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1Technology transfer
A world-class process
This chapter provides an overview of the salient aspects of the technology transfer evolution, with particular emphasis on that from university to society. It also identifies the missing links between research and industry (human factor and impact finance), highlighting the role that TTOs play in closing this gap, and the drivers of the tech-transfer as an advanced process. It also elucidates reasons as to why the entire tech-transfer process centres on the âhuman factorâ, and advances the idea that job satisfaction can be a powerful motivator for this rare and highly qualified category of professionals (or TTMs), other than being in receipt of pay at full market rate and outstanding working conditions.
Technology transfer is defined by Cooksey âas the process to assist the successful transformation of good research into good businessâ (as cited in Isis Innovation Report 2010). This is supported by Roessner (2000) who also takes into account tech-transfer as âthe formal and informal movement of know-how, skills, technical knowledge or technology from one organizational setting to anotherâ (p. 23). He points out that because the process often faces unfavourable economic incentives and an inadequate supply of complementary services to translate new ideas into technological and economically viable innovations, its coordination among various stakeholders is a challenge. The technology transfer process, he continues, also requires access to a number of informational, financial and human resources. Both authors correctly identify the role of tech-transfer in closing the gap between research and business and the need for the process, once in place, to align stakeholders in a common mission and vision, and its implementation with institutional determination to embrace the draconian task of supporting researchers/inventors to move a protected idea (IP) successfully to the market (Roessner, 2000; Isis Innovation Report, 2010).
Technology transfer has become central in recent university evolution and has gained remarkable importance in terms of both the challenges and opportunities it presents to the life-long effort of individual inventors in finding suitable solutions to old and new problems for the progress of societies. Technology transfer is a new and complex process that works in an unconventional timeframe and at a high level of uncertainty. A successful technology transfer process requires strong research to generate a sound IP portfolio, a dedicated TTO as a meeting point of science and business, a team of highly skilled TTMs who understand the languages of science and business, and a surrounding entrepreneurial ecosystem capable of absorbing innovation and providing ancillary services. Additionally, to make this business viable, it is necessary that the resources involved are available at the right level and are managed efficiently.
In a historical note, Campinos (2018), on the occasion of the first EUIPO workshop, aptly pointed out that technology transfer is as old as human invention, since it has fuelled human development and innovation across the globe through the millennia, from the Bronze Age to the present. Over time, however, the concept has changed to become a political and corporate mantra, often surrounded by analytical ambiguities that affect research and theory (Bozeman, 2000).
For many centuries, after the first patent legislation in the Italian city of Venice in 1474 (Penrose & Zamora, 1974), European universities and those in the United States were not involved in bringing new inventions to society. Discoveries made by scientists through publicly funded universities became the property of the governments that provided the money, and consequently, those discoveries were published in the scientific literature rather than patented (Geuna & Nesta, 2006).
In the context of innovation theory and practice, the emergence of technology transfer as an explicit concept has been attributed to Vannevar Bush, a political advisor to US President Roosevelt, for US postwar economic recovery (as cited in Science: The Endless Frontier, 1945), for indicating clear linkages between public investment in research & development (R&D) and the commercialisation of technology. As emphasised by the former MIT President Jerome Wiesner (1979), thanks to Bushâs position, public investment in R&D continues and many of the most important US discoveries have since emerged. His recommendation to the US government, therefore, made it possible for important experiments undertaken (with very different purposes in mind) to continue and highly useful discoveries to result from certain elements of the research undertakings in basic science.
Publicly funded universities versus scientific inventions management
In the aftermath of the Second World War (WWII), there were very few universities in the USA that were engaged in the patenting and licensing of inventions, for two main reasons: first, most universities viewed this as an activity which diverted faculty attention from teaching and research; and, second, the problem of securing funding for research beyond the Federal Government persisted because there was no legislation to deal with the matter of patent licensing arising from public funding (Etzkowitz, Webster, Gebhardt, & Terra, 2000).
At the same time in Europe, legislation was also mostly lacking, and with the exception of Germany, in general, there was little interest across Europe in commercialising publicly funded research (Harhoff & Hoisl, 2007). Germanyâs Employeesâ Inventions Act of 1957, which gave more autonomy to academic inventors, made Germany one of the few countries in which the monetary compensation for inventors is not only determined by negotiations between employer and employee-inventor, but also by relatively precise legal provisions.
