Evolution and Survival: Technology Transfer Offices

The Association of Land Grant and Public Universities has released a November 2017 report titled, “Technology Transfer Evolution: Driving Economic Prosperity”.  The report identifies numerous opportunities for technology transfer offices as the system matures.  Importantly, technology transfer offices should focus on general regional economic development.  In reviewing opportunities and providing examples of successful programs, the report also highlights obstacles.  In particular, the report examines, “Redefining Expectations of Technology Transfer Offices,” and identifies obstacles to a successful, revisioned technology transfer office that serves to promote local and regional economic prosperity.  The Report states:

• Many senior administrators, faculty, trustees, and alumni are primarily focused on the revenue generation potential of technology transfer operations and less on the societal benefits that can be reaped by moving intellectual property of all kinds into the marketplace, even those that may not result in immediate, high revenue returns.  

• For many institutions, economic development and engagement as a central mission component is new and has led to confusion regarding the roles and responsibilities of individuals and units involved, including technology transfer offices and related professionals. New outreach duties often require coordination across multiple campuses, schools, departments and units, which makes collaboration and reporting a challenge. Many technology transfer offices lack the adequate staff, training, or resources necessary to meet the evolving expectations placed on them in the context of economic engagement.  

• Institutions sometimes face difficulty in giving credit where credit is due, for instance, when technology transfer offices are sharing partnership development responsibilities with other units. On many campuses, technology transfer offices used to be the main externally facing office for the university in the realm of business and industry. This is often no longer the case, and the new reality requires a level of coordination that is not typical practice. Moreover, reporting lines and measures of success are not consistent across different kinds of university offices, and it becomes very difficult to execute strategic, campus-wide partnerships involving external audiences.

I’ve previously written on redefining goals of technology transfer offices, here.  In redefining technology transfer offices, I would focus on their role in promoting the education of students within the university.  It is important to remember that the primary method of university knowledge transfer is teacher to student--for sure, patents are important, but let's keep our eye on the ball.  The technology transfer office, in collaboration with faculty, can play an important role in providing valuable experiential opportunities to students--leading to potential employment opportunities.  This places technology transfer offices squarely within the "core" mission (and "business") of the university and fits them nicely with partnerships in academic units that run business clinics, for example.  It may even lead to fundraising.  

Legislation Introduced in Maryland to Restrict University Licensing: The Future?

The Electronic Frontier Foundation (EFF) has started a program called Reclaim Invention.  The premise of the program is to ensure that universities, particularly public universities, are not licensing patents to so-called patent trolls.  There are basically two prongs to the effort: 1) mobilizing people involved with universities to pressure universities to sign a patent pledge—essentially volunteering to engage in certain conduct concerning university inventions and licensing; 2) pushing state legislatures to adopt legislation restricting universities licensing practices.  The EFF’s proposed legislation includes the following two thrusts:

First, it requires university technology transfer offices to adopt a policy committing them to manage patent assets in the public interest. University policy should include:

• researching the past practices of potential patent buyers or licensees;
• prioritizing technology transfer that develops inventions and scales their potential user base;
• endeavoring to nurture startups that will create new jobs, products, and services;
• fostering agreements and relationships that include the sharing of know-how and practical experience to maximize the value of the assignment or license of the corresponding patents.

The second part of the legislation voids any agreement to license or transfer a patent to a patent assertion entity. [emphasis added]

The EFF’s program is based on research by Professor Robin Feldman concerning Intellectual Ventures relationship with universities. 

Notably, legislation taking the EFF approach has been introduced in the state of Maryland.  So far, the status line on the Maryland legislature webpage states: "In the House -- Unfavorable Report from Appropriations -- Withdrawn." Notably, the synopsis of the bill states that it conditions student financial assistance and research funding from the state on adopting the policy.  It will be interesting to see if the legislation (or some modified form of it) passes.  For a critique of the EFF’s approach, please see this article in Forbes by noted property rights scholar Richard Epstein. 

