Much more than patents

Offices for the transfer of technology at leading universities expand their role and strengthen cooperation with companies

SEE-MING LEE / WIKICOMMONSHarvard Medical School building: collaboration in the search for new drugsSEE-MING LEE / WIKICOMMONS

In the last six years, Harvard University has improved its results for the transfer of technology. Previously, these were not a brilliant indication of the performance of the leader on various international lists of higher education institutions. The number of invention disclosures rose from 180 in 2006 to 351 in 2011. Invention disclosures are documents with descriptions of research results. They are used to evaluate the possibility of protecting these results by means of intellectual property rights. In the same period, the number of patents granted by the US Patent and Trademark Office/USPTO went up from 35 to 60, while the number of licensed technologies went up from 11 to 45. This change was triggered by the reform of the structure and practices of Harvard University’s Office of Technology Development (OTD), focused on increasing the cooperation between the university and the private sector. It is no coincidence that the number of agreements between Harvard University and companies involved in so-called sponsored research has increased from 12 to 75. Sponsored research is a type of research in which companies provide funds for research work conducted at university laboratories, in exchange for which they are granted the licenses for the results of this work. The amount invested in these agreements totaled US$ 37.2 million in 2011, four times more than the 2006 total. The companies that have recently entered into strategic partnerships with Harvard University include such leading corporations as Novartis, which is partnering with Lee Rubin, from Harvard’s Stem Cell Institute, to develop stem cell-based pharmaceutical products.

Harvard University’s actions are an example of a phenomenon that has been seen at university technological transfer offices, and not only at those of world-class universities. In addition to conducting routine activities such as identifying discoveries with economic potential and protecting them with patents, these offices are also involved in other activities, such as fostering long-term research partnerships between companies and laboratories, helping establish start-up technology companies, attracting private investors to fund start-ups, providing consulting services to industries by its researchers, and encouraging entrepreneurship among undergraduate students. “Experience has shown that one can achieve very positive results when companies and universities engage in partnerships – in spite of their cultural differences – in which both sides stand to gain,” says Todd Sherer, president of the Association of University Technology Managers (AUTM), an organization comprised of more than 3,500 technology transfer professionals linked to 350 universities, research institutions and hospitals from several countries. The association provides training programs and support for the mechanisms of  the transfer of technology.

The changes at Harvard were led by Isaac Kohlberg, the head of the OTD since 2005. After working at Israel’s University of Tel-Aviv, where he founded a for-profit company to sell researchers’ patents, Kohlberg went to New York University in the 1990s to help organize an active patent licensing office. At Harvard, he merged two existing offices, increased the staff from 12 to 35 people and renamed the former technology licensing agents as “business development directors.” One of his outstanding achievements was the creation of the Technology Development Accelerator Fund, funded by private donors. Its aim is to drive the development of technologies that are still at an embryonic stage and facilitate their licensing and marketing. The Fund provides Harvard’s scientists with the resources needed to advance the development of research at the stage following a discovery, but before any actual sales, such as experiments to generate proof of concept or practical models to test the discoveries. “Proof of concept significantly broaden the possibility of attracting industries to license a promising technology,” says Curtis Keith, the Fund’s science director. Industry professionals participate in the Fund’s decision-making process, which has resulted in investments of US$ 5.2 million in 33 projects. Twelve projects have resulted in research partnerships with companies, as well as technology transfer licenses that have attracted more than US$ 10 million worth of partnerships for the university. A research project conducted by Harvard University professor Tobias Ritter on the addition of fluoride to medical drugs to make them more stable, powerful, and capable of penetrating the brain was partially funded by the Accelerator Fund. The project resulted in a company called SciFluor Life Sciences, based in Boston.

