Writing on the blog Broken Symmetry, Michael F. Martin, senior attorney in the IP practice group at Drinker Biddle & Reath LLP in San Francisco, posts his response to the recent Office of Science and Technology Policy (OSTP) Request for Information (RFI) to work with tech transfer stakeholders, including universities, companies, federal research labs, entrepreneurs, investors, and nonprofits. The most important and difficult obstacle to commercializing university research is the financing gap between curious exploration and venture capital start-ups, Martin maintains. “Because new businesses provide the only sustainable mechanism for the United States to create jobs and wealth, this is also the most important and difficult problem for the United States to solve in its long-term bid to compete in the global economy,” he writes.
To increase the flow of inventions from universities and laboratories into commerce, academics must have more contact with — and more dependence upon — people in commerce, he argues. “Although intellectual property rights can and do facilitate multilateral agreements among universities, researchers, and industry, we must never forget this basic fact of nature,” Martin says. Given that fact, what is the biggest obstacle to increasing communication between universities and industry? In Martin’s view, an obsolete cultural norm impedes these relationships. “This obsolete cultural norm holds that academics must be independent from and disinterested in the consequences of their research,” he writes. “This norm is an ideal, which has never been realized in practice. But even as an ideal it is obsolete.”
Martin encourages the OSTP to bear in mind the extensive negative influence of this cultural norm in evaluating the merits of the various proposals to reform the technology transfer system. “What do all promising practices and successful models of technology transfer have in common?” he asks. “High-bandwidth feedback loops between the university and industry, promoted by fast, easy negotiations with technology transfer offices over intellectual property rights.” The most successful models seem to be subscription-based, nonexclusive licenses of IP, sometimes sweetened for the university with back-ended payments, such as warrants or reach-through royalties, Martin adds. If this model works, why does it not rule at most universities? In Martin’s view, university culture often forces faculty and students to choose between the institution and industry. “With limited administrative resources, inventors avoid the hassle either by ignoring their intellectual property rights or leaving to pursue them without interference by the university,” he writes.
The latter claim might sound incredible, Martin admits, but rough estimates show that universities realize only a fraction of the potential value of their research through IP licensing or spinoffs. Top research universities that employ thousands of researchers who publish thousands of papers file only a few hundred invention disclosures with their TTOs. The same universities spend billions on buildings and equipment, pay only modest salaries, and see only about 2% or 3% come back through licensing revenue. “Comparison against for-profit benchmarks suggests that this percentage could be doubled, tripled, or quadrupled with no additional capital expenditures,” he writes. “Public universities ought to pay attention to these numbers, given the impending credit crisis for many state and local governments.”
Perhaps only the federal government has the authority necessary to bring about large-scale radical changes, Martin suggests. “When universities are easy to deal with, investors will risk money, and entrepreneurs time, to complete the customer discovery work necessary to identify commercial opportunities,” he writes. “There is no one-size-fits-all answer to the question of how research can be commercialized. Rather, commercializing research is an iterative process of asking and answering that question over and over again.”
Source: Broken Symmetry