university technology transfer lita nelsen masterclass 13092018.pdfbuilding a tech transfer system...
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University Technology Transfer:Lessons from MIT
Lita Nelsen
Netherlands
September 2018
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Formal definition of “technology transfer”
• Purposeful transfer of the results of fundamental research from universities and research institutions into the economy via protection and out-licensing of intellectual property
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Purposes of University Technology Transfer
Research Invention (and IP)
Development Innovation
• New products and medicines
• Bring new technology into industry for economic competitiveness
• Encourage entrepreneurship for local and national economic development
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A short history of university technology transfer
• 1960-1980 Some patent licensing in US and UK universities; not widespread
• 1980: Bayh-Dole Act in US begins acceleration of tech transfer, and competence builds in tech transfer offices
• Early 1990’s: Many US universities acquire competence; emphasis on startups begin; UK government begins increased emphasis on technology transfer, particularly startups
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• Late 1990’s: Japan and Taiwan pass “Bayh-Dole-like” Acts.
Singapore, Hong Kong, Germany, Finland, Brazil, China, South Africa, and many other countries begin or strengthen their systems for technology transfer from their universities and research institutes.
• The present: Interest in technology transfer is global. Governments looking to technologies developed at their universities—and particularly to startups based on them--for economic development in the “Knowledge Economy” – Example: The Dutch Valorization Program of 2010
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The Tech Transfer Bargain
• University research leads to patentable inventions– but technology is unproven and high risk
– Patents can provide and incentive for investment
• University is willing to grant exclusive patent license to Company who will commit to the risk of developing the technology
• If development succeeds, the patent protects the Company from competitors
• Result: Public benefit—important new products,
economic development
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Patent protection is particularly critical for development of pharmaceuticals
• Development of a new therapeutic or vaccine product is a particularly high risk activity
– Time frames are long
– Financial investment is very high
– Clinical trials are very difficult
– Probability of failure is high
• Patent protection of the final product is necessary before companies (or biotech investors) will take the risk and make the investment
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Other truly innovative technologies requiring substantial investment also need patents to induce
that investmentExamples:• Medical Devices• Superconductors• High density batteries • Desalination technologies• Better solar panel materials• 3-Dimensional printing• Biofuel production• Public Key encryption--and many others
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What about royalty revenue from licensing and spinouts?
Statistics show:
Technology transfer is usually not a substantial source of revenue for the university
– And usually needs some governmental or other support for up to a decade or more before an office can be self-sustaining, with enough resources for growth
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FY 2015 AUTM Licensing Survey (U.S.)196 Universities, Research Hospitals, non-profit Research Institutes
$61 Billion in Research Expenditures
– 4.9 Billion industry-sponsored (8.0%)
Technology Licensing
• 68,000 invention disclosures
• 6,680 US patents issued
• 6,395 new licenses
• 1,012 new startups
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Financial Returns are Limited
• Licensing revenue (including realization of equity!) $2.5 Billion
From a research base of:$61 Billion
• Thus, Licensing revenue averages only 4.1% of research expenditures
(net after inventors’ shares = about 3% of research exp.)
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And Royalty income is highly skewed!
• 50% of the total licensing income came from only 6 % of the institutions (12 institutions in total!)
• And in most of those 12 institutions, greater than 80% of their high royalty revenue was attributable to a single technology
– When the winning patent expires, income drops precipitously
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Royalty Returns are small and skewed--But Societal Impact is Great
• More than 8000 new companies formed from US university intellectual property since Bayh-Dole Act
• Estimate over 3.6 million jobs in development and production of new products based on university licenses (AUTM economic study)
• Many new medicines developed based on patents from university research
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and
• A significant number of new startups have developed into large, successful companies (e.g. Google! from Stanford; Akamai and Cubist Pharm. from MIT)
• Biotech and Information Technology (IT) clusters in a number of cities with large research universities (Boston, San Francisco, San Diego, North Carolina, etc.)
– Majority of new biotech companies spin directly out of university research
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MIT Statistics
Campus: Fiscal Year 2017
• Students:
– Undergraduate: 4,547
– Graduate: 6,900
• Professors (all ranks): 1,047
• Research: $719 Million
– 64% Federal
– 18% Industrial ($133 Million)
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MIT Technology Licensing Office
• 800 new invention disclosures/year
• 100 new technology licenses or options/year
• Over 25 licensed startup companies/year
– Many, many others, not with MIT-owned IP
• Over 800 active licenses
• Over 500 licensed startup companies
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Strategy: do a lot!
The Volume Strategy
• Aim to maximize the number of technologies being developed
– Rather than try to pick a few “winners” and concentrate on them
• 100 licenses/year
–25+ startups/year
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Advantages of the “Volume Strategy”
• Maximizes participation of faculty and students in the technology transfer process
• Maximizes number of technologies invested in by companies and VC’s
• Maximizes probability of hitting a home run
• Technology is probably too early to be able to pick the winners!
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Large Company vs. Spinout?
Usually don’t have a choice:
• Very difficult to license “university stage” inventions to existing large companies!
– “Too early”
– Too risky
– Doesn’t fit into current product lines
– Too long development time (time to market)
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Spinouts provide the bridge to industrial production
• Government basic research grant
• University Research leading to invention (early stage)
• TLO Files Patent
• Formation of Spinout Company; License to Spinout
• Investor Funding of Spinout Company
• Spinout Company develops to Commercial Proof of Concept
• BigCo acquires Product Line (or Spinout Company.)
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Why is MIT able to do so much?
• LOTS of world-class technology—dependent on government support of basic research
• Good IP protection
• A robust “entrepreneurial ecosystem” advising and helping faculty and students to spin out companies
• Consistent Tech Transfer policies throughout the university
– Priority: “Impact, not Income”• An experienced Technology Licensing Office
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A pervasive entrepreneurial eco-system
• Well networked in a highly entrepreneurial geographical area with managers, capital, support services
• Many activities where the university, its students and faculty mix on a continuing basis with the business community
– Companies
– Venture capitalists
– Angel investors
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Example components of the MIT “entrepreneurial eco-system”
• Deshpande Center: research grants to projects “with startup potential”
• $100 K Student Business Plan Contest• Venture Mentoring Service• MIT Enterprise Forum• Martin Trust Entrepreneurship Center at Sloan
School of Mgmt.• Student Venture Capital and Entrepreneurship Clubs• And many others
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All of these “internal” components share one characteristic
• Active participation by volunteers from the local business and investment community
• We get to know them; they get to know us and our technology
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A final component of the entrepreneurial eco-system
• Role models!—a lot of them! • Students and faculty are continuously exposed to
people who have started companies—and to people who fund them– Many from within MIT
– Many more from the community
• Students graduate with a sense that “I can do it too”. Changes life-time expectations
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Building a tech transfer system is a long-term societal investment
• To bring the results of basic research to the public in the form of new products, new cures
• To enhance economic competitiveness of industry by incorporating new technology
• To build new industries based on new science and technology
• To build an entrepreneurial culture, bringing new companies, new jobs and new opportunities for a country’s people.
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Maximizing the Societal Benefits of Technology Transfer
Balancing:• Academic and Economic Priorities
– e.g. priority of rapid publication vs. financial benefit of secrecy
• Benefits of long term research vs. shorter term “product development”
• Financial benefit to the individual university vs. long term mission of discovery and dissemination of knowledge
• Now vs. the Future
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Requires a continuing thoughtful dialogue
Among:
• Academia
• Government
• Industry
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Thank you!
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