Transcript Universities’ Challenges

Novel and Effective Strategies and
Partnerships among Academia,
Industry and Government: Innovation
through Commercialization
Roberto Peccei
UCLA
• In the nexus between Government, Universities and
Industry two of the three links work reasonably well.
However, much could be done to improve the link
between Academia and Industry
• Relations between Industry and Universities often
flounder on the issue of Intellectual Property, and
academic institutions are often accused to be an
impediment to commercialization, despite the
existence of the Bayh-Dole act
• To really transfer effectively academic innovation into
commercializable products one must work on making
the weak link stronger
•
i.
ii.
Purpose of today’s talk is two-fold:
Help trace the reasons why Universities are difficult
to deal with
Outline a new project which has emerged from the
Government University Industry Research
Roundtable (GUIRR) aimed at helping improve the
University-Industry connection
Why are Universities so
difficult to work with?
Aligning the players and the mission
in the process of Technology
Transfer
• The most important challenges of Universities in
dealing with intellectual property and technology
transfer is to have a clear vision of what they want to
achieve
UC Mission Statement
i.
ii.
iii.
Provide services to faculty that support effective
research collaborations with industry and enhance the
University’s research and educational capacity
Assure promising University discoveries are transferred
to the private sector for the development of products
and processes that benefit the public
Effectively and fairly manage the University’s intellectual
property assets for the benefit of education and
research programs of the University and the
communities it serves
Technology Transfer is part of the Academic Mission
• Even when that is achieved, a second important
challenge arises for Universities in this area. This is to
make sure that the Administrative and Academic side
of the University are aligned in pursuing this mission
Administration
o
Academic
• Aligning the Administrative and Academic side of
the University in pursuing this mission is very critical
Administration
o
Academic
• Generally speaking, Administration is fully on-board
with goals of Technology Transfer program, but the
Academic side has a more blurry perception.
• Success of Technology Transfer program depends
crucially on achieving 0th order alignment between the
two sides of the University.
• However, matters in detail are much more
complicated
Chancellor / Provost
1
Administration
Vice Chancellor Research /
Vice Provost for IP
2
Director of IP Office
0
Deans / Dept Chairs
3
Academic
Faculty Members
4
Grad Students / Post Docs /
Research Staff
• Misalignments
in the
Administration 1 – 2
and /or the Academic
3 – 44 can cause
side 3
Universities to deviate
from the stated TT
mission statement
•This is root cause for
the often made
remark by Industry
that “Universities are
impossible to deal
with”
What are the root causes for misalignments?
0
Academics
Administration
Chancellor /
Provost
1
Vice Chancellor Research
/Vice Provost for IP
2
Vice Chancellor Research /
Vice Provost for IP
Director of IP Office
3
Deans / Dept Chairs
Faculty Members
4
Faculty Members
Grad Students / Post Docs /
Research Staff
: University vs Individual goals
: Economic vs Academic vision;
Cash flow [ +/- ]
: Conservative vs Liberal stance
on IP policy; Cash flow [ +/- ]
: Conflicts of Commitment;
Recovery of investments
: Ownership of inventions
Inappropriate interactions are another source of
misalignments
• Worthwhile to explore a bit more other sources of
possible misalignments within the University on the
process of whether, or how, some technology should
be transferred.
• In a University where the Technology Transfer process
functions well, the majority of the interactions occur
between the IP Office and individual Faculty
IP Office
Faculty
• Occasionally for more complex transactions, this
process needs some higher level communications
V C Research / Vice Provost for IP
Deans / Department Chairs
• However, “two-step” interactions usually cause
troubles
Chancellor / Provost
1
Vice Chancellor Research /
Vice Provost for IP
I2
I1
2
Director of IP Office
Deans / Dept Chairs
I1
I2
3
I2
Faculty Members
I2
4
Grad Students / Post Docs /
Research Staff
Normal interactions (I1) resolve most issues. “Two-step”
interactions (I2) sometime help put out fires, but usually
end up by complicating matters
Pharmaceutical
•Challenge is to try to link
effectively the complex
Technology Transfer process of
a University with a diverse
Industry sector
• Important
to understand that IP
posture of Industry is very
sector dependent and quite
different from that of the
Venture Capital community
Chemical
Information Technology
Aerospace
Manufacturing
Biotechnology
Venture Capital
Chancellor / Provost
Pharmaceutical
1
Chemical
Vice Chancellor Research /
Vice Provost for IP
Information Technology
2
Director of IP Office
0
Aerospace
Manufacturing
Deans / Dept Chairs
Biotechnology
3
Faculty Members
4
Grad Students / Post Docs /
Research Staff
Venture Capital
Not a match made in heaven!
Chancellor / Provost
Pharmaceutical
1
Chemical
Vice Chancellor Research /
Vice Provost for IP
Information Technology
2
Director of IP Office
0
Deans / Dept Chairs
3
UC
Office
of
General
Counse
l
Aerospace
Manufacturing
Biotechnology
Faculty Members
4
Venture Capital
Grad Students / Post Docs /
Research Staff
UC even more
complex
A GUIRR Project Aimed at Addressing
University-Industry Technology
Transfer Relations
Project Objectives
• Convene a “congress” of delegates from
industries, universities, and government to explore
the principles that should govern
industry/university collaboration and identify an
array of strategies for translating those into
research agreements.
