Getting More Women Involved in Tech Transfer (and tracking it better)

The Society of Women Engineers has published a review of a recent AUTM (Association of University Technology Managers) study’s findings titled, “’Engaging More Women in Academic Innovation: Findings and Recommendations,’” [which was] published in the National Academy of Inventors Technology and Innovation Journal.”  The review includes a list of the key findings of the study as well as a list of recommendations.  The review notes that the lack of mentorship is problematic.  The review also references a YouTube video created by the National Women’s Business Council concerning the study.  The video is worth taking a look at (about 4 minutes long) and is available, here.  The review is available, here.  Hat tip to Technology Transfer Tactics.  

New Study Finds Tremendous Economic Impact of US Department of Defense Licensing Program

TechLink--University of Montana, Bozeman; and Business Research Division, Leeds School of Business, University of Colorado have released an impressive report, National Economic Impacts of DoD Licensing Agreements with U.S. Industry (Report), concerning U.S. Department of Defense (DoD) licensing.  TechLink serves as a tech transfer partnership arm of the DoD.  The Report is particularly impressive because of the response rate of surveyed DoD licensees—apparently 95% out of 915 companies with over a 1,000 agreements, and covers the years 2000 to 2017.  Some of the important findings from the Report, include: 

•             $27 billion in total sales of new products and services resulting from the DoD license agreements

•             $4.5 billion in sales of new products to the U.S. military

•             $58 billion in total economic impact nationwide

•             $6 billion in new tax revenues (federal, state, and local)

•             214,791 jobs (11,933 per year) with average compensation of $74,762

Interestingly, about 43% of the over 1,000 agreements resulted in sales in new products and services.  Fifty-three percent had no sales.  The difference in statistics is because some where designated “unknown” and 1% generated sales only outside the United States.  One license agreement resulted in $16.1 billion in sales (Wow).  That agreement concerned an antibody: 

The antibody is used in a top-selling drug, Synagis, to prevent serious lower respiratory tract disease in infants and young children. Without this top-selling drug, commercial sales were just under $4.5 billion and total sales were just under $10.9 billion.

The remaining sales were distributed relatively widely amongst agreements: 

Twenty agreements generated more than $100 million in sales; however, 101 agreements had sales of at least $10 million. Notably, 233 license agreements, approximately 20 percent, generated sales of at least $1 million.

Sales to the U.S. Military were about 42% of the total sales when Synagis sales are excluded.  


Another fascinating statistic is that 82% of the licenses generating sales were to entities that would be characterized as small businesses by the Small Business Administration (basically less than 500 employees).  And, 47% of the 82% are companies with nine or fewer employees.  


Additional economic impact also included: 

[Companies] reported approximately $776 million in total outside investment funding (including venture capital and angel funding) directly related to the licensed DoD technologies. In addition, 25 companies were acquired primarily because of their DoD license agreements. Companies reported that they had sublicensed 64 technologies to other companies. Finally, they reported that they had created a total of 144 new companies to commercialize the licensed inventions, including 23 spin-outs of existing companies and 121 start-up companies.

[Hat Tip to Technology Transfer Central]

A pioneer in the world of university tech transfer to share his insights in a free webinar

IP Finance has been informed of an exciting free webinar that will take place next Wednesday, November 15, at 3:00 PM- 4:00 pm British Standard

Time. The topic of the program, under the auspices of OxFirst, will be "Academic Entrepreneurship & IP Management in Universities" and the speaker will be the distinguished Professor Graham Richards. Prof Richards was a founding member of Oxford University’s tech transfer office and a successful inventor, whose IP formed the foundation of a multi-million publicly traded company. He will talk about the core elements of turning science into business.

About the Speaker

Professor Graham Richards is a pioneer of British technology transfer. The university spin out that he established -- Oxford Molecular Group, was the first university spin out after the UK introduced a regulatory change that attributed the IPR generated in a university context to the university itself. Under the leadership of Professor Richards, Oxford Molecular Plc grew from a £350,000 start-up to a £450 million public company. He is also a founding member of the Technology Transfer Office of the University of Oxford and he was a director there for over 20 years. Another flagship project is the publicly traded company IP Group Plc. Originally created out of the necessity to attract further funding for the chemistry department of the University of Oxford, it is nowadays one of the most important investors in technology generated by universities. IP Group Plc is a FTSE 250 company with a market cap of £1 billion.

How to Join

Please sign up here with your professional email account. The program organizers will not accept a registration from a personal email address.

