Hello!

Thesis: Innovation is starting to be present in the technology transfer space, yet many universities have yet to realize successful strategies and/or know how to implement them into their model. By studying top universities, we can begin to discover what makes technology transfer offices successful and how other universities can recreate this success.

If you haven’t read my Intellectual Property Primer, I’d highly recommend it before reading this article as some of the terminology can be difficult to understand.

Credit The University of Utah

In my first technology transfer paper, I started with the thesis stating:

“Universities are an effective measure of intellectual property development, yet the current structure of technology transfer prevents many important innovations from exiting the university setting into the real world.”

If I’m going to explain how the technology transfer process within universities can be improved, I have to start by explaining the state of technology transfer now:

Technology Transfer: As it Currently Stands

As it exists today, in most universities, the technology transfer process exists mainly within a singular office, which I’m going to refer to as the Technology Transfer Office. This office is often referred to by many names: Office of Technology Licensing, Office of Technology Transfer, Office of Commercialization, Technology Venture Office, etc.

Most universities have one of these offices, but they exist in many different forms, and have many different people involved, including scientists, lawyers, analysts, licensing experts, industry professionals, and business managers.

These offices can be involved in a wide variety of different activities:

• Educating researchers and university staff on intellectual property commercialization principles and strategies
• Managing invention disclosures
• Assessing the commercial potential of new inventions
• Securing intellectual property rights (patents, trademarks, copyrights, etc.)
• Marketing available technologies to potential licensees and partner organizations
• Negotiating partnerships and license agreements

Alright, this doesn’t sound too clumsy, so why do I consider this process suboptimal?

Small, compounding structural changes can influence the success of a technology transfer program, and most universities don’t know that.

Most university technology transfer offices know who the best are. Within the last 5 years, there have been at least 4 official technology transfer “rankings” posted by institutes and journals: the Milken Institute, Reuters, George W. Bush Institute, and Heartland Forward.

These studies diagram what they deem as the “top 25” universities in detail and provide rankings for the rest.

During my internship at Penn State, I had the opportunity to read and develop a methodology to interpret each of these studies. In addition, I spoke with 19 different universities about their technology transfer structures.

University Best Practices: Learning from the Best

Problem #1: Some university technology transfer offices exist within the bounds of the university, but others exist as an external 3rd party office.

Internal technology transfer offices are the “traditional” model. They’re easier for the university to set up and don’t require massive structural changes.

But, this structure means the technology transfer process involves more bureaucracy in every step.

Solution: External technology transfer offices have been a newer innovation, where universities set up a 501(C)(3) organization to house the university technology transfer process.

The advantage of this external technology transfer office is that they can function more independently of the university - this is important because they could hold equity in startup companies (see commercialization commentary below).

The disadvantage of this external structure is that people may be less likely to work with an external technology transfer office.

Problem #2: Some technology transfer programs choose all inventions to win and others are more selective.

Many offices claim that they don’t choose which inventions win or lose, they pursue all of them and let the market decide.

In a perfect world, this system works and is the best way to go about this process.

Yet, as it currently stands, most, if not all, technology transfer offices are severely overworked and understaffed. So, given these unfortunate constraints, technology transfer staff have to be selective about what they use their time on.

In a selective process, the technology transfer assessment process is a more business-like approach where offices hire market analysts and consultants to figure out which technologies will win.

The advantages here are that technology transfer offices are able to assign more resources to promising technologies, but they might miss out on some winning technologies.

Problem #3: Some technology transfer programs utilize a cradle-to-grave method and others have separate offices that are specialized.

Traditional programs use a cradle-to-grave program where one person follows the technology through all steps of the technology transfer process (disclosure, assessment, protection, marketing, licensing, etc.).

They do this because it allows someone to become somewhat of an expert on the technology, but it has the downside that staff members have to be experts on all steps of the process.

So, newer models have started separating the duties, allowing people to become experts at a step in the process rather than a technology. This structure is more efficient and provides better results, but does require more staff and specialized training (a potential limiting factor).

Problem #4: Some universities are responsible for in-house commercialization and others rely on the ecosystem around the university for commercialization.

When universities want to build a startup company around a piece of intellectual property in return for a portion of the equity in the company, these startup companies need resources to grow and develop.

These resources include research and development grants, government support, venture capital funding, angel investors, etc.