• Hold a “summit” of national leaders of industry,
university and government at the National
Academies to develop and endorse
principles/strategies for research agreements that
will foster the creation and commercialization of
new knowledge
University-Industry Congress
• First Congress – San Francisco in August 2003
• Second Congress – Washington, D.C. in October
2004
• Third Congress – Washington, D.C. in February
2005
• Fourth Congress – Washington, D.C. in June
2005
• Fifth Congress – Washington, D.C. in October
2005
Balanced Membership
– Universities: public, private, S M L
– Industries: various sectors, S M L
– Government: OSTP and Commerce plus NSF
and NIH
Summit – to be held in Washington DC
on April 25, 2006 at the National
Academy
Main Problem Congress Tried to
Address
Negotiation of sponsored research
agreements (particularly over
intellectual property) is a barrier to
industry-university research
collaboration in the United States.
• takes longer
• increases transactional costs
• little/no benefit results
• advantages to work overseas
Time-To-Agreement Too Long!
(university view)
> 30 DAYS
90
100
80
90
70
60
Frequency
80
60
50
50
40
40
30
30
20
%Percentage of Total
70
Time to complete Agreement
% of Ags completed
20
10
10
0
0
Days to Completion
1 ½ years and
counting!
Time-To-Agreement Too Long!
(industry view)
80
Negotiation
70
153
days on
average,
from T2T7
Days
60
50
40
Other Party
Approval
SOW
RA
Draft
30
Dow
Approval
Distributed
20
Review
10
0
T1
T2
T3
T4
T5
T6
T7
Inconsistency a Headache: Terms and
Conditions All over the Map
Quality of Terms
Character
of Terms
Assignment & Right To Practice
20
20
10
10
0
0
0
0
10
10
Deadline + ROFR
Deadline & Right of First Refusal
20
20
Universities Are Also Impeded By
Current IP Practices
• 95-97% of all research projects result in NO licensable
intellectual property.
• Sponsored research office spends disproportionately more on
staffing (about 5x more, per dollar received) to manage industryfunded research agreements, compared to government-funded
research agreements.
• Long time to agreement can result in complete loss of project. If
wait is too long
– Source of funding disappears (change in management, new fiscal year . . .)
– Technology of interest becomes outmoded (6 month cycle time for IT)
– Funding spent on legal fees outweighs project cost (at this point, most companies
will walk away).
– Sponsor unlikely to return for another project.
– Faculty become discouraged
– Students move on
Evidence that U.S. Industry is Moving
Sponsored Research Overseas
• Half of IRI survey respondents admit to sponsoring
research overseas as a result of difficulty in IP
negotiations with U.S. universities
• Volume of industry sponsored research growing
overseas: in 2003, MIT at $81.5M, Tsinghua at $79.7
M
• Hewlett-Packard congressional testimony (9-17-02)
Two Financial Reasons Why it is
Important to Solve This Problem
Industry Sponsored Research
(Millions of $)
Net License Income
(Millions of $)
2,500
2,000
1,500
1,000
500
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
U.S. R&D Source of Funds: 19532002
SOURCE: National Science Board, Science and Engineering Indicators-2004
University-Industry Congress
• Focused On:
– Challenges becoming
successes
– Building trust and
teamwork
– Defining and
prioritizing the issues
– Finding a “Common
Cause”
– Developing flexibility
– Building on existing
efforts:
• Working Together,
Creating Knowledge
(BHEF)
• Responsible
Partnering (EIRMA)
• Issues:
– Understanding core
missions that are
fundamentally distinct
and occasionally
opposed
– Understanding each
party’s bottom line
– Moving science into
commerce
– Old questions, new
solutions
– Moving from “policy”
to “reason”
Framework Led to Three Guiding
Principles
1. A successful university-industry collaboration
should support the mission of each partner. Any
effort in conflict with the mission of either partner
will ultimately fail.
2. Institutional practices and national resources
should focus on fostering appropriate long term
partnerships between universities and industry.
3. Universities and industry should focus on the
benefits to each party that will result from
collaborations by streamlining negotiations to
ensure timely conduct of the research and the
development of the research findings.
This Sounds Like Apple Pie, But Each Principle is
Deeper Than it Looks. For Example. . . .
1. A successful university-industry
collaboration should support the mission of
each partner. Any effort in conflict with the
mission of either partner will ultimately fail.
a. This explains why universities can sometimes
give away IP in highly applied projects but not in
fundamental research (reverse true for
companies).
b. Because companies must return a profit to
shareholders, their IP arrangements must reflect
their business models. These differ drastically
between companies, a reason why no “one size
fits all” agreement will ever work across
companies, while master agreements for a
specific company (or division within) often will
work.
Results of the Congresses are
4-fold
• A set of guiding principles for University-Industry
partnerships.
