By Jim Baer
In 1980, the Baye-Dole bill was enacted by Congress to speed
up the process of moving technologies from the laboratory to
the marketplace by clearing the way for universities to claim
legal, and, therefore, financial rights to federal government-funded
innovations developed by each faculty. However, this was an
unfunded mandate.
However, new layers of administration developed that centralized
the process, narrowing the view of innovation as only patents,
and emphasized revenue generation, rather than volume of innovations
the university commercializes. Great financial pressures had
a decidedly reversing affect.
The Ewing Marion Kauffman Foundation, based in Kansas City issued
a report earlier this spring claiming that university focus
of limited technology transfer was on patenting and licensing
of technologies that promise, big fast paybacks.
The reports suggests at the least universities should begin
to focus on hitting doubles, not homeruns.
The foundation has some 90 employees, and works from a $2.3
billion dollar endowment to refocus research on a more spirited
entrepreneurial economy. According to Lesa Mitchell, vice president
for Advancing Technology with the Kauffman Foundation, universities
should focus on a volume model that emphasizes the number of
innovations that university research generate and the speed
at which those innovations are commercialized.
To reverse these trends, the Kauffman researchers recommend
that universities consider adding one or more volume models
to their commercialization arsenals. This report was generated
by researchers Robert Litan, E.J. Reedy and Lesa Mitchell.
They suggested the following models:
Free agency model: Faculty members have the power
to choose a third party (or themselves) to negotiate license
agreements for entrepreneurial activities, provided they return
some portion of the profits to the university.
Regional Alliances model: Multiple universities
form a consortium that develops mechanisms for commercialization.
Economies of scale allow for lower costs of the commercialization
function overall, and the universities are able to share costs
among multiple participants. This model may prove particularly
attractive for smaller research universities, which may not
have the volume to support a seasoned and highly able licensing
and commercialization staff independently.
Internet-based model: Closely related to the regional
alliance model, the Internet-based approach uses the web to
facilitate commercialization. The iBridge Network, a program
funded by the Kauffman Foundation that works with a consortium
of universities, is an example of such a model.
Faculty loyalty model: This calls for universities
to consider giving up their intellectual property rights, anticipating
instead that loyal faculty will donate a portion of their commercialization
proceeds back to the university.
One who took it to heart is Mike Nichols, Director of the Office
for Technology Management and Industrial Relations, University
of Missouri at Columbia.
He has acted on various suggestions of the Kauffman Foundation.
“The Kauffman report was right on target,” says Nichols. “There
has to be a lot of interaction between universities and industry.
We need ways to work out projects to develop deals and to develop
them faster,” he says.
Nichols belongs to an organization underwritten in part by the
Kauffman Foundation —the University—Industry Demonstration Partnership
(UIDP) that meets twice a year to develop new ideas and forge
new partnerships.
“There have been notable breakthroughs and we need ways to create
best practice methods so to speak,” says the university director.
Business modeling and development has become very important
to the University of Missouri since they are working on a continuingly
declining financial support from the state legislature. “We
are big business here. We do a billion dollars worth of business
and we have 20,000 employees in the system,” states Nichols.
“Developing new tech transfer has become the fourth mission
of the university—naming teaching, research and outreach as
the traditional top priorities.
Mizzou has forged business relationships around the country
and most notable is with Santarus of San Diego (a pharmaceutical
company developing stomach acid medicine). That arrangement
is worth $7 million a year to the school. They also collaborate
with Monsanto and Dow Chemical, working closely with the agricultural
sciences industry. “These are exciting times for us. When I
came here we were doing four deals a year. Now we are doing
40 a year. This work is a stark reality of what a university
needs to do,” says Nichols.
Marsha Mellitz, president and CEO of the Center for Emerging
Technologies in St. Louis has watched these models suggested
by the Kauffman Foundation closely.
“I understand the needs of universities to recoup their expenses.”
In the meanwhile, Mitchell of the Kauffman Foundation says it’s
essential to continue funding university projects. “We very
much need entrepreneurial initiatives in the fields of medicine,
engineering and all phases of business to move our technology
forward.”
“Our goal is seeing that there is a speedy transfer of technology
from university labs to the market place,” says Mitchell. “We
took four years of research developing this report so others
in the field could better understand.”
That particular report was released by the Innovation Policy
and the Economy Summit, sponsored by the National Bureau of
Economic Research (NBER) in Washington, D.C.
“We are now at a critical point in which the incentives of some
universities may lead to the codification of a system that will
inhibit rather than promote commercialization of technological
breakthroughs,” says Robert Litan, vice president for Research
and Policy at the Kauffman Foundation.
Efficiency in bringing innovations to the market place is an
overriding goal of the institute according to Mitchell.
On this end of the state, Brad Castanho, co-director of the
Office of Technology at Washington University in St. Louis explained
their mission and goals.
“Like many other schools, we are a research and teaching institute.
That is part of our mission. Our goal is moving intellectual
properties from the university to the market place as quickly
as possible.
“We are driven more by the ‘deal flow’ than the dollar,” he
says flatly.
“To make this happen, everything needs to be in sync,” Castanho
indicates. By that, the brain power, the research, the venture
capitalists and the entrepreneurs all need to be lined up properly.
“Tech transfer successes are based on very few opportunities.
The best ones lead to the sale of products and drugs,” he states.
“This is a contact sport so to speak,” says Castanho. “Tech
transfer is different and getting better overall.”
Mellitz has no dog in the fight so to speak, other than to be
sure the process just doesn’t completely bog down.
“Take for example the human Genome. We were working with a lot
of raw data, and now we are seeing some very interesting results.
It cannot be about short term gains. It is very expensive to
run university operations and for every boom, there’s been a
bust.
She pointed to the breakthrough by the University of Florida
with its enormous success with bringing Gatorade to the market
place. “At the same time Mosaic became Netscape which turned
out to be a big financial give-a-way by the University of Illinois,”
she recalls.
“Universities deserve to get paid. They need to get back the
money for the work they’ve done for everyone,” she says. “There’s
just no money with all these start-up companies. They need to
accept working with standard contracts just to limit expenses,”
says Mellitz.
Universities need to heed the advice of the Kauffman Foundation
and swing for doubles and let the homeruns take care of themselves.
Then, everyone wins.
http://www.kauffman.org/pdf/NBER_0407.pdf