CARLOS FIORAVANTIUniversity of Oxford, in the United Kingdom: one company markets the intellectual property, provides consultants, and trains institutions from other countriesCARLOS FIORAVANTI

The University of California in Berkeley created its Technology Licensing Office in 1990, thanks to the Bayh-Dole Law of 1980, which granted American research institutions the right to patent discoveries funded by federal government research funds and to license them to companies. In the beginning, the structure of the Office separated work related to intellectual property protection from work related to the search for private partners willing to participate in research projects at the university. In 2004, the sponsored projects office merged with the technology licensing office to become the Office of Intellectual Property and Industry Research Alliances/IPIRA. According to Michael Cohen, a specialist on licensing and start-up companies at IPIRA, the Office currently focuses not only on supporting researchers but also on establishing long-term, multiple relationships with companies. In 2009, Berkeley signed 97 sponsored research agreements with the private sector, 25% more than in 2008. IPIRA’s aim is to attract companies of all types to Berkeley’s 13 research centers that set up programs to interact with the private sector. An example is Berkeley’s Center for the Built Environment, where technological research is conducted to improve environmental quality and energy efficiency in construction work. More than 40 engineering and architecture firms have joined the Center. As a result, they have the right to influence the choice of short and long-term lines of research. In addition, they have access to data and research projects. The Impact research center, which focuses on computer sciences and modeling, provides the Center’s member companies with access to the work of recent graduates “with multi-disciplinary education and the skills required by industry.” The companies also have priority in relation to intellectual property licensing agreements.

The model of the University of Oxford in the UK has two unique characteristics: the university created a company to deal with this issue and to offer its expertise – in the form of services and counseling – to universities and companies from various countries. Last year, Oxford invested £ 2.5 million in the company, named Isis Innovation. The return on this investment came to £ 4 billion, from royalties and from the sale of shareholdings in companies. Isis Innovation works on three fronts, one of which is the marketing the intellectual property generated by the university. Isis registers one patent a week, on average. The company currently has approximately 400 patents and a portfolio of 200 technology marketing licenses under management. “The researchers have the ideas and technology transfer does not happen without them,” says Tom Hockaday, a director of Isis Innovation. “Our role is to help the researchers and remind the university of the benefits this can provide to society.” The second front is related to offering consulting services by Oxford researchers to companies and government entities. The third front is dedicated to helping institutions from 30 countries market their inventions. The university has recently signed agreements with research institutions from Russia and has opened an office in Madrid’s science complex to provide advice on market technologies.


An additional factor that drives technology transfer and partnerships with industry is the funding crisis currently faced by research universities. Government funding and donations from the business community have dwindled since 2008, when the global economic crisis began. “Our major concern in relation to the economic crisis is its impact on federal government funding of research,” says Todd Sherer, from AUTM. “The level of federal government investments drives the pace of inventions at universities, hospitals, and research institutions. As the number of inventions increases, so does the number of patents, licenses, start-ups and jobs.” According to a study conducted by the AUTM, its members received proceeds in the amount of US$ 2.4 billion from technology licenses in fiscal year 2010. This figure is 3% higher than the proceeds in 2009, but 30% lower than the US$ 3.4 billion attained in 2008. The interest is a two-way one. For companies, partnering with universities is a way of sharing research and development costs during times of economic crisis. Cost sharing has been a problem for pharmaceutical companies especially, as they always need to launch new drugs. According to a survey conducted by AUTM with member universities, the number of research projects sponsored by companies remained stable in 2009 and 2010, with investments totaling US$ 4 billion, while federal government funds went up from US$ 33 billion to US$ 39 billion.

