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Unfortunately, those ideas might never realize their potential if they do not make it out of the lab and into the market.
Whether at universities or national research centers, technology transfer offices help bridge the gap between the lab bench and the marketplace.
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Their goals are to help researchers protect their intellectual property and find entrepreneurs or companies that can commercialize the technology.
If the office and researcher are successful, they have created a product that can improve people’s lives and businesses and make a little bit of money for the inventor, investors and their institution.
If they’re really successful, they could benefit from a windfall, such as the $30 million the University of Colorado will receive for licenses related to the use of Botox to treat bladder disorders.
How it works
The University of Colorado, Colorado State University, the University of Wyoming and Colorado School of Mines each have tech transfer programs. So do federal labs, such as the National Renewable Energy Laboratory.
While university offices have variations in how they are structured and how they split potential royalties, they share far more in common in how they work and their mission, according to Todd Headley, president of CSU Ventures, the technology transfer program for Colorado State.
Staff must understand the research being conducted at their university and understand the areas where its faculty members are strongest. They also must know industry trends and what kind of inventions might find a place in the market, Headley said.
“We spend a lot of time focusing on faculty and research, and spend a lot of time looking at industry and its needs,” he said.
Technology transfer offices have expertise in business development and intellectual property law that researchers lack, and if there is something they don’t know, they have connections to people with experience and knowledge of their fields, such as patent lawyers and serial entrepreneurs.
Those connections raise the chances a company will license a technology or a viable business will be created, said Tom Smerdon, the University of Colorado’s interim associate vice president for technology transfer.
“We want to ensure they can hit the ground running and they do have a chance for success,” Smerdon said.
One goal is to make the process as easy for researchers as possible, so they can get back to the lab to improve their discovery,, said Will Vaughan, director of CSM’s office of technology transfer.
“The professors are rightly focused on cutting-edge science. They shouldn’t have to focus on these things, and most just throw up their hands and say, ‘Deal with it,'” Vaughan said. “Their passion is research.”
Working with research-minded faculty can require some outreach and education.
“We’re working to change the entrepreneurial culture here, to help professors understand you can do patents and you can do research,” Vaughan said.
That can mean hosting events on campus to let faculty and students know the office exists and what it does, said Davona Douglass, head of UW’s Research Products Center, which runs its university’s tech transfer office.
Unlike other tech transfer offices, the Research Products Center also is charged with helping independent inventors, either individuals or businesses. The center works with about 100 inventors a year who are not part of the University of Wyoming system, Douglass said.
The center’s dual role is an effort to get a greater impact from Wyoming’s relative lack of resources. Wyoming residents are just as inventive as Coloradans, but the state lacks IP lawyers or a concentration of entrepreneurs, she said.
All the offices have websites with in-depth and clear explanations of how the process works.
Researchers do need to know that not all inventions receive patents, can be licensed to an existing company or can be the building block of a startup.
That’s why, to launch companies or license a technology, the offices have to be proactive, Headley said.
“The hope is you can make the funnel bigger at the top, so you need to get more people in the door,” he said.
Owning the idea
The commercialization process begins outside the office, when a researcher comes up with an
invention that might have commercial promise.
The researcher’s first step is to make contact with the technology transfer office.
The initial contact could be through an email or quick chat in which the researcher tells a staff member a little bit about her idea and the staff member outlines how the process will work.
Soon the researcher will need to disclose more details about her invention, the process that led to its creation, where the money for her research came from and what commercial need she sees it filling.
According to the most recently available data from the offices, CU had 226 disclosures from researchers across its campuses in the most recent fiscal year. CU received 117 disclosures, while UW had 33 disclosures from inventors affiliated with the university and 95 disclosures from independent researchers. Colorado School of Mines did not provide data in time for publication.
It’s at that step the technology transfer department begins its work in earnest and tries to find answers to the key questions that will determine if the invention has a chance of making it.
One of the first is whether the technology could get a patent. That means the invention has to be new, can’t be obvious and is useful.
Meeting those criteria can be pretty hard, and it can take a few years before the U.S. Patent and Trademark Office makes a ruling. That is why one of the major roles of tech transfer offices is to guide inventors through potential intellectual-property minefields.
CU and CSU have specialists on their staffs who are experts on IP issues. They and smaller schools rely on outside counsel specializing in intellectual-property law to deal with thornier issues.
They also provide advice to researchers to increase their odds of receiving a patent. CU’s website emphasizes the importance of lab notebooks, which can help establish when a discovery was made. CSM’s explains when researchers can share their results with peers.
