The Chronicle of Higher Education: Colloquy

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New approach to technology transfer

Author: Colloquy Moderator
Date: 03-05-04 14:40

A top expert on technology transfer says universities take the wrong approach to profiting from researchers' inventions. An article in this week's Chronicle discusses the views of Gerald Barnett, head of technology transfer at the University of California at Santa Cruz. Mr. Barnett says universities look for big windfalls from inventions when they should be using licenses to build long-term relationships with businesses. Are universities taking the wrong approach to profiting from inventions? Should they be looking for profits or relationships with business? Read more ...

Re: New approach to technology transfer

Author: Lesa Mitchell/Kauffman Fdntn
Date: 03-08-04 10:10

We have been doing research in this area and also agree that the philosphy needs to be tied to moving as much out the door as possible. For Universities lucky enough to be in locations with access to capital this is less of an issue than it is for the rest of the country.

Re: New approach to technology transfer

Author: (Name removed at author's request)
Date: 03-10-04 18:14

Strong ties between academic institutions and private enterprises are often mutually beneficial, no doubt. I also agree that while universities can generate a host of new patentable inventions, businesses (particularly those well funded by venture capital) can exploit and bring to market the most lucrative of these inventions. While the expertise is overlapping, the efforts should not be redundant; and Mr. Barnett seems particularly keen in perceiving that the roles should be thoughtfully negotiated and allocated.

But I have a few caveats (which perhaps Mr. Barnett has addressed in other fora). First, industry has certain innate goals that may conflict with academic goals, values, and needs. For one, more patenting tends to be the preferred practice of industry - naturally, as patent ownership confers particular rewards - and where universities might be eager to cede licenses to patentable materials, they also may spur industries' interest in, and drive to, seek patents far earlier than academics may desire.

One recent instance that comes to mind is the "gold rush" mentality that drove many (especially in industry but also, sadly, in academe) to seek patents of gene sequences, before any kind of commercial viability had been determined. Not only did that cramp academic advancement by removing patented sequences from researchers' hands, but it also hampered researchers seeking to publish data or findings involving those sequences. Both the wide use of fundamental research materials and the important publication of scientific advancement was impaired by the rush to patent. This is not a trend that should be driven by industry; and academics' interests will best be upheld by those institutions that retain the decisions in their grasp.

Further, patent licenses may enable academics to forge useful ties. But are they the best way to engage industry? Consider the debacle of the American auto industry in the 1980s: GM entered into a host of patent licensing arrangements with Japanese auto manufacturers. While initially very lucrative (thereby saving the skin of the flagging industry), the patents were quickly assimilated, "invented around," and essentially incorporated by the Japanese manufacturers in their work until the patents themselves were virtually useless. In the end, licensing was probably not the best way to go - it basically "gave away" patented material without getting enough value in return.

A better approach is often to allow the patent holder to take an equity position in the company that will exploit the patented material. This means both parties have a stake in the patent exploitation - which of course they already have in the shared revenue stream - but the exploiting company also has an incentive not to take the patent and run, as it were. For universities, it might be more expedient to enter a quick license and be done with these kinds of complicated relations. Moreover, some institutions will no doubt balk at taking equity positions in companies, seeing it as outside the scope of true academic affairs (much as some have taken issue with university involvement in "spinoffs" or quasi-institutional enterprises). But I think the alternative to licensing bears consideration as the best means of allowing an institution to benefit fully from its creative work product.

I thank Mr. Barnett for his thought-provoking views, and The Chronicle for bringing them to our attention.