Academic Technology Transfer Operations and Practice Knowledge Economy Forum IV Istanbul, Turkey March 22-25, 2005 Alistair Brett Oxford Innovation

Academic Technology Transfer Academic Technology transfer is the process of moving academic research results from the university laboratory to the commercial marketplace for public benefit. Key Terms of the Definition: Research Commercial Public Benefit

The U.S. Situation Intellectual Property Protection was established in the U.S. Constitution (1789) Article I, Section 8 “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive rights to their respective writings and discoveries” The first U.S. patent was issued in 1790

But Academic Technology Transfer Began Only in 1980 Before 1980, title to Government-funded research results at universities belonged to the Gov’t The Government did little with the inventions …less than 5% were made commercial or applied to benefit the public In 1980, the U.S Congress amended the U.S. Patent Law - title to inventions made with Government funding belonged to the university that created the invention (“Bayh-Dole Act”) The Act also encouraged university - industry collaboration in research and tech transfer Public Law Patent & Trademark Act of 1980

The Bayh-Dole Act Confirmed… Existing policy was ineffective; the potential of U.S. innovation was lost Creativity is a national resource that can contribute to the nation’s economic growth The patent system protects and permits delivery of innovation to the public Stewardship of innovation is best managed by those who create it Howard Bremer, University Technology TransferEvolution and Revolution, CO, 1999.Howard Bremer, University Technology TransferEvolution and Revolution, CO, 1999.

Discovery 15,510 innovations 1 per $2.1 million Intellectual Assets 7,911 new patent applications 1 per $4.9 million Transfer for Commercialization 4,516 licenses and options 1 per $8.5 million 374 new company starts 2003 AUTM Survey Research $38.5 Billion

Unprecedented Results! Nearly 300 U.S. universities have active technology transfer programs today Academic research is now critical to the nation’s R&D capacity A strong incentive for industry-university research collaborations in U.S. now exists Birth of the biotech industry in the 1980s Thousands of new companies, products and jobs based upon university innovations

Research and Innovation Research is the source of innovation Quantity of research is essential to generate innovations Quality of research is essential to generate innovations In the U.S., 70-80% of successful technology transfer is in the life sciences. Why?

Other Key Factors in Innovation Management Ownership –Does the university own the innovation? “Protectable” –Can the innovation be protected by patent, copyright, trademark? Technology & status of development –An idea versus a product; what is the product? Commercial potential –Will anyone buy the product anyway? The inventor is critical to successful transfer

Conflicting Values - Common Interest UNIVERSITYINDUSTRY Commercialization of of New Technologies Teaching Research Service Profits Knowledge for Knowledge’s Sake Academic Freedom Open Discourse Management of Knowledge for Profit Confidentiality Limited Public Disclosure R&D Louis P. Berneman, 1999

Technology Transfer Offices (TTOs) In the U.S., research universities establish Technology Transfer Offices: –To assist faculty and researchers –To evaluate inventions –To determine whether or not to protect intellectual property rights, and to manage patenting process –To market innovations to industry partners –To negotiate legal contracts with these industry partners to transfer rights in exchange for royalties or other consideration –To assist in creation of spin-off companies

Establishing an TTO Key Questions Does the university’s research volume and quality justify the expense of a TTO? Is funding available to support operations and to file patents? Are skilled individuals available to manage and operate the TTO? Who will license innovations created in your universities? Or SMEs available locally? Can you reach out to foreign companies?

Establishing a TTO Key Questions Transparent policies for faculty, staff and companies? A supportive university administration? Funding to support staffing? Funding to pay for patents to protect technology? Incentives for faculty members to participate in the process? Companies willing and ready to partner with the university (locally, nationally, internationally?). This is perhaps the most important factor!!

TTO Organizational Structures A TTO as an office within the university An external TTO owned by the university, which can be “not for profit” or “for profit” Combination of an internal and external office A company contracting with the university to manage its innovations and tech transfer One TTO serving a “consortium” or collection of universities in a region A Government Agency serving as a TTO

Financing a TTO Direct government subsidy – Japan, China 100% university subsidy – India, U.S. TTO industry membership programs - Japan Percentage of income stream to TTO – U.S. Philanthropic support – Russian Federation Private company support – United Kingdom Combinations of the above

University Tech Transfer Characteristics Tech transfer success and life sciences are strongly correlated: –70% of licenses & 87% of royalty income University technology (stage of development ) is embryonic –75% of innovations at Proof of Concept or Lab Scale Industry risk is high (failure > 45%) Majority of licenses to small firms (>65%)

University Tech Transfer Characteristics Most licensed innovations do not achieve product sales until 5-10 years after the license agreement is signed The single greatest predictor of TTO income success is the age of the office Primary source for identifying licensees: scientist-to-scientist communication –2nd source: industry scanning of publications –3rd source: marketing efforts of TTO

Elements of Exemplary TTOs 1. Clearly stated mission 2. Transparent policies and procedures 3. Entrepreneurial staffing 4. Customer-friendly orientation 5. Supportive “culture” 6. Strong links to business 7. Access to capital Louis G. Tornatzky, National Governors Association,

Conclusions Personal Observations The true “capital” of the institution lies in the intellectual capital of the faculty Typically, university technology is not developed to meet a market need – TTOs must push technology In many countries, the wide cultural gap between industry and academia is the greatest challenge Quantity or rate of innovation flow is critical, as project success rate is low It is “not about the money” (royalties are 4% of less of research funding the best of cases), it is about the benefit to society

Five Good Reasons for Technology Transfer! To reward, retain, and recruit the very best researchers, and to prevent “brain drain” To create closer relationships to industry To promote economic growth & create jobs To commercialize research for public good In the process, generate incremental resources for additional research