Invention, tech transfer and commercialization
Definitions and Terms

Here are some commonly used commercialization and entrepreneurship terms and definitions. Investopedia (a former start-up founded in Edmonton) has an online free expanded dictionary of commonly used business terms.

Angel Investors: Angel investors are an important source of funding for new companies. They are usually wealthy individuals with previous business experience who choose to invest in start-up businesses. They may also provide mentorship or operate as a consultant to the venture. Angel investors often will invest based on personal criteria and often prefer if other avenues of capital are exhausted first. Angel investors may or may not be part of organized investing groups. Super Angels are a class of angel investors that operate like a small venture capital fund, pooling large sums of money and investing quickly in exchange for relatively small equity stakes.

Assignment: Refers to how ownership rights are allocated. Generally, parties that have been “assigned” rights have certain privileges or responsibiliites dictated by an agreement.

Commercialization: In the context of the university, this refers to the process of transferring research or academic innovation into real-world impact.

Copyright: The exclusive right to reproduce a work. It does not protect an idea, but how the idea is expressed. For example researchers and students usually hold the copyright for their publications. However, if conducting research as a university employee (e.g., research associate, research assistant, or lab technician) copyright usually goes to the university. In Canada, copyright is protected for the life of the author plus fifty years.
Equity: Equity is a representation of a company’s value, and is associated with ownership of part of a company, through shares. Owners of shares, called shareholders, have an accumulated degree of ownership in a company through the combined value of the shares they hold. Equity ownership allows individuals to participate in decision making for the company, with influence proportional to their degree of ownership in the said company. Owning equity also gives shareholders a claim to some value of the company. Early-stage companies often make deals with investors to exchange some equity for funding in order to finance their growth and expansion, in a process called equity financing or dilutable funding.
Founder: Person who establishes a venture.
Intellectual Property: The creation or product of the mind or intellectual activity and includes such things as inventions, software, trademarks, design, and literary and artistic works. Such IP can be protected by law in the form of patents, copyright, and/or trademarks.
Inventors: Individuals who create inventions. As a student, you may be looking to publish something related to your invention, but not all authors who are listed as contributors to academic publications may be inventors. The university’s Report of Invention (ROI) form can help you sort out who the inventors are.
Non-Dilutable Funding: Financing that does not require an exchange of equity, for example a government grant that is awarded in exchange for development of a particular technology.
License: This extends IP rights to another party, giving them the ability to also make, use, or sell the IP.
Patent: A form of legal protection for intellectual property. Patents in Canada protect products, processes or machines, or an improvement to existing IP. To qualify for protection, the invention must be new, useful and non-obvious. Filing patents is a long term process that requires filing legal claims, assessments by patent agents, and financial commitments. Patents are also country-specific (i.e separate for USA, Canada, Japan, etc).
Patentable Invention: Something that is new, useful, and not obvious for somebody with a similar skill set to develop. Inventions include many things, from new devices to new chemical compounds, new uses or processes, and even new life forms.
Revenue: Financial earnings from business activities for a given period. Gross revenue refers to earnings before expenses and other deductions, whereas net revenue refers to earnings after expenses and deductions. For a company or licensor, gross revenue consists of all the money from sales and licensing fees. Companies may have more than one product or service that generates revenue.
Royalties: Are calculated from a licensed technology’s gross revenue, not the company’s total revenue. Net revenue, when referred to in the Patent Policy, is money collected by the university or inventors from the company/licensee. In other words, it is the royalty the company/licensee pays to the university, minus the cost of IP protection and licensing (e.g., patent filing or out-of-pocket costs of granting or enforcing a licence).
R&D: Refers to research and development and often is associated with product improvement or innovation to advance the overall efficiency or competitiveness of a business. R&D activities may include research, prototyping, experimentation, product testing, or process improvement.

Startup: A new business venture in the earliest stages of development. Often they are focused on a technological or business model innovation.

Spinoff: A startup company that develops from the use of university resources by students or a member of the university staff. A University of Alberta spinoff is defined by the following criteria: 

  • derives a considerable portion of its commercial activities from the application or use of a technology originating from research activities conducted at UAlberta;
  • is not controlled by UAlberta, but in which the university may have a non-controlling equity stake and/or a royalty stake; and
  • which has signed, in addition to all appropriate commercial documentation, a relationship agreement with UAlberta to address conflict of interest arising from the involvement of UAlberta personnel in the new spin-off.

Venture Capital: A type of private financing where a fund or organization invests large sums of money for a portion of equity in early-stage companies with high growth potential. Venture capital organizations are often specialized to particular industries or technologies. Venture capital is generally a late-stage form of funding.