Commercialization

Commercialization is the process of taking a licensed technology and converting it into a marketable product.  After technology is licensed to relevant parties, several significant activities occur to bring it through the commercialization process.  Most licensees continue to develop an invention to enhance the technology, reduce risk, prove reliability, and satisfy the market requirements for adoption by customers. This can involve additional testing, as well as prototyping for manufacturability, durability, and integrity.  Further development to improve performance and other characteristics may also be required.  Documentation for training, installation, and marketing is often created during this phase.  Benchmarking tests are also often required to demonstrate the product or service advantages and to position the product in the market.  The inventor’s role in commercialization can vary depending on their interest and involvement, the interest of the licensee in utilizing their services for various assignments, any sponsored research related to the license, or any personal agreements.

If commercialization is successful, revenues may be generated for the University of Notre Dame.  Licenses have fees that can vary significantly; startups may carry modest license fees, while other businesses could generate hundreds of thousands of dollars in royalty fees.  Royalties on the eventual sales of licensed products can generate similar revenues, although this can take years to occur.  If included in a license, equity can yield similar returns, but only if a successful equity liquidation event (such as a 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 in returns.  However, the rewards of an invention reaching the market are often more significant than financial consideration alone. 

If the startup company or licensee is unsuccessful in commercializing the IP, alternative paths exist for inventors.  Licenses typically include performance milestones that, if unmet, can result in termination.  This allows for subsequent licensing to another business.  However, time delays and other considerations can hinder this relicensing.