In Brazil, the mission of finding strategic partnerships with companies is still at an early stage. The Innovation Agency at the University of São Paulo (USP) has only recently started to create initiatives to develop partnerships. “We are looking for sectors in the economy that need innovation and proposing organic partnerships,” says Vanderlei Salvador Bagnato, the agency’s director. In December 2011, the agency launched a program together with the Brazilian Textile Industry Association (Abit) to encourage collaboration between researchers from USP and companies. “Our textile industry is becoming less competitive,” says Bagnato. “A research study conducted by USP could help textile companies deal with the competition,” he adds. The agency is already focusing on other sectors – such as the electromechanical industry and the cosmetics industry. According to Bagnato, one of the difficulties faced by innovation agencies in Brazil is to find customers for their technologies. “We have to chase after the customers and show them how we can help them. We are a public university and, as such, one of our missions is to transform knowledge into benefits for society,” he says. Another concern voiced by USP’s agency is related to streamlining the agreements between universities and companies. “We have at least two hundred projects of this kind at the university and we have been able to make progress in cutting bureaucracy. The President of USP has ordered that the partnership process – after a company has shown that it has a practical interest in entering into an agreement with USP – cannot take more than 30 days,” says Bagnato.

JASON DORFMAN / CSAIL… gloves that can replace the mouse…JASON DORFMAN / CSAIL

In the case of the Innovation Agency at Paulista State University (Unesp), the effort to strengthen ties with companies has been based on rounds of discussions on technological interaction, which consists of meetings between researchers from the university and representatives from companies the researchers could partner with. “Even though this approach does not result in immediate partnerships, these rounds of discussion are important to show companies how we can help them and show researchers how they can interact with the private sector,” says Vanderlan Bolzani, director of the agency. The companies attending these meetings, which began in 2009, include such leading organizations as Natura, Whirlpool, Cristália, AstraZeneca, Biolab, Sabesp and Sadia. Brazilian universities are renowned for their scientific production, says Vanderlan, but there are still some lingering difficulties in applying this knowledge to projects of interest to the industrial sector. Moreover, it has not been easy to attract companies to invest in basic research that can result in product development at a later stage. “Although the Innovation Law was enacted to speed up the partnerships between universities and companies, difficulties of a bureaucratic nature persist,” he states. In the hope of expanding this interaction, the UNESP agency plans to launch a file with names of researchers recognized by the agency as having the skills to enter into partnerships with industries. “Our expectation is that many researchers that have not been referred to yet will take the initiative to sign up,” he says. The Unesp Innovation Agency was created in 2007 and regulated in 2009. In the last two years, the agency filed 133 patents, signed 53 innovation agreements with companies, and granted 2 technology licenses – one of which went to an American company.

The idea of combining intellectual property protection and prospecting for partnerships with companies is new in Brazil, says Roberto de Alencar Lotufo, director of the Inova Unicamp innovation center at the State University of Campinas. “Our agency was created in 2003, and encompasses three activities that take place under separate departments at many other universities,” says Lotufo, who is member of the Association of University Technology Managers (AUTM). The major difference between Brazil and the United States, says Lotufo, is related to the ability and experience in innovation in the business community and in the academic community. “In Brazil, few companies invest in research and development. In the United States, on the other hand, companies focus much more on innovation than in Brazil, and the majority of the U.S.’s academic community is engaged in technological innovation. This makes a huge difference,” he states. From 1980 to 2005, Unicamp was the number two university in Brazil in terms of the number of filed patents. During that period, Unicamp filed 405 patents with the National Industrial Property Institute (INPI). Petrobras was the front runner, having filed 804 patents. From 2000 to 2011, Unicamp signed 53 technology license agreements, 10 of which were signed last year alone; these agreements have generated royalties totaling R$ 2 million since 2005. The agency helped more than 300 collaborative projects to materialize; these projects totaled R$ 65 million. The agency also maintains a relationship network, called Unicamp Ventures, comprised of business leaders, most of whom are Unicamp alumni and, founders of more than 220 companies with links to the university. “These entrepreneurs are crucial players in the region’s innovation-related ecosystem, as they provide opportunities, guidance, and funding, in their effort to support the creation of start-ups,” Lotufo adds. Since 2000, FAPESP has fostered the Program for the Support of Intellectual Property (Papi), created to encourage the protection of intellectual property and the licensing of rights on the results of the research projects funded by the Foundation. The program provides support to researchers and institutions; it is also focuses on improving Centers of Technological Innovation (NIT) at universities and research institutions in the State of São Paulo.