The Big Boys and Smaller Players of Technology Transfer Offices

One criticism of technology transfer offices is that some may have difficulty making enough money through deals to cover their overhead.  Surely, the benefits of a technology transfer office shouldn’t be limited to revenue generated and there are other opportunities to benefit a university such as practical training opportunities for students.  Moreover, the local community may even benefit through new jobs and tax revenue.  An article in the Recorder came across my desk this morning concerning University of California, San Diego's (UCSD) technology transfer office titled, "UC-San Diego Director Touts its Plethora of Patents." It describes an interview with a technology transfer office at a high performing University of California campus.  Another notice I received concerns a webinar about how smaller technology transfer offices can “overperform.”  

San Diego, located in southern California, has long been known as a hot bed for biotechnology research.  Interestingly, the article notes that of all the University of California campuses the San Diego campus leads in number of patents.  UCSD produces more patents than UC Berkeley, UC San Francisco and all of the other UC campuses.  It also produces more deals, more invention disclosures and sometimes even more startups.  The Director, Ruben Flores-Saiib, notes that this is maybe because of the size of the institution and number of departments.  Flores-Saiib, a recent hire at UCSD, also discusses efforts to expand opportunities for UCSD start-ups including a partnership with a VC that evaluates all startups from the university.  He further notes some of the patent prosecution firms UCSD uses as well as stating that they apparently avoid up front licensing fees and are flexible in working with milestones and royalty payments for firms. 

Notably, Tech Transfer Central is offering a webinar (Thursday, February 23rd) on successful strategies by "overperforming" smaller technology transfer offices by technology transfer officers from Wilkes University and Southern Mississippi University.  Here is a description of the webinar:

Our presenters represent two distinctly different tech transfer offices in distinctly different areas of the country. Each presents its own unique set of challenges, but both TTOs have thrived by employing unique methods for doing more with less, and implementing efficiency strategies that allow for high ratios of commercialization per research dollar and per FTE. Whether your office is considered small or not, you’ll come away from this nuts-and-bolts session with dozens of proven strategies for stretching your budget and your staff, and boosting your TTO’s deal flow. Register today for this information-packed webinar filled with best practices and tons of takeaways. Our panelists will discuss:

• How to navigate your high-dollar budget line items using:

o    Volunteers

o    Interns

o    Alumni

• How to impact your local and regional start-up community and the economic development goals with a smaller budget and fewer staff
• Small office strategies for building strong TTO/faculty relationships
• Ecosystem development in smaller markets
• Strategies for filling the funding gap in flyover regions
• How a variety of approaches to commercialization benefit smaller ecosystems:

o    Traditional licensing

• Entrepreneurial focus
• Engaging corporations in smaller regions
• Tactical and strategic methods for success with limited resources         
• Lessons learned and forecast for the future

Association of University Technology Managers Releases FY 2015 Highlights Report

The Association of University Technology Managers (AUTM) has released a Highlights report concerning its FY2015 annual survey.  The results of the survey are promising.  For example, there was a 15% increase from the prior year of licenses and options executed.  An almost 15% increase in new patent applications filed.  Over an 11% increase in the number of start-ups created.  And, a 5% increase in both research expenditures and invention disclosures.  I am not too excited about using patent applications and grants as a metric for technology transfer success, but the licenses, options, number of startups and research expenditures is positive.  Moreover, the supposed increase in using consultancy agreements and licensed know-how divorced from patents by technology transfer offices may point to even more actual technology transfer happening from university to the private sector.  (I am assuming the reported licenses and options are associated with patents.) 

The Highlights further states that 879 new products have been introduced to the market and $28 billion “in net sales from new products” has been realized.  Interestingly, 785 of the 1,012 startups were formed in the research institution's home state.  Importantly, $2.5 billion in licensing income was collected which is 28.4% more than the prior year.  It would be interesting to see that $2.5 billion number broken down by patent and product/service (for a critique of using revenue generated as a metric of technology transfer success, see here).  AUTM notes that 3.8 million jobs have been created as well as 153 new drugs and vaccines on the market “because of the Bayh-Dole Act.”  There was about a 65% response rate to the survey—202 of 308 institutions participated. 

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.)