FACT OR FICTION (PowerPoint download) by ert554898

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									   FACT OR FICTION
“Top-Ten” Quiz About Tech Transfer
          No Right Answers
          No Clear Answers
 Confession: There are no real answers to
  many of the questions we’ll talk about today.
 Tech Transfer isn’t a profit-driven enterprise.
 Neither is Tech Transfer only an
  academic/research-driven process.
 It lives between two worlds, and that creates
  ambiguity and some confusion.
                                             2
            Quiz Question 1
 What is the objective of technology transfer?
  A) Facilitate commercialization of university
     discoveries.

  B) Reward, retain and recruit faculty researchers.
  C) Forge closer ties with industry.
  D) Promote economic growth for our community.
  E) Generate income.

                                                  3
Answer to Question 1

 All objectives apply but . . .
   • Multi-faceted.
   • Can create tension with each other.
   • Can create conflicts with other University missions, e.g.:
       freedom to publish vs company sponsored research
        confidentiality; maximizing income vs industry relationships.




                                                                    4
            Quiz Question 2
 True or False: Technology Transfer is a
  barrier to dissemination of information and
  stifles free flow of ideas.




                                            5
   Before we get to the answer:

 Quiz Question 3:
  • True or False: There is no downside to the University
    other than lost royalty revenue if we just publish and
    not patent.




                                                             6
Answer to Question 3
 False – in some ways
  • Patenting protects our right to continue to research.
      First-to-file rule exists outside US and may be coming to the
       US soon.
      Despite common misconception, there is no “experimental
       use” right to practice someone else’s patent.

  • Patenting makes the technology more marketable –
    companies are more inclined to spend R&D dollars if
    patent protection exists. That’s because . . .



                                                                   7
Answer to Question 3 (continued)
  Patents list prior art and state claims that can be
   used commercially – easier to see commercial
   advantages through this than through a scientific
   publication.

  If inventions funded with Federal grant money,
   Bayh-Dole requires that University inform
   funding agency and give them notice of
   University’s intent to take title (or not).


                                                     8
     Return to Quiz Question 2
 True or False: Technology Transfer is a
  barrier to dissemination of information and
  stifles free flow of ideas.




                                            9
Answer to Question 2
 Rarely . . . and only when a particular
  technology is changing very fast:
  • Patenting is necessary and a good thing to get our
    research results used commercially.
  • Publication without patenting will cause some
    companies to commercialize our technology and keep
    all the economic benefit of our work.
  • Patenting and licensing are separate from publication
    process. It’s fine to publish – just need to get a US
    provisional application filed first.



                                                         10
Answer to Question 2
 BUT . . . there may be times when we choose to
  patent technology and the proprietary nature of a
  patent will ruin its commercial application.

 Primary example is certain software – where
  patent prosecution timelines are too long for how
  fast the field is changing . . . better to allow
  everyone to use as open source.




                                                  11
            Quiz Question 4

 The average length of time inside a
  university from invention disclosure to
  licensing of a patent is:
  A) 2-4 years.
  B) 4-6 years.
  C) 6-10 years.
  D) 10+ years.

                                            12
Answer to Question 4

 6-10 years. Physical science technologies are on
  the lower end of the range and life sciences are on
  the upper end.

 If the question were the length of time from
  invention disclosure to the first dollar of royalty
  revenue, the answer would be 10+ years.

 Technology transfer process takes time.



                                                        13
             Quiz Question 5
 Marketing technologies is best done by
  A) Inventor leads.
  B) Waiting for a company to call.
  C) Publishing a list of our available technologies
     (many web-based sites).
  D) Tailored marketing (“cold calls”) for each
     technology.
  E) Booths at conferences and trade shows.

                                                  14
Answer to Question 5
 It depends.

 All of these have proven successful to license
  technologies. These marketing “methods” are
  listed from highest frequency of success to lowest,
  based on available research.

 So the contacts that researchers have with their
  industry colleagues are the best way to get interest
  for a license.


                                                   15
            Quiz Question 6
 Royalty rates in university licensing are
  based on:
  A) The value of the IP and strength of the patent
     claims.
  B) The investment required to get the technology
     into a product and onto the market.
  C) The time it will take to get to market.
  D) How much other IP needs to be incorporated
     into the product.


                                                16
Answer to Question 6

 All of the above.
   • Negotiating a royalty rate for our technology is a
     complicated process.
   • This is where our not-for-profit mission helps us . . . we
     are not “all about the money” so, unlike industry, we
     will not let a licensing opportunity pass because we
     must make a certain profit on the technology.




                                                            17
Answer to Question 6 (continued)

 So how do we initially set royalty rates?
   • Tech transfer offices have gotten better at this over the
     past decade due to better available data.

   • At UR, we have access to databases that give royalty
     rates for comparable licenses that help us benchmark.

   • Challenge still remains because our technologies are
     often so early-stage that no similar benchmark exists.