• A collection of living studies (case examples) of how
institutions have used innovative ideas for resolving
problems that commonly arise in U-I agreements.
• Preparations to launch the test phase of a U-I
demonstration partnership, a new forum for
developing solutions to difficult IP problems.
• Development of a new software tool for creating
intellectual property agreements. This turbonegotiations approach takes into account the needs
and contributions of the parties in guiding the
negotiators through the process of building an
agreement.
The launching of the UIDP will allow for
institutional beta-testing of new approaches
to contracting arrangements
• Working groups will be
focused on designing
institutional experiments.
• There will be a broad
information-sharing forum on
latest news, best practices,
etc.
• UIDP is modeled on the 20
year success of the Federal
Demonstration Partnership in
driving institutional change
on a national level.
Forum
Demonstrations
First Project of Proposed UIDP
Turbo-negotiator
• Interview tool aimed at guiding both sides to come to
agreement on nature of project.
• Answers to interview questions allow project to be
plotted in n-dimensional “project space.”
• Depending on location in project space, software
suggests potential applicable clauses.
• Each clause can be clicked on for more information
on history, use, pros and cons for industry/university
. . . great depth of expertise.
Origin of IP Disputes
• Industry and University do not have same
mental concept of project to begin with.
– The “TurboNegotiations” model would create
an instrument that would allow each partner to
examine assumptions regarding the type of
project they are working with and support
them in coming to a common understanding.
Questions for Each Partner Would
Focus on 3 (or more) Basic Parameters
• nature of project (fundamental
research  applied research)
• nature/extent of contributions and
investments from each party
• nature of deliverables/likelihood of a
patentable invention
Example of Project Parameter
Space
1
Relative Investment
1 = high for University
-1 = high for Sponsor
1
1 = high probability of patent
-1 = low probability of patent
1
-1
Nature of Research
-1
1 = Fundamental
-1 = Applied
-1
Invention Probability
• Tool will expose the likelihood of valuable IP
once both parties have unambiguously
agreed on the coordinates of their project in
“IP space”
- e.g. IT project in applied research, even with high
probability of invention, almost never yields large licensing
revenue.
• Junior staff bound to templates need deeper
knowledge to be flexible
– Instrument should provide multiple options for each
situation, and educate user on consequences and
implications of each.
– Instrument should provide support for decision-making
For example, a costly project for a company with direct
impact on its current business, but with little chance of
patentable inventions would be given by (-1, -1, -1)
• T-N output based on this answer would suggest the
following terms for inclusion in the agreement
– ALTERNATIVE i: The University shall grant the Company a
commercial license on fair and reasonable terms for an
up-front payment at the time of execution of the license.
Explain pros and cons of this to me (hyperlink).
– ALTERNATIVE ii: Company agrees to fully pay or
reimburse patent application expenses for those
inventions it wants. University shall grant Company on
fair and reasonable terms an exclusive commercial license
in a field of use in return for consideration to be mutually
negotiated but which may include milestone payments,
and/or a licensing fee. Explain pros and cons of this to
me (hyperlink).
T-N Tool is Designed to Address
Common Negotiation Failure Modes
• Does not assume a “one-size fits all” solution
– Each project is unique - Each agreement is unique.
Tool designed to get as quickly and painlessly as
possible to that unique solution.
• Forces “meeting of the minds” up front: each
party must identify what s/he wants out of the
partnership being negotiated.
– Addresses unspoken, differing mental perceptions of
same project. Case studies show these are often at
the root of an inability to reach agreement.
• Distinguishes between situations where treatment of IP is
important vs. not important (95-97% of research
agreements produce no valuable patents but most are
fought over nonetheless)
– Forces the discussion between parties as to whether
the IP is worth fighting over in this particular instance.
– In the beginning, both parties will need to guess at IP
likelihood, and have their guesses agree. In the future,
one may be able to have the program predict this,
based on historical data culled from sponsored
research and licensing offices.
•
Educational tool for negotiators in trade-offs and IP
considerations
– Many individuals assigned to negotiate these unique,
complex agreements do not have the depth of training
required to navigate them. This tool provides ondemand educational material.
• Easy-to-use tool would assist broad adoption
– Move towards national uniformity in approach.
• Tool will generate its own metric of success (time-toagreement)
– Electronic time-to-agreement module would allow
institutions to track reduction in processing time as a
result of using the tool, and to correlate processing
time with characteristics of the project under
consideration.
– Plan is for UIDP to try to adopt tool currently in use at
Georgia Tech.
– Nationwide adoption of the same tool everywhere
would ultimately allow automated national
uploading/compilation of time-to-agreement data,
and allow the tracking national trends in IP
negotiations.
Concluding Remarks
• For a University to achieve the goal of innovation
through commercialization will require aligning its
academic and administrative sides
• National efforts aimed at supporting better
processes for reaching collaborative agreements
between Universities and Industry deserve
support (UIDP)
• Specific tools (e.g. Turbo-negotiator) offer novel
opportunities for re-examine processes which
have not been very effective in the past