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Ethics and Best Practices

Ethics and technology transfer do not always go hand-in-hand. Share your thoughts and experiences here.


Bureaucracy in Tech Transfer Is a
Dead End

A recent whitepaper out of the Max Planck Institute for Economics, From Bureaucratic Tech Transfer to Entrepreneurial Tech Commercialization, discusses attributes of a successful entrepreneurially-based technology commercialization program. The University of Utah's young program is presented as a model of success in this type of establishment.

University of Utah's program has seen more than 60 spinouts over the last three years that have had an amazing 94% survival rate. They are part of a new trend that is replacing the current bureaucratic mechanism that creates bottlenecks in translation to a bottom-up entrepreneurial approach.

According to Dr. Henry Etzkowitz in his recent book The Triple Helix: University-Industry-Government Innovation in Action, few university technology transfer programs are financially successful, despite media reports that might indicate otherwise. Etzkowitz's research shows that the median TTO actually loses money and probably more than they are likely to admit to. There are a handful of power-house universities (MIT, Stanford, etc) that consistently generate profits, but most are floundering and now subject to decreased funding and higher expectations.

In addition to the positive financial results entrepreneurial commercialization programs are achieving, there is also a measurable increase in satisfaction by faculty and researchers as they see their research efforts come to fruition.

The authors of this whitepaper, Norris Krueger from Max Planck, Brian Cummings from University of Utah, and Steven Nichols from the University of Texas, count five key elements critical to the success of Utah's program: leadership, understanding and managing context, changing culture, engaging ecosystem and leadership in process.

University of Utah was fortunate when Governor John Huntsman came into office. He is a technology savvy and technology friendly leader who has dedicated a state budget surplus to fund a collaborative research center and hire "high value" research faculty. Equally dedicated to technology commercialization, University of Utah President Michael Young appointed a tech savvy business school dean into the entrepreneurial process and hired a new Director of Technology Commercialization. These executives serve as critical proponents within the Utah program strategy. It is through their combined visible leadership, unified clarity of vision and engagement of all necessary stakeholders that has helped Utah realize the success of this new technology commercialization program.

While the other factors are equally important, for purposes of this discussion, we will focus on the leadership aspect. Without adequate leadership, innovation cannot be effectively translated. A recent AUTM study showed that approximately 70% of intellectual property generated by universities goes unutilized and that statistic reflects the stagnation of only the IP that is disclosed. With that many innovations languishing, it is not surprising that many researchers withhold disclosures because it is seen as a waste of time.

This statistic reflects a disturbing reality at many universities in the U.S. today. One must ask what risks TTOs are willing to take. There is a risk of striking a less-than-optimal licensing deal, a risk of spending TTO funds and achieving no return on investment or the risk of simply doing nothing at all and leaving socially beneficial and potentially profitable IP untapped.

But as the Utah model suggests, the amount left fallow could be decreased if innovators are allowed to guide their IP through the process or are empowered to seek other licensors or partners. In a recent case profiled at IPAdvocate.org, Dr. Galen Suppes from the University of Missouri (MU) is involved in litigation with his school specifically because of this issue. Suppes was frustrated with the inaction of MU's TTO and sought to license his innovations himself to generate the much-needed funds for his ongoing green-energy research. However, in doing so his actions spurred MU to invest money in a lawsuit against its innovator rather than working with him within its own system.

In the case of the billion-dollar optical pharmaceutical treatment Restasis®, the University of Georgia (UGA) inventor/researcher Dr. Renee Kaswan had negotiated a licensing deal with Allergan on behalf of UGA that could have earned the school over $300 million in licensing royalties. However, once the FDA approved the drug, UGA went behind the back of its faculty member and re-negotiated the deal, a fumble that has cost the school over $220 million to date.

Krueger and his co-writers state accurately that technology commercialization begins and ends with leadership. But many university leaders do not seem to be actively engaged in or truly understand the arduous process that is commercialization. They are hired to get results and in the world of tech transfer, these do not come overnight. They do not come without investment, passion, professionalism and ethical transparent actions on the part of those entrusted with university intellectual property.

Often, too many tech transfer organizations are pinioned by university bureaucracy. TTOs become fixated on administrative tasks and aggressive patent protection rather than cultivating an environment where innovation and inventors can flourish. TTO staff lack understanding of the research process and fail to utilize the subject matter expertise innovators can bring to commercializing their inventions if allowed to participate in the process. Ironically, this directly affects the TTO's success in bringing university innovations to market. Unfortunately, without researcher involvement throughout the process, the bureaucratic mechanism and its inability to effectively commercialize IP perpetuates counter-productive activities. What the University of Utah has shown clearly is that a mindset change is mandatory to realize "ROI" (Return on Innovation) in the arena of technology commercialization.

Sitting behind a desk in a technology transfer office or simply attending the latest webinar for skills training does not make one an expert technology commercialization professional The stakes are high and a professional will have to establish a track record that can build credibility with stakeholders if they are to manage intellectual property effectively and transparently. Becoming a professional in this field requires dedication, enthusiasm and a focus on the innovator because without engaged inventors, there will be nothing to commercialize.

Institutions truly dedicated to the best interests of their university, faculty and students will require their technology transfer operations to be conducted with complete and utter transparency and establish metrics and other performance measures that examine more than dollars and cents - that are both qualitative and quantitative. These measures should assess and report the responsiveness of TTO staff, the thorough evaluation of invention disclosures and subsequent feedback to faculty that demonstrates the effectiveness of their licensing and commercialization efforts. Findings should be made accessible to the public, faculty, students, stakeholders and other interested parties.

In conclusion, universities who do not operate under best practices will experience less innovation out of their schools and a weakening of their institutional brand. While questionable and ineffective practices still continue today, a movement to establish standardized national guidelines could address these systemic flaws. Many TTOs don't practice meaningful performance analysis because it would expose mismanagement. With administrative pressure bearing down as the economy continues to spiral, covering up failure is more critical than changing for the better. Unfortunately, this culture of incompetence in technology transfer continues to thrive in spite of proven success models that could be adopted.

Successful programs such as that of the University of Utah, Stanford and a few other schools operating under best practices will continue to be a rare breed until those TTOs that are less successful fess up or are found out. The Planck whitepaper closes with Gary Kawasaki's 11th commandment "Always Be a Mensch". Kawasaki intended his guideline for entrepreneurs, but being "someone who does the right thing and for the right reasons" applies to university technology commercialization programs just as aptly.



Comments : 0 - Last Post : Jul 30, 2009 11:34 AM by: IP Advocate
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