Next Generation Technology Transfer

Posted on October 28, 2010 by Gerald Barnett

After 30 years of effort to build a patent practice around university research, university technology transfer is poised to shift.  The pressure presently being put on central control and rigid processes in the name of efficiency is welcome.  This pressure exposes the limitations of the model and the problematic intent of those behind it.  Rather than developing innovation-in-research, the conventional pathway now lies in research-in-bureaucracy.  Of course, it is a sincere, kitten-eyed bureaucracy, dedicated to the public benefit (meaning licensing money for universities), and defending the public (from those awful, greedy, hopelessly inept faculty researchers who could not possibly have any way to develop their research by any other means).

The present model will break because it is

*non-responsive to Bayh-Dole in practice

*compulsory rather than collaborative

*overburdened with inventions it cannot handle

*defensive, anti-innovative, and process heavy

*destroying the distinctive role for university research

That’s okay.  Call some place paradise, kiss it good bye.  When the change comes about, then the US will be again able to use its university research capabilities to compete once for a place in world innovation markets. Continue reading →

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Slumming and unslumming

Posted on October 27, 2010 by Gerald Barnett

I have been reading Jane Jacob’s The Death and Life of Great American Cities.  I find myself taken with her account of the Blighted Dullness of orderly “garden city” planners. Jacobs argues that city streets become vital productive places when there is mixed use throughout the day, short blocks to encourage multiple routes, a mixture of old and new buildings. Orderly systems reasoned out on paper don’t get at the details that make a street a vital place.

Jacobs argues that it is the role of districts to understand the street and interpret its needs with substantial force to the necessary centers of money, policy, and power of city hall. One cannot expect city hall to understand the detail of any particular street in the city. Nor can one expect a street to come en mass to just the right city hall meeting at just the right time to express its common needs. The district plays this role. A neighborhood, a collection of streets, a department, a tech transfer office.

What happens, I wonder, if the district goes over to the politics of city hall and doesn’t voice the concerns of the street, but rather seeks ways of imposing the ideas of city hall on the street, to make things regular, orderly, the way it looks nice on paper? Blighted Dullness! The city creates slums rather than unslums.

Is the university in making technology transfer orderly, compulsory creating its very own technology slum? Jacobs points out that the slumlord sees good business in a slum, while the central planner cannot connect up the orderliness of the plan with its consequences in people’s lives. Put another way: is the university becoming a slumlord to research innovation by claiming ownership of assets that it is unwilling–indeed, not capable of–developing?

What would a university innovation practice look like, if the goal was to be in the ordered domain, on the edge of chaos? If the job of the technology transfer office was to be a district, to articulate the needs of the street–the expertise on the edge–to those with power?

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Excuse Theory

Posted on October 27, 2010 by Gerald Barnett

The most robust area of university technology transfer innovation is the formation of excuses for why the class of success stories is robust but apparently so little is happening.   Here are five typical excuses.  May as well learn them by heart. Continue reading →

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We are *not* drowning kittens

Posted on October 27, 2010 by Gerald Barnett

From time to time that it really does happen that someone invents, gets patents, raises investment, and builds a product that gets sold at market.  We say, this event is an instance of a class, or a metonymy for the class.  The aspiration is, this happens often.  The aspiration is, by our efforts we make this happen, and make it happen more often than it would otherwise, and in better ways, and in good ways.   The aspiration is, how could you dare poke holes in our aspirations?   How will we get anything *done* if these aspirations are not held up as the exemplars for our work?

Beating up on tech transfer office aspirational statements is like threatening to drown kittens.   We will have to be careful.

We can restate the basic question as:  is the class robust?  That is, does invention to product happen this way all the time, or once in a blue moon, or once a decade per $2 billion of research funding?   Further, if we want commercial innovation to happen this way, what are the methods to use, and what of these methods involve universities and their research personnel? Continue reading →

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Innovation Stories

Posted on October 27, 2010 by Gerald Barnett

The story of invention to money happens, generally, afterward.  It is a way that stories like this are told.  Once there is a product, one can pick any starting point and tell of challenges and effort and luck, so long as one ends up with the product getting sold–“a success”.   A typical starting point for such stories, by convention, is an invention.