                                                            18
           Quiz Question 7
 True or False: The University makes a lot
  of money in royalty revenues.




                                          19
Answer to Question 7
 It depends.
   • UR has been in the top 10 institutions in the country in
     total royalty revenues.

   • The biggest piece of royalty revenue is returned to
     inventors. Then departments, their schools, and the IP
     Pool divide the rest, so no one place sees large
     revenues.

   • Still, royalty revenue is among the most valuable that
     can be brought into a University because it falls right to
     the bottom line.

                                                            20
                              Return on Research Investment
             University                  FY 2005-2007           FY 2005-2007          % Income of
                                     Research Expenditure      License Income        Research Dollars
Emory [Emtriva monetization $540M]             1,076,735,918           621,128,963            57.686%
U of R                                        1,053,840,381           121,823,590             11.560%
MIT                                            3,562,600,000           144,924,482             4.068%
U Colorado                                     1,768,135,784            71,283,684             4.032%
Wash U.                                        2,793,192,603           101,487,126             3.633%
Case Western                                    917,600,574             30,362,986             3.309%
Harvard                                        1,877,429,996            61,240,241             3.262%
U. Chicago                                     1,068,059,726            30,824,111             2.886%
Carnegie Mellon                                 699,712,000             16,853,903             2.409%
Vanderbilt                                     1,163,544,184            22,215,206             1.909%
Dartmouth                                       543,731,416              6,704,873             1.233%
Penn                                           1,971,007,454            21,917,444             1.112%
Pitt                                           1,824,279,000            19,432,359             1.065%
Cornell                                        1,826,043,200            15,285,000             0.837%
Johns Hopkins                                  4,532,076,512            36,569,157             0.807%
Duke                                           1,803,537,206            14,552,013             0.807%
USC                                            1,278,000,000             7,107,915             0.556%



                                                                                             21
              Quiz Question 8
 Two parts
  • What percentage of the University’s issued patents are
    licensed?
      A) 20-30%
      B) 30-40%
      C) 40-50%
      D) Above 50%
  • How does this compare to percentage of patents held by
    companies that are used in products?
       Worse? Better? About the Same?


                                                        22
Answer to Question 8
 The University has licensed about 36% of our
  issued patents. This compares favorably to the
  average for companies in the for-profit world (at
  about 33%).
   • Needs to be slightly corrected for the fact that
     companies patent defensively.
   • No one has a crystal ball to know for sure what
     technologies will turn into products . . . let alone gold
     mines.



                                                             23
            Quiz Question 9
 The biggest impediment to forming a start-
  up company with University of Rochester
  technology is:
  A) Available financing.
  B) Entrepreneurial talent.
  C) Lack of available technology that is quick to
     market.
  D) Lack of support inside the University.


                                                 24
Answer to Question 9

 A and B. (I hope no one thinks D).

 Major impediment seems to be available funds to
  get the start-up off the ground.

 Starting a business is a hard thing. Published
  literature says that only 3-5% of all companies
  formed in the USA succeed (obviously, depends
  on how you define success).


                                                25
Answer to Question 9 (continued)
 We have improved our licensing terms to start-ups
  so that almost no cash needs to be paid under a
  license until there is revenue.
   • Exception for patent legal costs since we are out-of-
     pocket for those.
   • We will allow patent costs to be paid over time.

 We will continue to work with our community
  partners such as HTR and Excel to try to improve
  entrepreneurial talent and financing sources.


                                                             26
                       Caveat
 We offer fair licensing terms but . . .
 Tax laws (on not-for-profit institutions)
  restrict the terms any private university can
  offer to start-ups.
  • Prohibition on private inurement means we can’t appear
    to give preferentially favorable terms to one company
    over another.
  • We can’t use our not-for-profit tax status to advantage a
    for-profit company (e.g., use of space must be at fair
    market value).

                                                          27
            Quiz Question 10
 True or False: Licensing an invention
  creates a conflict of interest for the inventor.
 True or False: Forming a start-up if you are
  an inventor creates a conflict of interest.
 True or False: Conflicts of interest are bad
  things that can adversely affect the
  perception of your research by others.


                                               28
 Answer to Question 10
 If you do research for the company who licensed your
  technology, then being an inventor on a licensed
  patent creates a potential conflict of interest.
   • Possibility of receiving royalties may be viewed as
     influencing research.

 Owning equity in a start-up who has licensed your
  technology is a potential conflict of interest.
   • You are investing in your own technology.


                                                           29
Answer to Question 10 (continued)
 Conflicts of interest are NOT bad things.
  • Are often an inevitable consequence of
    commercializing research results.

  • Conflicts are OK – but they need to be
      Disclosed – that alone would have solved a lot of the recent
       scandals.
      Managed – level of management effort depends on seriousness
       of the conflict (e.g., significant financial conflict when human
       subject research is involved).



                                                                      30
Are there any Quiz Questions for us?




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