge, but also in new innovations that can enhance the global competitiveness of the U.S. economy.

The federal government supported that goal with the enactment of the Bayh-Dole Act of 1980, effectively giving universities title to federally funded university technologies and requiring universities to file patents on all elected technologies. At the same time, the Innovation Institute works to foster new relationships with industry—long-lasting partnerships in sponsored research, new innovation development, technology outlicensing, and the formation of start-up companies.

Paths to Market

The most common and effective ways to see your research commercialized and achieve societal benefit are through a traditional license (this is typically an existing company licensing the right to develop, market and sell innovations that have originated within the University) or through the creation of a new company, commonly referred to as startup formation. In the latter scenario, the pursuit of creating a startup may be led by the researchers (faculty or graduate students), or the technology may be licensed by an entrepreneur. In some cases, these are entrepreneurs-in-residence who are contracted by the Innovation Institute to work with Pitt research teams to help them with their commercialization strategy. In either case, the lead researchers are highly involved in this decision making and play a key role in the commercialization strategy. It’s important to note that even in the case of the creation of a startup by a researcher or entrepreneur, the technology is still licensed to company. In these cases the new company is created and then the technology is licensed to the company.

Check out this infographic to better understand the paths to market.