A Contrarian Approach to Technology Transfer

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Universities seeking to commercialize the inventions of professors and graduate students typically travel a well-worn path. They get a patent, license it to a company, then hope the royalties will come rolling in.

Gerald Barnett, who has been working in technology transfer since 1990, says he has just one problem with that approach: For most inventions, it doesn't work.

Thousands of great ideas are produced by university researchers, but few of them get patented. Lucrative licenses are rarer still. Yet "it's the windfall that makes the [technology transfer] office seem successful," says Mr. Barnett, who now works at the University of California campus here.

The approach is flawed, he says, because it concentrates resources on trying to find a few winners, rather than using university technologies to build relationships with companies that might actually use those ideas. As a result, Mr. Barnett says, institutions "are missing a lot of opportunities to show people things."

He thinks he sees a better path. In his own iconoclastic style, he is trying to refashion the way universities get their inventions out of the laboratory and into the world.

He advocates an approach that he calls Second Generation Technology Transfer, or 2G, which involves using intellectual property as a tool for working with industry more, not less.

"I'd rather have a research relationship with 20 companies than a financial relationship with one," he says. He envisions companies continuing to pay for rights to use university inventions, but the licenses would be inexpensive, nonexclusive, and easy to execute.

Mr. Barnett, who had great success at the University of Washington at Seattle using such a model on software innovations in the 1990s, says the idea should work with other technologies as well. Since 2002, he has been director of the Office for Management of Intellectual Property here.

Mr. Barnett may be the only university director of technology transfer in the nation whose credentials include a Ph.D. in medieval literature. He and the institution's vice chancellor for research, Robert C. Miller, say they hope to turn Santa Cruz into a model for 2G.

Mr. Barnett points to his new employer, the University of California system, as evidence of weaknesses in the accepted patenting-and-licensing approach. In the 2002 fiscal year, the system was among the nation's top earners from technology transfer, with revenues of $88-million. But about 45 percent of that money came from just five inventions. Of the 5,000 inventions in the university's "active" portfolio, only about 950 generate income, and he suspects that most of those produced little more than an upfront licensing fee of $5,000 or $10,000.

If the university had employed a simple and inexpensive licensing system that wasn't predicated on inventions becoming products, he says, both the institution and industry could have benefited more.

'Academic Values'

Among Mr. Barnett's most ardent supporters is Mr. Miller, his former boss at Washington, who says 2G can fix some of the problems of technology transfer. The traditional approach, by focusing on exclusive agreements, results in fewer research relationships between academics and industry and lengthens the time it takes to get technology deployed, Mr. Miller says. It also creates political liabilities, fueling the impression that universities are more concerned with making money from their inventions than seeing them used. In addition, he says, it creates false expectations that licensing revenues can be a significant source of revenue for a university budget.

Mr. Barnett's critique of traditional technology transfer isn't focused solely on financial issues. He asserts that the traditional model, built around restricting rights with licenses and patents, is probably inappropriate for higher education. "A promise not to sue is not aligned with academic values," says Mr. Barnett, whose solution is to "build an environment for innovation that's more consistent with academic goals."

He hopes to test the approach soon on a new synthetic peptide invented and patented by Glenn Millhauser, a chemistry professor at Santa Cruz. The peptide could be useful to the pharmaceutical industry, but those companies will need to know how to manipulate the compound. Mr. Barnett says he is working on a commercialization program that would have many companies pay a licensing fee to the university. In return, they would receive a sample of the peptide, rights to experiment with it, and continuing advice from the professor's lab.

The license would not obligate the companies to develop a product with the peptide, and the university isn't counting on a big royalty windfall. The payoff for Santa Cruz would come from the continuing relationships between the companies and its laboratory. The goal, says Mr. Barnett, is "getting it into the hands of industry sooner."

Should one or more of the companies make a commercial product by using the peptide, they would be asked to pay an additional licensing fee. The amount of the fee would be relatively low, the terms of the license straightforward. If a company used the peptide to produce an important drug, the university might miss out on a big payoff down the road. Mr. Barnett says that is a loss the institution must be willing to bear, in return for the relationships it will develop.

"You've got to have a 'No regrets' policy," he says.

Mr. Miller says he is more than comfortable with Mr. Barnett's approach: "Everybody's afraid of letting the big one get away. That's the wrong attitude."

Mr. Miller came to Santa Cruz in 2002 and, shortly thereafter, recruited Mr. Barnett to join him. Nestled among stands of redwood trees on 2,000 acres that overlook the Pacific Ocean, Santa Cruz has some research strengths, in fields like astronomy, marine biology, nanotechnology, and optics. But with just $80-million in grants, it is hardly a research powerhouse.

That doesn't discourage Mr. Barnett, who sees the institution as a clean slate.

Mr. Barnett says the approach he is espousing rethinks the model for deploying intellectual property developed at the university: "IP is about the future. It's a relationship tool rather than strictly an investment tool." That means, he says, that institutions should value intellectual property as a teaching device, rather than as a legal means for excluding nonlicensees from using ideas. Universities have classrooms of students who pay tuition, he says, so why not think of this as finding ways to use intellectual property as the basis for getting paid to run "classrooms of companies"?

"What he's saying is not radical," says Arti K. Rai, a professor of law at Duke University, who has encountered Mr. Barnett and his ideas as part of her continuing research on technology transfer. But she says it seems unusual because while other institutions say they care more about transferring technology than about making money, most don't change their approach. The old model persists, Ms. Rai says, because "there's pressure to try to bring in revenue."

A Different Path

Mr. Barnett's unusual path into the profession may account for his nontraditional take. He doesn't have an M.B.A. or any formal business training. Nor is he a scientist.