MIT / AURORA FLIGHT SCIENCESand airplanes that use less fuel: examples of research projects developed at MIT that resulted in new companies and established new industry standardsMIT / AURORA FLIGHT SCIENCES

Several institutions have pioneered the creation of new strategies for the transfer of technology, indcluding Stanford University. Located in Silicon Valley, Stanford has been the birthplace of start-ups since the 1950s. It was particularly successful in creating what is widely referred to as an “innovation ecosystem.” In the fiscal year ended in August 2011, Stanford’s proceeds from royalties totaled US$ 66.8 million – 98% of which came from technologies licensed several years ago. The 501 inventions submitted to Stanford – 60% of which were related to the physical sciences and 40% to life sciences – resulted in 101 licenses. At the end of 2011, Stanford held a shareholding interest in 109 companies resulting from technologies created at the institution. Proceeds from the sale of shareholding interest in five companies in the fiscal year totaled US$ 2.4 million. Stanford’s Office of Technology Licensing/OTL signed 1,100 agreements with non-profit and for profit institutions in 2011. Of these, 120 are research agreements sponsored by companies. Seed capital fund from the OTL provides funds of as much as US$ 25 thousand to fund prototypes and experiments in non-licensed technologies and 87 projects have already resorted to these funds.

In 1970, Stanford set up a Patent Office that would later become a reference for other institutions. It was organized by engineer Niels J. Reimers, hired in 1968 to strengthen government and corporate support of the university’s projects. He noticed that there was commercial interest in many of the inventions submitted by the Stanford researchers. However, even though the university had been establishing partnering agreements with companies since the 1950s, the return obtained from licensing  in the previous 15 years had been insignificant. He decided to study the models of other institutions, such as the offices of the universities under the California State University system, and of the Massachusetts Institute of Technology (MIT). He realized that those offices were not aligned with his objective, being staffed by lawyers primarily focused on protecting and patenting inventions, to only then think about showing the inventions to society. So Reimers proposed that a pilot program be implemented, which entailed setting up an office staffed by people responsible for marketing the inventions and who would have the autonomy to work towards achieving this goal. Legal work would be handed over to outsourced attorneys and the inventors would be granted certain benefits. When the pilot program was evaluated after one year, it had generated proceeds totaling US$ 55 thousand – more than 10 times the proceeds generated during the previous 15 years of licensing. In 1974, Reimers read an article in The New York Times describing a technique called gene splicing, created by professors Stanley Cohen, from Stanford, and Herbert Boyer, from the University of California. In 1981, he offered to grant licenses for the use of this technology. Seventy three companies showed interest. By 1997, when the patent had expired, these licenses had generated proceeds of US$ 30 million a year for Stanford.

STANFORD UNIVERSITYStanford University graduates in 2012: entrepreneurial environment helps create start-upsSTANFORD UNIVERSITY

This experience has influenced the philosophy of Stanford’s Patent Office. The office is focusing its efforts on a strategy referred to as home run, the ultimate goal of any baseball game. “We are more interested in broad-concept patents than patents of restricted interest,” wrote Katherine Ku, the director of the Stanford office, in a recently published article. The attempt to choose the most appropriate technology for licensing is a task whose results are difficult to envision. Stanford prepares an invention disclosure for every US$ 2.5 million spent on research funding. Only 32 of the currently licensed 600 technologies generate royalties of more than US$ 100 thousand. And only six such technologies have generated more than US$ 1 million. For each success case, such as Google (which generated proceeds of more than US$ 300 million for Stanford) there are many other technologies that ultimately cost more than the amount invested. One of Stanford’s strong points is the fostering of start-ups, companies developed based on the university’s intellectual property. However, on account of the crisis, only 8 start-ups were created in 2011, whereas there were 10 start-ups in 2010, 9 in 2009, and 14 in 2008.

