Thursday, 18 August 2016

Universities transferring technology: beacons of light, or groping in the dark?

"How universities can focus their patenting on technologies with the highest potential" is a recent post to Tech Transfer Central last week by David Schwartz. This post is triggered by an earlier item in Times Higher Education by Bruno Reynolds and Ben Oakley (from Isis Enterprise, Oxford University’s commercialization arm).  Reynolds and Oakley consider what is described as "... a common dilemma at tech transfer offices: whether to kill or pursue patent applications for technologies with unknown commercial potential".  Schwartz continues:
According to data from the Association of University Technology Managers (AUTM), the U.S. tech transfer industry generates over $2.7 billion each year in licensing revenue. However, Reynolds and Oakley point out, only half a percent of all currently active licenses generate more than $1 million a year ["only half a percent" may be viewed as a reflection of unreasonable expectations rather than as an indication that licensing practice is at fault.  For one thing, major potential licensees may purchase patents outright rather than take a licence in them.  Further, given that licensors have to recoup the cost of the licences they take, and that the same product or process may require taking licences to more than one patent -- and that licence revenue is likely to be generated for several years, the 0.5% figure may be good].

“There is clearly work to be done in building a logical, data-driven best practice into the everyday kill/keep decisions of university patent portfolio management,” say the authors. “There is also a need to keep sight of the additional factors that have to be considered by TTOs in their decision-making processes, such as delivering impact … and promoting entrepreneurship.” ["logical, data-driven best practice" is something that the methodology of patent analytics can help shape, but there is little to suggest that most university technology transfer officers even know what is on offer, let alone set aside the relatively small budgetary allocation that can assist the "data-driven" side of their profitable licensing equation].

A team of tech transfer executives at Columbia University recently published a study examining patent prosecution practices and outcomes from 25 major research institutions. The study finds that only between five and 20 percent of university patents are ever licensed [again, between 5 and 20% may be a pretty good figure -- especially if one considers the criteria adopted by research institutions in selecting their areas of research -- criteria that are generally not limited to commercial potential, as Reynolds and Oakley acknowledge].

... Here are Reynolds and Oakley’s tips for developing a strategy that favors patents with the highest commercial potential.
  • Integrated decision-making processes. Seek to license a university technology out to organizations that own related prior art; these parties have already demonstrated a vested interest in your innovation, and therefore make more promising potential licensing partners [sensible -- on the assumption that this also includes entities that don't own related prior art but take licences from others in order to pursue their interests. They are less likely to suffer from the "not invented here" syndrome].  
  • Portfolio analysis. Organizing your patent portfolio by academic department helps the TTO target resources to prevent opportunities from slipping through the cracks  [This is a good discussion topic. Prospective licensees don't organise their businesses by academic department, so the proposition that this will help prevent opportunities slipping through any cracks may need some support. One might have thought that, the more organisation by academic department, the more cracks exist between them ...]. In addition, sorting out the projects that have stalled or hit difficulties allows resources and budgets to be managed more effectively.  
  • Decide quickly. It’s important to collect market feedback early on, and to establish a policy of only going forward with strong opportunities. “It allows resources to be concentrated on stronger possibilities and avoids wasting the time of academics and TTO staff,” the authors say [feedback -- and any other relevant information -- may need to be collected more than once, since extraneous factors like manufacturing cost, environmental constraints, the availability of materials and the level of consumer interest and acceptance cannot be relied upon to remain constant over even a relatively short period of time].
There has been an increasingly sophisticated approach to university technology transfer since the pioneering days of WARF over 90 years ago. Yet somehow, despite the maturing of this practice, it has often been perceived as lagging behind its potential to deliver quality research to industry and quality earnings for academic institutions.  Making use of intellectual property analytics may assist in closing the gap between potential and realisation.

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