A key statistic provided by CSU Ventures underscores how hard the patent process can be: Over the past five years, the office has submitted 710 patent applications; the Patent and Trademark Office has issued 56 patents.
Building a business
While the IP specialists are at work, the staff also looks at the commercial prospects.
A lot of the inventions are in very raw form, and there are a lot of reasons they might not be viable, Headley said. Some are technical matters. The invention might work in the lab, but not be scalable to industrial size. Or it could be too expensive to produce or use.
Someone also has to want it, which is why the offices have to cultivate contacts and market technologies available for licensing.
Company cofounders or licensees have to be the right fit. The researcher also has to decide if she wants to license the technology and prioritize their academic work or take what can be the much harder step of launching a company.
“What we’re really trying to do is find the best home for a technology, and usually it’s a very obvious decision,” Headley said about the startup or license question. As for the proper match, that can make the difference between success or failure.
“That’s one of the absolutely key components of this, and that’s one of the areas we work the hardest.”
In Colorado, researchers get help from the Innovation Center of the Rockies, formerly the Boulder Innovation Center. The center works with CU, CSU, CSM and the University of Denver.
The ICR has a network of about 1,400 potential advisers, investors or founders, said Tim Bour, its head. It also has program managers who can help connect inventors with the right people.
In Wyoming, the Research Product Center might have even closer ties to industry. It was launched in 1999, as a collaborative effort between the university and the Wyoming Business Council, a state economic development organization, Douglass said. It also maintains close ties with the Wyoming Business Network.
As might be expected, the amount of experience inventors have varies, as do their needs.
“There are some faculty members that have started companies before, and there are some members who have never thought about it before. It totally spans the range,” Bour said. “We adapt the process to the specific interests of the faculty member.”
If they want to form a company, finding cofounders and potential investors is essential. In fact, it might be the hardest part.
“I would say that we get one or two companies per year, and I would hope for more,” Bour said. “Generally speaking, the rate of invention far outpaces the rate of commercialization.”
The numbers from the tech transfer office are a bit better than that, but not dramatically so. CU helped launch 10 startup companies and CSU helped launch six. UW’s “representative list” of spin-outs has seven companies, Douglass said.
Starting a company is one thing. Making it successful is another.
The outcomes vary widely, and the spinoffs from the University of Colorado system show just how different the outcomes can be.
From 1994 through September 2011, the last available report, 118 companies have been formed based on CU intellectual property. In that time, 23 have ceased operations, and many are small companies not far beyond the research stage.
Seven have become public companies, such as Broomfield-based ARCA Biopharma, and five of those have been acquired by larger public companies, such as ColorLink, which was bought by RealD. Others, including OPXBIO, have received significant amounts of venture capital and strategic investment.
The results uncover some of the unavoidable truths about technology transfer, Smerdon said. It’s hard, takes a lot of time and only a few companies or licenses hit it big.
“Some view university technology transfer as a potential source of significant revenue for universities … but the timeline from invention disclosure to commercial product and royalties can be quite long,” Smerdon said.
“It’s unrealistic to look at technology transfer as being this gold mine of near-term revenues when it takes so long sometimes to see those,” he said.
Some of the big earners are CU’s aforementioned Botox licenses. In the 1990s, Dr. Richard Schmidt, then a urology professor at the University of Colorado Health Sciences Center in Denver, began working with the botulinum toxin, which is used in Botox.
Schmidt found that strains of the toxin could be used to treat overactive bladders and benign prostatic hyperplasia. The treatment proved successful enough that Allergan Inc., the California-based pharmaceutical company that makes Botox, has received approval from the FDA to market as a therapy.
Allergan pays royalties to CU, including the $30 million it received this spring.
The Botox revenue is a rare home run, and accounts for the vast majority of the $32.8 million licensing revenue generated by CU in the past fiscal year.
Inventors, their departments and the university divide up the revenue, and they do it in different ways. UW is the most generous to inventors, with 60 percent going to them. CU splits the money evenly between the inventors, the tech transfer office, the inventors’ lab or research center and the university. CSU Ventures receives 40 percent of revenue after it recoups what it spent protecting the IP and marketing the product, inventors get 35 percent and the remainder goes to the inventors college and to CSU’s research office.
Colorado School of Mines has a tiered approach. The first $30,000 in revenue is split between the inventor and the tech transfer office. After that, 35 percent goes to the inventor, 35 percent goes to the university and 30 percent to the researcher’s department.