Measuring the Success of Technology Transfer Offices (and the field)

There is a glaring critique of the university technology transfer enterprise and perhaps the underlying Bayh-Dole Act in the United States.  That critique is based upon the fact that many university technology transfer offices fail to bring in enough funding through licensing or other activities to cover their own costs let alone make money for the university.  Indeed, only a handful of U.S. universities appear to make substantial amounts of revenue.  An additional criticism of the university technology transfer field generally has been that technology transfer offices (and really, the administrators above them) have been too focused on using revenue generated as a metric for success.  This focus arguably can distort the universities’ general mission directed to the public good, including skewing the incentives for academics.  For example, academics can be pushed to adopt research agendas focused on solving practical problems instead of engaging in basic science, which may ultimately have broader public benefits.  At the confluence of these two critiques is the issue of what should be the proper metric(s)for judging success for the technology transfer office and the field in general.  For sure, U.S. universities are feeling the “pinch” of less government monies for research and are looking for alternative funding sources, such as crowdfunding for academic research.  However, even with that pressure, adminstrators and faculty should judge the success of their technology transfer office based on criteria that flow from the mission of the university and that are aligned with its objectives.  So, when is it a success or not?  What are the right metrics?

Valerie Landrio McDevitt, Joelle Mendez-Hinds, David Winwood, Vinit Nijhawan,Todd Sherer, John F. Ritter, and Paul R. Sanberg, have authored a paper titled, “More than Money: The Exponential Impact of Academic Technology Transfer.”  The paper sets forth the benefits of technology transfer beyond revenue alone and perhaps provides the starting point for the development of additional metrics to judge the success of technology transfer offices.  Here are the benefits described by the authors:

Revenue generation

Unrestricted funds to institution from license income

Direct personal financial benefit to inventors and authors

Increased opportunities for funding

Eligibility for funding by compliance with federal regulations requiring a technology transfer program

Increased opportunities for interinstitutional and interdisciplinary grants

Outreach, licensing, and facilitation of new startups yield new funding partnerships

Increased opportunities for funding sources requiring a commercial partner, for example, SBIR and STTR

Facilitates establishment of international research relationships

Promotes a culture of entrepreneurship and innovation

Successes increase university brand and prestige

Enhances university fundraising efforts

Opportunities to strengthen donor ties by engagement with startups

Positively factors into high level recruitment efforts

Positively affects retention of high-producing and high-potential faculty

Student success

Provides opportunities to participate in real world translational research

Provides exposure to the process of obtaining intellectual property protection

Strengthens prospects of finding jobs and being successful

Public benefit

Fulfills the university’s larger missions to address social, medical, environmental, or technical problems

Improves the quality of life

Economic development

Revenue from university licensing positively affects the US economy

Brings money into the state or region

Aids in the retention of local talent

New university startups create high-wage jobs

It may be difficult to measure some of these “benefits.”  But, what do you think of some of these as potential metrics?  For sure, some of the most beneficial programs often bring to the table attributes that are difficult to measure.  And, surely, metrics such as revenue generation, invention disclosures, patents granted, patents applied for, patents licensed, number of start-ups and other traditional metrics still have some place in the game.  (Hat tip to Technology Transfer Tactics for a lead to the paper.) 

EU's new tech transfer regime: a new book

The revised European Competition Law Approach to Technology Transfers: Innovation friendly? is the title of a new book penned by Stéphanie De Smedt and her colleague Yves Van Couter, both from the Brussels office of Loyens & Loeff (Stéphanie's a junior IP-IT lawyer, while Yves is a partner).

This title seeks to provide readers with an overview of the main changes of the new technology transfer exemption regime (which entered into force on 1 May 2014), together with an assessment of their possible impact on the plans and potential plans of businesses contemplating engaging in technology rights transfer and/or licensing agreements within the EEA -- as well as those who, having engaged in tech transfer activities, might be wondering what they've let themselves in for.

The book can be downloaded free of charge by clicking here.

Commission Regulation 316/2014 of 21 March 2014 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of technology transfer agreements can be downloaded free of charge by clicking here -- but it's not as much fun.

National Council of Entrepreneurial Tech Transfer Free (!) Online Research Commercialization Course

The National Council of Entrepreneurial Tech Transfer (NCET2) is offering a free 10-lecture online course titled, “Research Commercialization Introductory Course.”  The course is co-sponsored by the U.S. Department of Homeland Security, National Institutes of Health, National Institute of Standards and Technology, National Academy of Inventors and the National Science Foundation. The course is “designed to help science and engineering researchers better understand how research commercialization works. Over 5000 students, faculty and researchers from across the US have taken this course since it's been offered.”  The course is further described as:

Research commercialization involves taking articles, documentation, know-how, patents, and copyrights, which are created during research activities and getting them to users and patients for real societal impacts. In some cases, commercialization involved taking patents based on the research and licensing them to a company. This usually involves also having the researchers consult to the company. In other cases, commercialization involves forming of creating a startup and applying to federally funded commercialization programs. In all cases, though, research commercialization typically involves defining the nature of the research being commercialized (e.g., in a patent or intellectual property agreement), establishing a commercial relationship with another party (e.g., employment, a sale or license), and negotiating a contract (e.g., compensation).

