Formula for tech transfer varies at labs, universities

Whether it’s discoveries such as an easier and more rapid test for COVID-19, a way to head off some potentially deadly infections that patients acquire in hospitals, or a better understanding of floating particles that impact weather, climate and air quality, universities and federal labs are playing an increasingly important role in propelling such important scientific and technological advances to the market.

That’s where a university’s technology-transfer office comes in. At the University of Colorado, it’s now called Venture Partners at CU Boulder and operates from within the school. At Colorado State, it’s called CSU Ventures and is run from outside as a division of the nonprofit CSU Research Foundation.

Sarah Hibbs-Shipp, managing director for organizational communications at CSURF, explained the two tech-transfer models. “We exist outside the university to support the university in managing these types of assets,” she said. “At Boulder, at CU, their tech-transfer offices are inside each university campus.”

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The new names for tech-transfer offices, according to Brynmor Rees, managing director for Venture Partners at CU Boulder and the school’s assistant vice chancellor for research and innovation, reflect the level of change in how institutions help commercialize innovation.

Innovations born in a lab at universities such as CU or CSU or a federal agency such as the National Center for Atmospheric Research or National Oceanic and Atmospheric Administration are very early stage, inherently disruptive, and thus take more time and money to make it through the long process from concept and results all the way to a product.

“My research world is platform development,” wrote Chuck Henry, a professor of chemistry, chemical and biological engineering and biomedical engineering at CSU. “Most of the time you have to get the platform far enough along before someone will take it. There is a gap that exists where federal funding stops and where I need to get to with the platform before companies will take it and run.”     

Tech-transfer offices help that process along, assisting teams of researchers, faculty, graduate students and post-doctoral researchers who believe in the work they’ve done and that their discovery is a breakthrough. Even if the technology is revolutionary and has a lot of potential, it needs a team of dedicated entrepreneurs to show the way.

At most institutions, the tech-transfer process is fairly generic. Hibbs-Shipp outlined how it works at Colorado State:

“Normally, an employee of CSU or an employee of the university in general, whether they’re faculty, staff or a graduate student, if they come up with a potentially commercializable idea that is part of their job at CSU, then CSU owns that intellectual property as their employer as it would be in any employee-employer relationship, whether it’s external to academia or not,” she said. “The university would then go to their tech-transfer office, whether it is inside or external to the university, and then the tech transfer office will look at whether or not it’s patentable or licensable to an external licensee company to further commercialize it, or if the idea is sound enough that it warrants exploring a startup to further in-license that technology and further commercialize it in hopes that somebody would buy the startup.”

As with all university endeavors, she added, “there’s a limited budget, and patents and commercialization activities are expensive, so you do have to make choices as to the ones that have the greatest potential.”

Whenever an invention is patented, Hibbs-Shipp said, “the inventors in a university setting are required by law to receive a portion of the royalties should that invention ever make any money. That is not the case in private industry; the corporation can take all of the royalties. At CSU, she said, the inventors, academics, students or staff receive up to 35% of the royalties that come back. “They will receive it directly,” she said. “They can assign it to their departments or not, they can keep it personally, but it’s theirs. And then the university receives a portion and CSURF receives a portion to recoup operating expenses — for the life of the patent.

“It’s different for a startup,” she said. “When you’re external to a university, you can choose to own equity in a startup should that be needed for them to become a successful startup, for you to be able to provide them with additional funding. When you’re internal to a university, universities can’t do that. That’s an actual public-university law. You can’t own equity in startups that come out of a university. That’s one of the benefits of being external. Many tech-transfer units that are internal to a university will partner with and operate a nonprofit that is their startup accelerator.”

CU in January will launch “Ascent,” a startup accelerator offering four months of training especially designed for those university researchers for whom entrepreneurship is new. It aims to help new deep-tech startups follow the lead of CU Boulder spinoffs such as Louisville-based electric-vehicle battery builder Solid Power, which will go public this year. CU launched 20 startups last year and has done 160 for all time; its startups raised $2.1 billion in venture capital in 2020.

Federal laboratories also work to commercialize technology transfer. For instance, NOAA’s Technology Partnerships office worked with Dr. Ping Chen, chief executive of Boulder-based Handix Scientific Inc., to help license and market NOAA’s recently developed Portable Optical Particle Spectrometer for aerosol measurement. Now, more than 200 units of POPS have been sold across the world to date, and Handix has grown from one to 12 full-time employees.