But it need not be.  The starting point could be a problem, or a life changing event, or a lucky meeting.  Some products are sold without inventions (like a good meal in a restaurant, or a cell line).  Others become valuable later because someone recognizes their importance.    Invention to money is *at least* a good story pattern.  The question is:  is it more than that?   Is it worth *trying to make the story true?*

Should life imitate art that claims to imitate life?  Should IP policy aim to enforce such imitation?  By trying our very, very hardest to make this story, and just this story (we are focused!), come true, are we in fact even doing what it takes to make such stories come true?  That is, is the selection of details that makes a satisfying story of innovation the selection of details needed to build decent support for the engagement of research and community?   Or even to build decent support for commercialization of new products and practices? Continue reading →

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Unwinding the Little Linear Model

Posted on October 25, 2010 by Gerald Barnett

Let’s unwind university technology transfer practice, from the little linear model out.

1. Commercialization as a product paying a royalty under an exclusive patent license. How much of research invention output gets there?  After 30 years, it appears fewer than 10%, maybe fewer than 1% of reported inventions.   Kauffman Foundation calls this “sub-optimal” and AUTM responds, no it’s not.  I agree with AUTM.   It’s optimal.  Won’t get any better than this.  Same licensing rates as the federal government had all those years ago.  The only improvement left is in building better excuses.

2.  Technology transfer as a push of patents to industry. This limitation treats university research as the start of a process, and that it is the university’s job to get a share of any downstream benefits by taking an early patent position.   It is not considered that innovation might go the other direction, moving from some non-university insight into the university for scientific work or validation, while moving in another direction for development.  Then the university’s inventions would be an ancillary bit, not the start of something new.

3.  The need for license contracts. The little linear model, as implemented by universities, requires a claim of ownership in inventions, which in turn requires an act of licensing, and that in turn requires contracts.  Contracts are remarkably challenging things for universities, carrying lots of overhead and worry beyond the basic idea of agreeing not to sue someone for practicing what a research team has uncovered.  The limitation of the little linear model is that it requires the use of contracts.  In one university, a license is construed as a contract document, running to scores of pages, while a non-assert may be a single sentence buried in an industry sponsored research agreement (or federal contract, even).  Even though a license is a promise not to assert, a license contract has to carry all that overhead to be allowed through the process.  That’s quite a limitation.

4.  The need for a license. Back it off even further.  An invention is just another research artifact, like data, discovery, software, technical reports, tangible materials, insights.  Putting a claim of ownership on it is transformative.  First that claim of ownership by the university requires individuals to determine their personal interest in ownership.   Anywhere there is ownership without a clear intention, there is uncertainty and risk for everyone else—not just industry but also all other universities and other research organizations.

Second, once one has ownership, then that ownership has to be managed as to licenses.  Without licenses, no legal practice of the invention.  If a university is unable to grant a license—whether a tightly negotiated one with those pesky but desirable monopolists or a “just a tax” license, going for the money without the more excellent public good of stuffing the pie hole of a monopolist first—then everyone lives in uncertainty of what the university may intend to do.  No licenses granted = exclusion of practice.

5.  Woah, you mean technology transfer might take place without licenses? Yup.  But let’s keep some focus.  We are talking patent licenses, where the university has claimed patent rights to research-originated inventions, and those licenses run from the university to others.  We still could be dealing with other forms of license—copyright, say.  An open source license is a copyright license with recipient limitations on setting redistribution conditions.  And these licenses might not run from the university to others, but from individuals to others, or from others to others.  Even without an ownership claim, a receiving organization might want paperwork clarity with regard to provenance or known hazards from the providing organization.  Not a license, more like a manifest or shipping invoice.

A technology is a way of doing some useful thing in the material world.  It is not merely a trendy sounding synonym for invention or for patent.  An invention may suggest a new technology, or it may be an extension of an existing technology.  More so, what is an invention but a conception of something new and unanticipated recognized and made evident?   The thing that makes an invention part of a technology is the web of expertise, practice, products, determination, and tools that allows the invention to be used.