Areas covered in the course include intellectual property, patents, copyrights, trade secrets, trademarks, licensing agreements, employment agreements, consulting agreements, tech transfer, creating and funding companies, and federally funded Small Business Innovation Research (SBIR) programs

Each lecture is a live 90-minute online class with Q&A.

Here is the course schedule:

CLASS SCHEDULE

Lecture 1: Patents Thursday, November 14, 2013 , 1:00 to 2:30 pm ET

Lecture 2: The Importance of Commercializing Research Friday, November 15, 2013 , 1:00 to 2:30 pm ET

Lecture 3: Copyright, Trademarks and Trade Secrets Tuesday, November 19, 2013 , 1:00 to 2:30 pm ET

Lecture 4: Employment and Consulting Agreements Thursday, November 21, 2013 , 1:00 to 2:30 pm ET

Lecture 5: Tech Transfer and Licensing Agreements Tuesday, November 26, 2013 , 1:00 to 2:30 pm ET

Lecture 6: Small Business Innovation Research (SBIR) Grants Monday, December 2, 2013 , 1:00 to 2:30 pm ET

Lecture 7: Introduction to Early Stage Funding Wednesday, December 4, 2013 , 1:00 to 2:30 pm ET

Lecture 8: Introduction to Structuring and Leading the Research-Intensive Company Friday, December 6, 2013 , 1:00 to 2:30 pm ET

Lecture 9: Moving from R&D to Manufacturing Monday, December 9, 2013 , 1:00 to 2:30 pm ET

Lecture 10: View from the Trenches: Applying what you have Learned Thursday, December 12, 2013 , 1:00 to 2:30 pm ET

This looks like a great program and you can’t beat the price of “free.”  For more information about the course and to register, see here.  (Hat tip to Steven Ferguson at the National Institutes of Health).

Exxaro Linc typical of an African IP deal

Exxaro Limited, the South African resources group, has signed a Term Sheet with Australian technology company, Linc Energy, to pursue underground coal gasification (UCG) for energy solutions in Sub-Saharan Africa. However, moving from Term Sheet to fully executed agreement is not without careful attention and some detailed negotiation about the IP.

IP NB 4 UCG

According to the press release key aspects of the deal are that:

"• Exxaro will pay an agreed upfront licence fee and ongoing royalties for the synthesis gas produced for the access to Linc Energy's UCG technologies for application in Sub-Saharan Africa (the Region).
• Exxaro will be granted a non-exclusive licence to use Linc Energy's UCG intellectual property in the Region.
• Exxaro will have conditional access to Linc Energy's UCG intellectual property to jointly develop UCG commercial opportunities on their coal resources outside the Region.
• Linc Energy will hold a minimum of 15% equity in the first project and have the option to participate up to a 49% equity position in all UCG projects which Exxaro develops."

This deal is typical of those that have dominated the African deal landscape for many years - a local resource company effectively partnering with a foreign based technology company to commercialise and exploit opportunities on the continent.  In this case, the local South African entity is also a so-called “black empowerment” company evolved out of transformation initiatives and laws in South Africa post the 1994 elections designed to uplift previously disadvantaged people through economic ownership. The formation and deal making around these companies has also dominated the local landscape for at least the last decade. Some of the IP aspects of this deal that need to be considered include:

1.      Typically, a technology firm’s main interest is to further its technology whereas a resource firm’s is to mine or work with resources and not develop IP as a main function. This can lead to differences over strategy and implementation, and disagreement. This needs to be thought through.

2.      The technology that is being transferred, in this case through a non-exclusive licence, is often a mixture of know-how, copyright and patents. This means that careful analysis and documentation of the background IP (of both parties) is crucial. More often than not, the local company will believe that it does not own any IP! This misdirection may lead to a misunderstanding of the licensee's value in the transaction or that IP may in fact be exported through the deal which may need exchange control approval.

3.      The practical effect of the transfer of technology needs to be taken into account to ensure that the know-how remains proprietary, particularly in a non-exclusive environment.  This is also of interest to the licensee who is paying a royalty for information that may easily end up in the public domain if other licenses are not strongly controlled. Furthermore, access to training and adequate facilities to enable to tech transfer need to be set up.

