SparkIP: Creating an Online Community and Exchange for Intellectual Property

Startup company SparkIP, which was recently accepted into Georgia Tech’s Advanced Technology Development Center (ATDC), wants to be the “eBay of intellectual property” and the “myspace of science” for universities and government labs. The goal is to efficiently connect buyers and sellers of intellectual property via a single Web destination.

According to CEO Ed Trimble, global licensing of intellectual property (IP) is a $100 billion per year market, and continues to grow. From 1997 to 2005, annual investment in research and development in the United States increased from $239 billion to $289 billion, and annual filings at the United States Patent and Trademark Office increased by 80 percent. As a result, a cottage industry has emerged of IP strategy firms and acquirers/developers.

“In the United States we have outsourced our manufacturing and more and more of our services jobs. We have to ask ourselves what we have that keeps America competitive, and it’s innovation. All countries want to become knowledge-driven,” Trimble observed. “That being said, the market for innovation and intellectual property is incredibly inefficient, built on disorganized processes, systems and personal relationships.”

Through patented research tools and a first-of-its-kind data repository, SparkIP is offering a one-stop shop for inventors, attorneys, licensors and licensees to realize dramatic gains in the creation and commercialization of new technologies. This science community will include advanced research tools, automation of IP development and patent protection processes, invention and research requests, community tools to enhance communication and collaboration, standardization of licensing terms and contracts, funds transfer and premium data services.

“Our engineering team is diligently working on two parts of our offering. On one side, we have SparkstreamSM, a Web-based tool that helps universities capture invention disclosure forms (IDFs), identify bundling opportunities, communicate and collaborate with other researchers and tech transfer offices, market inventions on the SparkIP exchange and manage and report on their invention pipeline,” Trimble explained. “Our other offering is the SparkIP public marketplace, or Exchange. Here, technology buyers can research innovation, file invention and research requests, bid on exclusive first-view of new technologies and contact the licensor to initiate licensing discussions.”

SparkIP’s offerings are different from others on the market, said Trimble. The patent-pending database and research tools provide an innovation landscape that users can visually navigate to discover new technologies, bundling opportunities among existing technologies and industry research needs. Trimble also pointed out that the first-view rights gives buyers a competitive advantage in the market and the client interface allows users to access information and transactions efficiently.

Early on, SparkIP will target universities for its products. According to Trimble, the three main constituents – faculty inventors, technology transfer offices and buyers – are all frustrated by ineffective marketing, fixed budgets, trouble assessing viability of ideas and difficulty finding desired IP within the university environment. In essence, SparkIP’s products will allow the marketplace to determine the value of IP generated by universities.

Another reason SparkIP will focus on universities is the opportunity for improvement in the commercialization and licensing process. Today, annual license revenue for American universities is about three percent of annual government and corporate research and development investment in those universities. In comparison, corporations like Texas Instruments, IBM and DuPont generate out-licensing revenue between eight and 14 percent of research and development investment – a number which represents the leftover, non-strategic innovation and ignores the more than 500 percent return in the form of core product revenue resulting from research and development investment.

“Maximizing revenue is not the sole mission of universities, so that number is never going to be what it is in corporations. However, everyone agrees that there is a lot of opportunity to lift these numbers,” Trimble said. “Our experience and relationships are strongest within American universities, and we have the ability to create an attractive and predictable pipeline of innovation for the buying community, which includes corporations, private equity firms, technology incubators, entrepreneurs and even other research organizations.”

Initially, universities and government labs will be able to post their innovations on the Exchange free for one year to accelerate adoption and build critical mass; Sparkstream will be deeply discounted for one year. Eventually, revenue will be derived from commissions on upfront license fees, auctions for exclusive first-view of new innovation and fees for submission of invention and research requests. The Sparkstream co-branded university Web sites will also generate revenue through license fees and patent services.

“Our objective is to have 500 or more exchange listings by our October launch, 1,000 listings by the end of the year and 2,900 by the end of 2008,” Trimble said. “If we hit these numbers – and we think we can – this will be a very valuable business by 2012.”

Trimble also stressed that ATDC would be the perfect place from which to launch SparkIP.

“We’re excited about the midtown location, the facilities, the support services and the proximity to one of the top research institutions in the country. But we’re most excited about joining such a great community of people,” he said. “Everyone I’ve known here is so vibrant and energetic, and we look forward to enjoying that energy as well as contributing to it.”

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Writer: Nancy Fullbright