A nail may be an invention, but it is the hammer, and the ability to use the hammer, and with a knowledge of the right materials, that is necessary to turn that nail invention into a “fastening technology”.   It is a limitation to think of research inventions as technologies, or that the act of licensing a patent in such an invention is technology transfer.  Licensing patents is a form of arbitrage.   It moves around control of a right.  If licensing patents is part of technology transfer, it is generally subordinate to the emergence of a broader capability than that of infringing the licensed patent.   That is, from no-technology to technology, or from technology to improved technology, or from that technology to a different technology.   It is a limitation to assert that the patent license is the first thing or the most important thing or the only thing that enables these relationships.

True, there are times when it is true, the patent license does a lot of work.  The deep down thick thing, though, is to assume that by trying harder with even more research inventions, got by compulsion, one can make this true in general.

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Limitation and Focus

Posted on October 25, 2010 by Gerald Barnett

It is easy to confuse focus and limitation. Focus selects valuable things from diversity, mobilizes resources, and aims to achieve a goal. Limitation cuts off consideration of opportunity from diversity and sets up rules to make things simple (or at least less complicated).  University technology transfer is generally limited, not focused.  I would like to see university technology transfer thrive. It won’t, until it gets this difference.

Most university technology transfer offices run with limitation, but treat it as a virtue. Much of the limitation is handed to them by the linear model, but they continue the job themselves to make the limitations of the model stick in IP policy and in their local practices.

From an invention management perspective, this is all good. Inventions are commodity products.  The job is to pick from them the ones that will make money. The best way to do this, from an institutional limitation perspective, is to claim all inventions, and then pick through them. Limitation practice means establishing standard procedures to pick through things. Transparency means creating committees of faculty, administrators, and business folks to observe the picking process.  The administrative term for this picking over is “commercial potential.” But the actual deal is “money any way you can.” Except, of course “any way you can” reduces to “any way the institution permits” and that gets us back to the limitations imposed by institutions rather than the focus required of, say, an entrepreneur.

Other variations on the theme are “we are a full service office” and “we can do anything.”  Offices making such claims are generally not full service and cannot do much even within their chosen model. Failing to acknowledge limitation is one of the more egregious of their limitations.

Let’s look at how this works. First, the linear model, our old useless friend. It goes: invention to patent to marketing to license to money. The trigger event is a report of invention in research, the value added is to slap a patent monopoly sticker on it, and the outcome is money.  Oh, and the politics of it is, university money = public benefit. Times money received from licensing by the reciprocal of a typical patent license royalty rate (say, x50 for a 2% rate), and divide by an average salary without benefits and overhead and you’ve got “job creation” without ever counting jobs or considering jobs lost, or jobs switched, or profits taken.

The big horseradish in the sauce of the linear model is the magicality of going from marketing to license. The grail according to the Carolina Express folks is offering up a non-descript biotech license done once to everyone, with the threat if you don’t take it you will actually have to deal personally with licensing staff, their apparently stubborn and unpredictable attorneys, and a distracted review chain that’s unable to prioritize. The upshot of such an “express” deal is: “don’t ask us to focus, just take the limitation we have set up in the name of efficiency.”

The institutional linear model of licensing limits technology transfer to patents licensed to monopolists for sale of products. No royalties, no reason to license. No monopoly, no reason to invest. To the licensor of monopolists, a non-exclusive license is “just a tax.” That’s as far as the intellectual depth goes. Not standards, say, or cross-licensing, or public license, or open innovation. Commercialization does not mean, say, company internal use, but rather sale of product.

Still, commercialization is worthy. No question about it. Commercialization is way cool. It is wonderful. Even seductive. Taking the piggy to market (though the piggy might not get what the trip is all about). Technology transfer folks cannot help themselves. They want commercialization. It is the object of their policies and practices. And that’s one of the primary reasons (not the only one) why their practices are limited rather than focused.

There is more to technology transfer than commercialization. There is more to getting to commercialization than trying to hit it big. There is more to hitting it big than always trying to do that each time. IP policies that are set up to make it easier for bureaucrats to hit it big, or even “just in case” someone hits it big work generally against commercialization. They limit the collaborations by which research engages community.  They limit the methods by which patents may promote use. They limit the opportunities for commercial use and development. They limit the ways in which university contributions may be recognized.

