AUTM has taken a very public stand against the Kauffman Foundation’s missive against U.S. TTOs in the Harvard Business Review. (See this article.) In an editorial published in Business Week, AUTM President Arundeep S. Pradhan, associate vice president for technology transfer and business development at Oregon Health & Science University in Portland, urges policymakers to keep intact the Bayh-Dole Act and support the current system used to commercialize federally funded academic research. Citing the recent study by the Biotechnology Industry Organization, Pradhan recounts the economic benefits of university patent licensing from 1996 to 2007: a $187 billion impact on U.S. gross domestic product, a $457 billion impact on U.S. gross industrial output, and 279,000 new jobs created as a result of university inventions. “Just as important, however, are the stories behind those numbers,” he writes. “Innovations originating in university labs and transferred to industry for development and distribution have improved the quality of life for people across the U.S. and around the world.” Examples include the hepatitis B vaccine, the prostate-specific antigen test, Google, the Honeycrisp apple, and FluMist.
Critics of the Bayh-Dole Act postulate that universities and TTOs are inefficient obstacles to the formation of start-up companies. In reality, American universities create more than two start-ups each working day, according to AUTM’s new licensing survey. Such start-ups have longer life spans and raise more capital than non-university affiliated start-ups. In addition, technology licensing offices obtain patent protection and are rapidly implementing programs that include entrepreneurial training, product proof of concept support, and seed stage or gap funding. “If universities did not undertake these financial risks, the number of patents, licenses, and start-up companies emanating from academic research would drop off dramatically,” Pradhan writes.
In the Harvard piece, Kauffman leadership claims “technology licensing offices are underperforming,” he adds. The example they provide is that “although funding from [NIH] has mounted over the years … the output in terms of new FDA-approved drugs has been falling.” There is no correlation between NIH-funded basic university research and the FDA approval process, Pradhan points out. The drug approval process is the responsibility of industry and takes place well after the technology is licensed. “To suggest a connection between technology transfer performance and the rate of FDA approvals indicates a lack of understanding of the complex dynamics at play and the role of university technology transfer offices,” he writes. Moreover, the “free agent” system advocated by Kauffman would create serious conflict of interest and personal benefit issues and potentially generate unrelated business income for the agent,” he adds, noting that historical analysis shows that neither inventor ownership nor “free agency” have succeeded. “A university’s mission is to serve its faculty,” Pradhan points out. “It would be inappropriate for the university to handle technology from outside inventors.”
Other than a few faculty members who report issues with their respective institutions, there is no evidence that university TTOs are doing a poor job, he maintains. “The true rate-limiting factors in entrepreneurship and commercialization are threefold: 1) the significant gap between the nature of research funded by the federal government and the product development needed to obtain private investment; 2) the challenge of finding early-stage venture funding and experienced startup company management; and 3) competing priorities and intensive time commitments of faculty related to writing competitive grants, securing tenure, publishing, and teaching,” Pradhan writes. “With that in mind, it is clear that the critics again demonstrate a significant misunderstanding of the primary mission of universities and the nature of faculty’s interest in commercialization and entrepreneurship. If we really want to take the next step in spurring technology-based economic development, let us identify where the real stumbling blocks are and concentrate effort and resources in addressing them rather than opining without data.”
Source: Business Week