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University Patents, Inc.
Strategy and Implementation Summary
University Patents has identified four-year universities with research budgets under $100 million and smaller office of technology staffs as the primary target market. They are located throughout the geographic U.S. and these universities are the major source of research and patents awarded to higher-learning institutions in the U.S. There are approximately 940 institutions in this classification. University Patents will position itself not as a competitor to these universities’ offices of technology, but rather as a service provider and partner. As their partner, University Patents will use its network of business contacts to search out various uses of the new technology and customers in these fields willing to become licensees. Once a potential licensee is found, University Patents will take a mediator position and using our license calculation methods, provide a base starting range for negotiations.
5.1 Competitive Edge
University Patents’ initial competitive advantage will be its reduced cost structure. University Patents will be able to service multiple colleges and universities at a cost comparable to what each school would have to pay to effectively provide these services to only themselves. By spreading operating expenses over multiple clients, University Patents will create a competitive advantage over university technology offices.
Once University Patents has established itself, an additional competitive advantage will be its reputation for service to both the research institutions and commercial businesses. Universities will be able to contact University Patents and know that within weeks they will have a list of prospective licensees and contacts at each business. Businesses will be able to contact University Patents and know that our database will contain information about our client universities’ research projects available for licensing. University Patents will be the company to call by parties on both sides of the transaction. This is extremely important because these will be the only barriers to entry into the market.
University Patents will not bring the actual license writing in-house, as that would both entail further hiring of legal resources, which is not a core competency of this company, and possibly require University Patents to litigate in cases of patent infringement and/or license enforcement. University Patents will remain a patent broker.
5.2 Marketing Strategy
University Patents will initially target colleges and universities that have a current supply of marketable patents but a small office of technology (~five staff members of less). During the first year, University Patents would like to have at least four institutions from which to license patents. The benefits that University Patents will focus on providing these institutions are: income from previously dormant patents, status and recognition for their research, and a cost effective way to transfer new technologies to the marketplace.
Initial contact to universities will be made through references from the University of Notre Dame Office of Research or other similar departments. This will provide the credibility that University Patents will need in the start-up phase of business. Contacts with commercial business will be made through any means necessary, as University Patents will begin compiling a database of contacts within multiple industries. It is at this point where we believe the technology and the developer will help with the eventual sale of the license. Assuming University Patents has a desirable technology to sell, the licensing income will soon follow.
Once University Patents has established itself as a legitimate player in the marketplace, University Patents expects to fund a full-time staff. University Patents will expand the number of universities that it will target and will be able to promote the network it has recently established. To these new customers, University Patents will provide value on two different levels. First, the network of private industry contacts will decrease the time-to-license and the number of licenses possible. Secondly, by using University Patents as an outsourcing resource, the universities can avoid the costs of a full-time staff.
The future vision for University Patents includes regional offices, each with their own expertise, such as pharmaceutical/chemistry, electronics, computer sciences, and etc. This allows each office to provide a local point of contact to University Patents but also to avoid the duplication of services that would arise if it tried to service all industries in each office.
5.3 Sales Strategy
University Patents will use the detailed information provided by the technology analysis to create a list of possible licensees. Using any personal contacts in the industry, we will make initial contact to set up a more formal meeting. Even for those contacts that do not become licensees, we will use the contact time for both contact mining for further possible license outlets and attempt to set up an informal relationship for future information gathering opportunities and licensee searches.
5.3.1 Sales Forecast
University Patents is planning on an initial sales of four licenses written during Year 1. During Year 2, eight new licenses will be written and in Year 3, 16 new licenses. Years 4 and 5 expect growth of 13 and 11 additional new licenses per year respectively. This is possible as management begins concentrating on this business in a full-time respect.
- Income per license = $12,750
- First year sales = 4 licenses
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Direct Cost of Sales||Year 1||Year 2||Year 3||Year 4||Year 5|
|Travel Cost Per License||$8,400||$16,800||$25,200||$37,800||$50,400|
|Subtotal Direct Cost of Sales||$16,400||$32,800||$49,200||$73,800||$98,400|
- Four patents written in first year.
- Twelve active patents by end of Year 2 (this will provide University Patents with a positive cash flow for the fiscal year).
- Twenty nine active patents by end of Year 4 (provides enough future to sustain full-time employment for founders).