Due to this lack of legislation, for a long time, industry and academia operated in vastly different spheres, and even where pathways from public invention to private commercialisation existed (i.e. where private companies could enter into institutional patent agreements with universities), it was an uneasy process with rules varying between universities and government agencies.
Technology transfer evolution â from university to society
The Bayh Dole Act (also referred to as Public Law 96â517), enacted in the USA in 1980, was the historical event that propelled the current evolution of tech-transfer from universities to society, and it is tightly linked to the evolution of licensing in the USA, particularly the licensing of research by universities. From here onwards, the focus will be on this specific type of licensing.
The Bayh-Dole Act was therefore born to facilitate research spin-out by universities and to encourage economic benefit from patenting and licensing of university research results. The law implied that Federal Government research funding (which is about 65% of all research funding for US universities) could be reduced if such a technology transfer function was not established via the Technology Licensing Office (TLO).
Measuring the intent of the Act on technology transfer in the USA and beyond
Due to the lack of legislation before the Act, up until 1980 in the USA, only 30,000 patents accrued through federally funded research; around 1,200 were licensed, and even fewer had made it to the market. Fortunately, in the USA, an association of University Licensing Professionals, the Society of University Patent Administrators (SUPA), formed in 1974, was already in place; it was then renamed Association of University Technology Managers (AUTM) in 1989, which made it possible to bring about a convergence on best practices throughout the entire country through meetings, courses and publications based on annual surveys of patenting and licensing results which have emerged since its foundation. The intent of the Act was measured by an AUTM survey to mark the new millennium (Roessner, Bond, Okubo, & Planting, 2013). The survey results display, by almost any measure, the great economic growth that patenting and licensing has been yielding from university research in the USA up to the year 2000.
Table 1.1 summarises the results obtained from the 2000 AUTM survey.
After this consolidated success, the trends in the US Federal Government to encourage technology transfer from university to society included further legislations and policies to encourage strong technology transfer as an emerging profession within the US universities. They include (i) the creation of the Advanced Technology Program (ATP) and STTR (SBIR extension to include universities) Programs to encourage university/industry collaboration; (ii) the governmentâs large investments in support of the federal laboratory system (600 laboratories, 100,000 scientists, $25 billion) enabling the passing of the 1986 Fed Lab T/T Act, which required royalty sharing with inventors and also encouraged Cooperative Research Development Agreements (or CRADAs) to promote industry/laboratory collaborations; and (iii) tax policies with regard to stock options and capital gain rates have also encouraged university/industry collaboration (Brint, 2005).
Table 1.1 Results obtained from the 2000 AUTM survey
Similar initiatives were subsequently encouraged by the UK government, and, following the issue of the UK report âWhite Paper on the United Kingdomâs Competitivenessâ in 1998, many policy initiatives and government funding streams were established to stimulate cooperation between the researchers in universities and the countryâs industrial entrepreneurs. This cooperation significantly changed the way universities in the UK organise their technology transfer activities (Keay, 2007). Several prominent UK universities created separate companies to commercialise IP, especially innovations that were thought to have the potential to serve as foundations for spin-out companies (university companies or UNICOs). Nonetheless, the majority of universities also have internal TTOs that collaborate closely with the sponsored-research office and with the UNICOs to develop industry relationships. Further growth and development of TTOs have been stimulated more recently by direct government funding to universities for a third-stream activity via the Higher Education Innovation Fund (HEIF) in England and Wales and the Scottish Executive Expertise, Knowledge, and Innovation Transfer Programme (SEEKIT). Initially, HEIF financial support was awarded to institutions through competitive solicitation. Today, the government distributes HEIF funds directly to universities through a formula funding process which is based upon numerous criteria, including, but not limited to, institutional research capacity (quantity and quality) and TTO performance measures.