Some universities, mainly those in extremely large metropolitan areas (San Francisco, New York, etc.), can rely on the ecosystem around them to provide commercialization resources.

In other places, universities don’t have adequate resources around them, so they are responsible for the commercialization support themselves.

With this, there are universities that are better than others, providing incubators, accelerators, mentorship programs, venture capital funding, pitch competitions etc.

Yet, many universities don’t provide many resources at all, leaving companies to bridge the valley of death themselves.

Credit National Institute of Standards and Technology

Problem #5: Some technology transfer offices have traditional responsibilities (as noted above) and others have more extended responsibilities.

Traditionally, the technology transfer office's responsibilities have only included those related to the invention, specifically disclosure, assessment, protection, marketing, and licensing. This makes the process more simple and efficient, yet limits the options an office has for licensing and commercialization.

Newer technology transfer office models also include the commercialization process, lowering the barriers to entry for new startup companies founded based on a piece of intellectual property. In addition, researchers and members of the community are more likely to work with your office.

However, this type of model requires more staff and more expertise.

Problem #6: Some technology transfer offices are self-funded and others rely on the university to provide funding.

Technology transfer office success mainly is determined by luck. Successful inventions, generating the technology transfer office revenue besides pharmaceuticals, are random. So, many university technology transfer offices cost the university money.

This means they aren’t able to efficiently act as separate entities from the university. Granted, this model does have its advantage as the offices are able to get more consistent funding, yet it’s a suboptimal mindset as these offices learn to rely on the university.

Many technology transfer offices that have successful licenses that generate solid revenue streams also operate on a self-funded model where they provide enough revenue for their operations, which enables them more flexibility and decision power as to where the funds are being directed.

However, in slower years, these offices can experience lower funding.

Problem #7: Some universities have overarching technology transfer authority and others have internalized this authority.

The key to change is identifying that you actually need to change. Once identified, then you actually have to make the change.

Consider university technology transfer offices: they know these studies exist, they know where they rank, and if they aren’t ranked well, maybe they understand they need to change.

I can’t help them understand that, but once they do, they have to be able to make that change. Yet, some universities' current structure can be limited in that capacity.

How? Many university technology transfer offices sit under another office in the university (generally the Office of the VP of Research)., which limits their ability to make abrupt and big changes.

Solution: “The Best” universities have technology transfer offices that don’t have overarching authority and work as equals with the other university authorities.

By having their own authority, these technology transfer offices have the potential to get more done more efficiently. Yet, it does have the disadvantage of less oversight and less direct access to pivotal offices within the university.

If universities know about these so-called “best” university structure models and changes, then why aren’t they implementing them?

1. Lack of Incentive to Change:

As many technology transfer programs aren’t self-funded, they don’t directly face the repercussions of their actions. If the programs rely on their successes for future funding, the incentive structures are more aligned, as the technology transfer office has more incentive to develop and protect successful technology.

In addition, the technology transfer office has more incentive to support startup companies around these technologies as company equity can be much more lucrative than licensing deals.

Currently, these offices have no incentive to change their current ways. Their jobs aren’t being impacted, and their current funding isn’t being impacted enough to make them change.

2. Lack of Authority to Change:

As most technology transfer offices have at least 1 level of direct oversight, they are generally subject to university bureaucracy to make large changes. So, if a technology transfer office wanted to make key structural changes, they wouldn’t be able to make the changes immediately even if they wanted to.

Furthermore, in a university process, convincing another party of integral structural changes that directly impact your office is very difficult, requiring many months, if not years of communication and discussion.

3. Lack of Expertise to Change:

Many times technology transfer employees have been there for years, if not decades. In addition, many come directly from the university, lacking outside business expertise. These employees may know that change is possible, but might not have the expertise required to change.

In addition, once they implement a major structural change (let’s say they adopt commercialization efforts), these employees may not have the adequate skills to sufficiently operate in this new environment.

To conclude, a research study by Baglieri, Baldi, and Tucci found that there currently exists 4 main technology transfer business models.

Descriptions of university strategic goals, key technology transfer activities, key stakeholders, engagement, monetization, and economic impact of each of the different business models are below:

While acknowledging the diversity in technology transfer models across universities, it is evident that a one-size-fits-all approach does not apply.

Nevertheless, each university has a large innovation potential.

Anywho, that’s all for today.

-Drew Jackson