Page 36 - Innovator Handbook

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Commercialization
What activities occur during commercialization?
Most licensees continue to develop an innovation to enhance its functionality, reduce risk, prove reliability and satisfy the market requirements for adoption by customers. This can involve additional testing, prototyping for manufacturability, durability and integrity, and further development to improve performance and other characteristics. Documentation for training, installation and marketing is often
created during this phase. Benchmarking tests are often required to demonstrate the advantages of the innovation and to position it in the market.
What is my role during commercialization?
Your role can vary depending on your interest and involvement, the interest of the licensee in utilizing your services for various assignments, and any sponsored research related to the license or any other agreements.
What revenues are generated for FAU if commercialization is successful?
Most licenses have licensing fees that can be very modest (for startups or situations in which the value of the license is deemed to warrant
a modest license fee) or can reach hundreds of thousands of dollars. Royalties on the eventual sales of the licensed products or services can generate similar or greater revenues, although this can take years to occur. Equity, if included in a license, can yield similar returns, but only if a successful equity liquidation event (public equity offering or
a sale of the company) occurs. Most licenses do not yield substantial revenues. A recent study of licenses at U.S. universities demonstrated that only 1% of all licenses yield over $1 million. However, the rewards of an innovation reaching the market are often more significant than the financial considerations alone.
What will happen to my innovation if a licensee’s commercialization efforts are unsuccessful?
Licenses typically include performance milestones that, if unmet, can result in termination of the license. This allows for subsequent licensing to another company. However, time delays and other considerations can sometimes hinder this re-licensing.