After almost four decades of proactive technology transfer practice in North America, and throughout the world, the licensing debate now focuses more on what is the best model of IP ownership for academic institutions and other public research organisations in the future. According to Young et al. (2007), in the USA, for example, the institution-owned model (except for the University of Wisconsin) prevails, while in Canada, the inventor-owned model is more popular in many institutions. Several countries in various parts of the world have also moved recently to the institution-owned model (Japan, Germany and the United Kingdom, for example). However, it seems that the inventor-owned model and the institution-owned model both have positive and negative attributes.
How technology transfer keeps evolving from university to society?
By definition, technology transfer is the process by which new innovations flow from the basic research bench to commercial entities and then to public use (Van Norman & Eisenkot, 2017). In order to succeed in this endeavour, research institutions clearly need to boost their capacities for transforming the ideas that stem from research into new and innovative technological applications that benefit society as a whole. A vibrant culture of technology and innovation is required to drive economic success sustained by research and to attract the best and most creative inventors, entrepreneurs, researchers, students and academics of excellence to work together. In order to thrive in innovation, universities need to be equally ambitious both in technology transfer and in achieving excellence in teaching and research. This means placing much greater emphasis on extracting value from IP.
Closing the gap between research and industry â the missing links
Today, the main challenge in the complex process of translating innovations into viable products/services is that the great majority of ideas, whether protected or not, never make it to the marketplace. The reasons for this are as complex and varied as the tech-transfer process itself; yet, the missing links essentially relate to gaps in two areas: the human factor, discussed in this chapter (see âTechnology transfer is a peopleâs businessâ), and impact funding for the early stages of POC, prototyping and demonstration â addressed later in Chapter 2.
Technology transfer involves an advanced process where TTOs are crucial in harnessing the potential of consolidating research and industry networks to develop technology transfer activities based on innovation-friendly procedures, and in promoting appropriate funding mechanisms to support each different stage of the process.
A world-class university TTO is an entrepreneurial office with a dedicated team aiming to establish new spin-out ventures or create licensing agreements based on protected IP and with a university funding mechanisms devoted to strengthen the technology transfer process.
TTOsâ requirements to consolidate research and industry networks
To support the university in the effort of consolidating research and industry networks, TTOsâ fundamental requirements are (1) excellency in managing the quality and quantity of research generated within the university, (2) capability to align research commercialisation with the institutionâs mission and (3) being adept at making a long-term commitment to the required institutional changes and to invest adequately in resources and people. Here, each requirement is considered in detail.
Managing the quality and quantity of research generated within the university
The most compelling forces that determine a university TTOâs characteristics and performance are the volume of research activity within the institution and the quality of the research results (Siegel, Waldman, Atwater, & Link, 2003). This is why world-class universities tend to make sure that all new inventions they develop are disclosed to their own TTO, as it will then coordinate the efforts of the inventors, patent attorneys and commercial partners throughout the technology transfer/commercialisation process.
For universities to secure research excellence, there is a need to stimulate outstanding scientists to codify their tacit knowledge into valuable patents, while the disclosure of ideas (from professors, researchers and students) is encouraged to flow from their different research departments, colleges and/or institutes to the universityâs own TTO, in order to build up an IP portfolio to manage and create technology transfer opportunities. Sourcing innovative ideas from academic research often entails observations and experiments during research activities, which, in turn, may lead to discoveries and inventions. An invention is any useful process, machine, composition of matter or any new or useful improvement of the same. Often, multiple researchers may have contributed to the invention.
Academic excellence is therefore a powerful source of innovation, and this excellence is often measured by the quantity and quality of publications. This principle has been enriched over time, when one also considers that universities have a mission to ensure that their discoveries, inventions and new science applications lead to useful products and services for the public, and that a timely emphasis on extracting relevant value from IP is necessary before it becomes obsolete (Cook, 2007).
Aligning research commercialisation with university mission
The success of technology transfer depends, as for any deal, on each party finding a benefit in the transaction (IPIC, 2017). The need to share the benefits is the reason why IP is fundamental to technology transfer. Whatever the route followed for technology transfer, the rules and agreements â who owns the IP or who can use the IP, and who pays what to whom regarding the IP â form the basis of any deal to ensure that each party benefits (Geuna & Nesta, 2006). However, there is a substantial difference between the approaches used to commercialise research depending on its source of creation. Academia, for example, tends to enc...