Stanford gets more proceeds from royalties than from start-ups. However, the decision to foster start-ups is crucial to expand the transfer of technology to society. “Many of the big corporations are very pleased about their own research and development efforts. Most of our licensing activity is focused on small companies that cannot afford to spend a lot on R&D,” said Katherine Ku.

MIT is another institution with a strong tradition of transferring technology. This began in 1986, when Lita Nelsen, a chemical engineer who had graduated from MIT 20 years before, took over the Technology License Office (TLO) and changed its methods. Prior to working at the TLO, Lita had worked at biotechnology companies. Her first decision was to dismiss the lawyers and outsource their work. At present, the staff consists of 34 people: 10 managers and 8 technology transfer advisors. To qualify for the position of manager at TLO it is necessary to have a science background plus at least 10 years of experience working in industry. Ana Lopes, a 34-year old Brazilian, worked for four years as a technology transfer advisor. She was aware that she would not be promoted to a management position, the second step in the hierarchy. “I have a degree in astronomy and was interested in working in the field of technology transfer. But I lacked experience in industry,” she says. She left TLO in 2011 to work at E-Ink, an MIT spin-off that manufactures flexible digital paper.

WIKICOMMONSUniversity of California, at Berkeley: merger of patent and sponsored research officesWIKICOMMONS

TLO focuses on the relationship with industry in regard to issues related to licensing. Other offices focus on the cooperation with the industrial sector, such as the Office of Sponsored Programs (OSP) and the Industrial Liason Program (ILP). The innovative ecosystem is fed by many other initiatives. The Deshpande Center for Technological Innovation, created in 2002, funds research projects with technology transfer potential that are at the initial stage and offers entrepreneurs advisory services by industry experts. A competition organized by students awards US$ 100 thousand for the best business plan. Entrepreneurship clubs are spreading throughout all departments at MIT.

The MIT patent licensing office differs from that of Stanford and adopts the so-called “volume strategy.” As MIT deals with technologies related to physical sciences, it prefers to negotiate many agreements – to ensure that the related technology transfer goes to society – rather than only negotiate agreements with the best offers. According to Lita Nelsen, the volume strategy maximizes the participation of students and researchers in the technology transfer process and has made it possible to achieve home runs resulting in proceeds of US$ 3 million and 120 invention disclosures. One hundred technologies were licensed in 2010, generating proceeds of US$ 75 million and 600 invention disclosures per year. According to Lita, the ultimate objective is to make the technologies available to society. “Generating revenue is the result of this effort, but it isn’t the main objective,” she always says. Nearly 300 companies have already resulted from technologies created by MIT since 1984 – and 80% of these have survived. A recent example is the 3Gear Systems, a company that develops applications for a color glove and a system of algorithms that replaces the mouse.

More than 700 companies are financially committed to MIT, either by participating in pools in which companies fund research projects on a specific theme or by means of a so-called portfolio investment, whereby companies fund a group of research projects as part of a broader engagement. Many companies also invest in projects that will not get to the market any time soon. Schlumberger, for example, which provides oil and gas exploration technologies and services, has sponsored a research project related to MIT’s robotic fish, created to help inspect underwater exploration. A conceptual airplane model developed in partnership with Nasa promises to fly with only 30% of the fuel currently used by big airplanes. MIT’s Media Lab brings together companies and members of the academic community to work on interdisciplinary research related to digital media technology – and shares the results with all its members. MIT consortiums have played a key role in defining industry standards, such as those of the World Wide Web Consortium (W3C), which generated new protocols for web services, in an effort to produce a more collaborative version of the web. In the opinion of Todd Sherer, of AUTM, the experience of world-class universities can inspire change in other countries. He says that AUTM offers an exchange program to help build knowledge and capacity to transfer technology to partner countries. “However, we have to acknowledge that each country has different needs and opportunities, and that it frequently takes a long time to reap the benefits of technology transfer,” he adds.