Mr. Barnett was in the middle of attaining his Ph.D. in medieval literature at Washington, and teaching Beowulf to undergraduates, when he slid into this career, which has become for him a bit of a crusade.

It began, he says, when he started helping out in the computer center for the humanities and arts departments. He became known on campus for his programming skills, and before long, the technology-transfer office asked him to do research on strategies for commercializing software. Soon after, in 1990, he was hired to try out those strategies in a new division of the office called Software & Copyright Ventures.

The ideas behind 2G had their origins in that office, as experiments with inexpensive, nonexclusive licenses. The division brought in as much as $6-million a year from licenses and other commercialization strategies during Mr. Barnett's tenure, while earning a reputation for openness and collegiality in Seattle's booming software industry.

Now he is trying to persuade others in higher education that the ideas that worked in Washington could flourish elsewhere, as well.

Like many true believers, he writes frequently on his favorite topic and presents his ideas at conferences, most recently this month in San Antonio, at the annual meeting of the Association of University Technology Managers.

"He's evangelical without forcing people to be baptized," says John Fraser, director of technology transfer at Florida State University.

In the button-down world of technology transfer, Mr. Barnett often stands out for more than his ideas. Sporting a ponytail and sometimes-scruffy beard, at 45 he bears a striking resemblance to the comedian George Carlin.

Friends and colleagues say Mr. Barnett is imaginative, articulate, generous with his time, and truly passionate about finding ways to move innovation from the academy to society. True to his intellectual roots, he litters even casual discussions on technology transfer with quotes from Shakespeare, Bacon, and C.P. Snow.

Faculty members and his former colleagues at the University of Washington say Mr. Barnett brought a new level of creativity to the task of getting inventions into use. Ed Lazowska, a former chairman of the computer-science department at Washington, and a professor there since 1977, calls Mr. Barnett's approach "a breath of fresh air."

"That's what happens when you let an English major work in tech transfer," he says.

He says professors in his department appreciated Mr. Barnett's willingness to develop commercialization strategies for software ideas that weren't destined to be big moneymakers.

In traditional technology-transfer circles, some people would call that allowing inventions to slip "out the back door" but Mr. Barnett says that is too narrow a view.

Mr. Barnett sees intellectual property as "a tool to construct a teaching relationship," says Patrick L. Jones, a former colleague at Washington who is now director of the Office of Technology Transfer at the University of Arizona. "Done well, the approach results in getting more and more companies and organizations engaged with more and more research groups on campus." It also makes it easier for companies to start using the university innovations sooner, which increases the likelihood that an invention will be broadly adopted.

Companies and other outside organizations benefit, but it is not a corporate giveaway, or even altruism. After all, notes Mr. Jones, "it's not like we didn't make money."

The Other Side

The 2G idea is not without its skeptics. Much of what Mr. Barnett criticizes about traditional technology transfer is based on the idea that universities are licensing each patent to a single company, to the exclusion of all others. But exclusive licenses account for just 47 percent of university licenses, according to recent surveys. (Mr. Barnett notes that this statistic may understate the level of exclusive arrangements because it counts the overall number of licenses, and just a few inventions licensed nonexclusively to many companies could skew the percentage.)

In some fields, most notably the pharmaceutical industry, companies often insist on exclusive licenses. Without it, the companies maintain, they cannot risk investing in developing the patent.

Others also note that what Mr. Barnett is preaching is not necessarily a bad idea, but it requires institutions to redefine technology transfer in ways that might not be appropriate for a university.

Lita Nelsen, director of licensing at the Massachusetts Institute of Technology, says her institution finds it more appropriate to license inventions to companies and then let them assume responsibility for figuring out the commercial potential. Mr. Barnett's idea, using licenses to create forums in which researchers and companies collaborate, is "an additional business that a university might decide it wants to be in," she says. "It's not technology transfer. It's something different."

Mr. Barnett's ideas have had the most currency with technology-transfer officials in other countries, like Norway and Canada. The University of British Columbia has started a new service, called Flintbox, based in part on his approach. The service will offer technologies via a Web site to industries from a variety of sources. Standard licensing agreements will be accessible from the Web site.

"That ready-to-go form is what Gerald is all about," says Mr. Fraser, who, like Mr. Barnett, serves as an unpaid member of the FlintBox advisory board. If FlintBox succeeds, he says, it will help validate the 2G approach.

Serving the Humanities

At Santa Cruz, some of the greatest enthusiasm for Mr. Barnett comes from departments not traditionally associated with technology transfer. He has already established ties with the History of Consciousness Department with the hope of tapping into its expertise about cultural change. Mr. Barnett says that could support his approaches to licensing because it will help him understand what makes people decide to adapt to new ideas.

He has also talked to historians there who are assembling, for a class, an electronic archive of material on Pacific Rim perceptions and memories of World War II. Alan Christy, one of the historians, says that when he first heard Mr. Barnett's ideas for using those materials, he was thrilled.

Suggestions include selling the course to other institutions by subscription, licensing the archive materials to companies that specialize in war-zone tours, and developing a "virtual reality" tour in collaboration with a company like Apple.

Mr. Barnett "is someone who understands there is a great deal of potential in humanities, and I appreciate that," says Mr. Christy. He says he also appreciates that Mr. Barnett isn't merely pressing for a commercial strategy. "He's saying, Take a look at what we are producing and see what kind of bargaining strength it gives us."

For Mr. Barnett, the work is just a natural extension of 2G because the principles of technology transfer belong to all parts of the university. "I care about this as a humanist," he says. "To make it only a money relationship seems like such a shabby lack of imagination."