4.      From a patent perspective, the usual period of protection (20 years) may not be a particularly long period for a mining project and that effect needs to be considered. Patent protection needs to be obtained (assuming that to be important to the Licensor) and a clear understanding of its enforcement in Sub Saharan Africa is important for both licensor and licensee. In any event, the IP strategy (eg patenting v know-how) of the Licensor needs to be formulated, protected and clear and the licensee should be assured that its position in protected  (from copyright infringement too) if an infringement occurs as that is one of the reasons why they are paying a royalty. And yes, there have been reports of counterfeit power stations.

5.      Undoubtedly, foreground IP i.e. IP developed though the collaboration process is also of primary importance. For the licensor this IP may contain valuable improvements to the existing technology which will sit in the joint venture vehicle and may need to be licensed out if the Licensor is to make use of those improvements elsewhere. If the foreground IP is developed in collaboration with external consultants then agreements need to be set up. At the very least an IP manager needs to be appointed within the local company.

6.      There are some practical problems to splitting jointly owned know-how and IP generallly if there is ever a termination of the license. Unscrambling an egg is not easy and so the termination clause requires thought.

7.   There may also be exchange control considerations for IP that is to be exported (and I say this in the widest sense possible). This (and other reasons) may require upfront valuation of the IP or consideration as to the domicilium of the joint venture company.

       As a final thought, this deal involves gasification technology to produce alternate green energy solutions that are good for the planet. It is interesting and perhaps even ironic that although in this instance the technology appears to have been developed in Australia, there are local companies using gasification for green projects where the technology was developed in Europe during World War 2 under more sinister conditions.

India Frees Up Foreign Payment of Royalties

When I began my career in tech transfer in the 1980s, one of the most challenging aspects was the restriction placed on the payment of royalties and the like. In particular, many countries, particularly in South and Central America, placed severe restrictions on the amount of royalties that could be paid to a foreign licensor. Creative solutions abounded in those days to play the system in a way that was mutually beneficial to the local licensee and its foreign licensor. Some time in the 1990s I think, these restrictions were relaxed. While I have not followed the issue closely since that time, it is my impression that these restrictions have been relaxed in that region.

Fast forward to 2009 and a December 18th post by Swaraj Paul Barooach on the iconic SpicyIP Blog. Entitled "Liberalization of Foreign Technology Agreement Policy, the blog reported on the December 17 Press Release by the Government of India Press Note No. 8 (2009 series), which effectively provides that no longer will government approval of royalty payments be required above certain defined thresholds here. In short, the prior policy

"freely allowed payments and remittances up to a lump sum fee of $2 million and payment of royalty of 5% on domestic sales and 8% on experts. In addition, where there is no technology transfer involved, royalty up to 2% for exports and 1% for domestic sales ... on use of trade marks and brand names ...".

Payments above these limits required the prior permission of the Government of India (Project Approval Board, Department of Industrial Policy and Promotion).

These limitations have now been scrapped, at least in material part. Lump sum payments and/or royalty payments for technology transfer or for the use of trade marks or brands no longer require Governmental approval, no matter, it appears, is the amount of the payment. There is one restriction, namely, the Foreign Exchange Management (Current Account Rules, 2000. What exactly are the contents of these rules is not further specified in the Press Release. As well, "[a] suitable post-reporting system for technology transfer/collaborations and use of trade mark/brand name will be notified by the Government separately."

There seem to be at least three related factors at work here. First, the amount of foreign direct investment (DFI) in India continues to increase apace (over $25 billion in 2008). At least a part of that DFI would also see to require collaboration agreements with foreign entities for the use of technology within India. As well, technology is increasingly licensed-in to India for the purpose of use and commercialization within the Indian national market. Restrictions on the amount of royalties that can be freely paid abroad would only serve to reduce the optimal use of this technology within India.

Second, there might be a connection between the new policy and the increasing liberalization of capital flows out of India. Think of Tata and its recent spate of acquisitions over the past several years. It would seem that such capital flows go hand in hand, at least conceptually, with the scrapping of approval requirements for royalty payments above a certain amount.

Third, much talk has made lately over the notion of reverse innovation, where India serves as the foundation for innovation, which is then transferred to the developed world: see here. It seems that if India is to benefit from royalty streams from abroad for the use of such fruits of reverse innovation, it behoves it to allow unfettered payments of royalties by Indian entities abroad.

All in all, the provisions as set out in the Press Release point to a liberal Indian market for tech transfer, something which could have even been dreamed in the 1980's.

Bullish about Liberal Royalty Payment Policy