University intellectual property management involves five related areas. Each has a distinct operating model and value points. I summarize these here. Many variations possible.
Generally: Split private/open/university–subscription, membership, site license, open–early relationships, light footprint, transaction time <2hrs, repeat business, into labs early by years, across campus in many depts, front end for conventional patent transactions, added value includes visibility, market channels, referral networks. STUFF EVERYWHERE Key tech transfer question: Should this asset be taught to industry? Value: Value is in relationship with lab, utility of asset, updates and support. Shift copyright to trademark, copyright to patent, copyright to workshop or services. Core asset is the project that holds the university-side assets and relationships. Tools--2nd generation approaches, open source, publication protocols. Challenge—organizing projects, spinning up systematic distribution, managing multiple forms of IP, transitions as various assets rise in prominence. Classic Patent Commercialization
Generally: Patentable inventions with “commercial” value–primarily university–relationship starts with disclosure–filing and compliance overhead, significant footprint, usually one-off exclusive license, limited to biosciences, engineering, some chemistry and hardware, focus is on product development in exchange for royalties on sales. UP TO A FEW HUNDRED PER YEAR TO REVIEW, 1 in 2000 A BIG HIT.
Key tech transfer question: Does this invention have commercial value?
Value: Value is in patent license, copyrights are often flushed, especially in research agreement IP clauses with industry sponsors. Asset is product in market for success story.
Tools—marketing platforms, trade shows, technology databases, industry experienced agents.
Challenge: Finding commercialization partners, especially outside biotech, knowing industry product roadmap details, assessing early stage technologies for viable economic product lives.
Start up Commercialization
Generally: Split university IP/business concepts–relationship starts with business idea–university assets split between those useful to raise money via diligence and those that can support company business. Very significant footprint– IP plus multiple clearances in university–COI, academic/business supervision, improvements, sponsored research back to lab, equity, personal consulting arrangements, line management positions, involvement in business end of launch–broader reach than classic patent commercialization–can involve services-based businesses as well–economic development visibility. TENS TO TWENTIES PER YEAR.
Key tech transfer question: Is there a viable company here?
Value: Focus is on company development for equity value–often slips off of licensed university tech when first round comes in—making tighter diligence to prevent restricts company and lowers IP value and relationship to company by shifting risk–equity may go to university treasurer where it can be lost in shuffle. May require exit schedule to disable timing market/insider information issues. Assets are management, relationship with venture backers, company visibility, and jobs. Value is in equity + royalties hedge, sometimes in related research agreement.
Tools: Incubators, business acceleration, business parks, “Connect”-like programs, working referral lists, aligned seed funds, business school partnerships.
Challenge: Connecting up new business with university IP, adding value before capturing it.
Industry Research Contracting
Generally: University typically claims rights—industry and increasingly foundation sponsors aim to gain control or force no control–default is usually first right to negotiate exclusive or non-exclusive royalty free (NERF)—relationship starts with IP clause in research contract unless part of start up or research tied to license–footprint in negotiation, generally license is pro forma–rarely value in industry sponsored research agreement (ISRA) licenses–procurement folks often play to win across finance, risk, control so takes diligence on details or compliance and contract surprises become later contract problems—includes SBIR/STTR/State research stimulus programs—can involve federal funds through industry prime—material transfer agreements (MTAs) can act as ISRAS—focus is on technology extension, research goals, student training. SCORES PER YEAR—POTENTIALLY HUNDREDS OF MTA TRANSACTIONS.
Key tech transfer question: Can we obligate IP upfront this way?
Value: Value is in indirect cost charge and visibility of association.
Challenge–obligations cross all licensing operations but usually tracked in different unit and databases, high value relationships with low value IP lead to low priority pressure.
University generally holds rights in resulting IP–donors may have undocumented interests—may be nudge to release IP openly or work collaboratively with donor to create joint property—can be charitable or basic research tax credit based—relationship usually starts with Development Office—tech transfer may never see IP—reach especially in engineering and sciences—may take form of major contributions for buildings and endowed positions; affiliates programs; fellowships; targeted research—often mediated by deans and chairs—can be workaround to indirect costs, especially when concurrent gift and contract target same lab—can be in-kind and involve donor proprietary assets (rights, equipment, materials, information)–focus is on visibility of association, strategic relationships–TENS PER YEAR—AFFILIATES MAY ADD MANY MORE.
Key tech transfer question: Does this relationship affect how we manage IP and relationships?
Value: Association with donor, potential future business relationship.
Challenge: University IP claim may be seen as block to gift culture, gift may appear to pre-empt broader licensing efforts, managed with databases and units that generally do not coordinate with IP.
These five areas of activity are related financially and operationally. Information dissemination projects are front end for patent licensing and company starts, especially ones that don’t require patents and promote IP management across campus. Patent commercialization licensing holds the core expertise in deep patent controls in key areas like biotech (and should be in energy, nano, transportation….) and can contribute to both information and start up transactions. Start ups can form without university IP and again work more broadly across campus, but venture capital moves its sweet spots for investment so university programs have to be tuned not only for areas of research productivity but also for changing market conditions.
Strategically, emphasizing venture backed start ups implicitly pits venture against strategic industry partners. Industry gift emphasis implicitly pits large company relationships against licensing efforts. Some bigs respond well and others see start ups as a threat.
Venture backed starts tend to slip outside the UW IP portfolio and draw on research/technology expertise to build new outboard IP. Particularly true of the business-plan competitions and technology challenges. Perhaps half or more of IT-based starts shift away from licensed assets for first products. May leave university with patent portfolio that is highly related but politically can’t be put in play or else reads: “greedy university blocks innovation at new start up over license”. So comes down to how much investment in patenting is one going to walk away from in the start up portfolio?
A good overall first-order financial metric is the number of relationships and associated value coming to the university from the sum of these interactions–licensing, services, industry sponsored research agreements, industry gifts. The sophistication is to recognize the interplay between the various value propositions and shifting IP to the best area for each project/department/industry/finance model while navigating the expectations of the royalty sharing and compliance policies that naively expect consistency and due process for all regardless of differential merit.
The insightful IP manager—and university administrator—is also able to identify second-order metrics—where productive point relationships generate other opportunities that matter later. Thus, an open source distribution with a visible leadership position may attract a major strategic partner. This is a tremendous second-order outcome, even though the software distribution generates no licensing revenue and the new partner may not even benefit the software development team. Similarly, a successful start up slipping university IP can attract additional start up candidates anchored in university IP. Second order metrics are assigned, not tracked mechanically. This is a vital role for chairs and deans who are able to recognize and support second order outcomes. No policy schedule will replace exceptional awareness of who is contributing to the overall program and a readiness to shift resources and opportunity towards these first order relationship point folks.