More commonly, agencies such as NOAA, the National Institutes of Health, NASA, the National Science Foundation and the departments of Defense and Energy fund tens of billions of dollars in research at U.S. universities nationally — but they want to see a payoff. An innovation may be great, but is it what the market needs?

The Innovation Corps, started in 2011 by the National Science Foundation, provides grant funding specifically for researchers to test that fit, and in late August CU Boulder was named one of the initial recipients of I-Corps “Hub” grants. With the new $15 million award, CU and seven collaborating research universities will help cultivate deep-technology businesses in the western United States. Starting in January, Venture Partners at CU Boulder will lead efforts to launch and support startups through training, mentorship and programming.

Both CU and CSU often work with Fort Collins-based deep-tech incubator Innosphere Ventures to offer support and mentorship to budding collegiate entrepreneurs.

“We partner with Innosphere quite a bit, especially on the startup side, to do further acceleration boot camps for the startups that come out of CSU,” Hibbs-Shipp said. “Their expertise is in deep tech, and it’s a little different than a non-tech startup, so we utilize their resources whenever we can.”

Ben Walker, Innosphere Ventures’ executive director for life sciences, said the incubator’s involvement often depends on whether the university inventors are more interested in licensing or commercializing their innovation.

“What usually happens is, a faculty member who has a technology of interest will contact the technology-transfer office. They’ll go through a question-and-answer session to figure out whether intellectual property should be filed for, and if that’s the case they’ll immediately file a provisional patent. That gives them a year to finalize the patent, but it gets that process started. The technology-transfer office will then, at a higher level, have a conversation about if a patent is granted, are they supportive of either licensing it to another company and getting royalty payments, or are they interested in doing a startup process and commercializing their idea. If it’s the licensing route, we would not get involved, but if they are interested in the commercialization process, they have over at CSU Ventures a process that’s called Launchpad, where they will help a company incorporate — start them off with the incorporation papers, the documentation, a capitalization table and some of the fundamentals. They will also start to do a little bit of market research for them around what the potential market could be, and they start to put pen to paper on a plan.

“Once they start to get some of the fundamentals down, they will introduce the faculty member to us, and we go through some questions; we have an application process. And how the technology transfer office helps is, they will fund the faculty member’s client services from Innosphere Ventures for six months, two quarters. In that process, we help them with target markets, who else is out there, some competitive analysis, value proposition development, all of the things that are necessary to put together a good customer deck — bring on a potential customer — or raise funds for that investor, whether it be an angel, a family office, a venture capitalist and the like.”

Innosphere’s specialty, Walker said, “is helping in the commercialization. CSU may offer its faculty members different options, School of Mines may offer different options. It’s kind of the menu that technology transfer offices have, and we’re one of the options on that menu.”

The Innosphere-CSU collaboration helped Henry launch Fort Collins-based Burst Diagnostics LLC and develop an easier COVID-19 test using patent-pending Capillary-Driven Immunoassay (CaDI) technology, which it licensed from CSU.

At CU Boulder, Rees is most proud of spinoff companies including Bactria Pharmaceuticals LLC, which is developing drugs to address a huge increase in antibiotic resistance — in particular, multi-drug resistant bacteria acquired in hospital settings.

Commercializing its products is a collaboration between Corrie Detweiler, a professor of molecular, cellular and developmental biology, and Chris Morl, who holds degrees in both pharmacology and business administration, whose resume includes executive positions at a local company then known as miRagen Therapeutics Inc., now Viridian, and whose 30-year career has included licensing several startups and a major pharmaceutical company. Detweiler had been working on the technology in her lab at CU with the help of seed grants from the National Institutes of Health, an Advanced Industry Accelerator grant from the state Office of Economic Development and International Trade, and matching funds from CU. Under the “sponsored research agreement,” Bactria will pay CU for work being done in Detweiler’s lab.

The aim of Venture Partners at CU Boulder is that a spinoff startup can get its license quickly and knows it’s getting a good deal. It conducted pretend negotiations with investors to develop a rapid process from which all its spinoff companies can benefit without having to go through lengthy negotiations.

Universities, wrote Henry on the CSU Ventures website, “have a commitment to the public beyond the educational piece. We are responsible for translating products to the people who are paying the taxes and supporting the work.”