Making invention disclosure compulsory, or making invention title automagically vest with a university administration, or claiming to do everything when one lacks the expertise to do even the most basic things–these are not things that focus effort, but rather limit it.

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Metrics of "technology untransfer"

Posted on October 24, 2010 by Gerald Barnett

Stuff arising in research is hardly technology.  Research deals in glimmers and epiphanies, arguable discovery and hypothesis, data and more data, theory formation and creative destruction of theory.   In all this, research inventions are not, generally, technology, and transfer does not take place by licensing, though transfer can be prevented if there isn’t licensing, once one has gone done fool and got patents to exclude others from practicing.

Illustration:  one can license patent rights for an invention on which no further work is done.  The technology is never transferred, merely a right to exclude others from practicing.  Any money arising from the license is arbitrage money, not transfer money.  No benefit to the public.  But you won’t find a single university that separates out such licensing activity.

A better measure of *transfer* of a university licensing office is not properties of what is licensed (like income), but what is claimed as to ownership and unlicensed.   A metric might be the median age in the office of unlicensed inventions.   That would be a good proxy for the effect of university policy in disrupting the inclusion of research invention in the formation of technology.

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Some Wrinkles

Posted on October 24, 2010 by Gerald Barnett

[Seven years ago, before I studied the history of Bayh-Dole, I still thought it was a workable framework for the management of inventions made with federal support. It’s amazing how one’s perspective can change with some context. Bayh-Dole was built to give the appearance of offering something special for research-based inventions, a public covenant of sorts, so that patents on these inventions would be managed “in the public interest,” as distinct from “in the interests of the owners of ordinary patents.” It’s just that Bayh-Dole was also built not to operate in this way at all. Although other pathways of management are possible in Bayh-Dole, and may even be mandated as a matter of altered patent law, at its basic Bayh-Dole exists to open a direct pathway by which pharmaceutical companies (and their research proxies, biotech companies) can gain monopoly control over inventions made with federal support.

Perhaps–I don’t think so, but whatever–it is a good thing that pharmaceuticals gain monopoly control over inventions made with federal support at nonprofits. But if so, then why not just declare this control as federal policy? Why make such a big administrative gesture about “public interest” as a matter of special management? Why even bother to have nonprofit organizations insert themselves into the transactions? Why hide this pathway of invention to stripping inventors of their rights to patent to commercial monopoly? If that’s the goal, then go directly at it. Government funding is merely a subsidy for the investors in pharmaceutical companies. That’s a nice deal, but apparently it’s best to keep the deal out of the public eye, and instead champion the virtues of Bayh-Dole in giving university administrators financial “incentives” to participate in these shenanigans. Continue reading →

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Pressing the Issues

Posted on October 24, 2010 by Gerald Barnett

What are the pressing issues facing university “technology transfer”? If we start with how to encourage a rich engagement between research inquiry and the broader community, we are at the nub of it. The particular variety of engagement called technology transfer also has lots of variations, and the fact that there are variations will no doubt bother some people.  The kind of technology transfer that’s primarily outbound from inquiry to the rest of the world is the focus of most public policy on innovation, and within outbound technology transfer, folks introduce intellectual property and especially patents–and therefore licensing. Folks don’t spend much time on such stuff as technology instruction or demonstration and follow-on collaboration.

For the commercialization crowd, a licensing a patent monopoly is so much more fun than, say, creating incentives for first-in competitive, non-exclusive access. Oddly, one might think that a twenty-year patent monopoly might actually relax the intensity to get something done sooner rather than later, while first in requires a race to get something into play, and build out from there.

This preamble highlights once again how unbelievably narrow it is to accumulate patents to push for exclusive commercialization licensing, especially given the range of other responses available to help publicly funded university research benefit the public. There is a role for patent licensing, even exclusive patent licensing.  And that role can even be a worthy one. But that worthiness does not extend to trashing the broad array of other approaches to university technology transfer. Continue reading →

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