OTC News Archive

Six things every CEO should know about university commercialization

Dan Sharp
October 12, 2013

When scientific research leads to innovations and discoveries, a university embarks on a path to intelligently transfer those technologies to the private sector in a way that benefits the public. The plan to commercialize an invention varies depending on the nature of the invention, its market niche, and the invention’s stage of development. However, generally speaking, once a university has identified a promising technology and filed a patent, it looks to find an appropriate partner to bring the technology to market.

Every CEO should know these six things about partnering with a university:

1. Intellectual property (IP) takes time to identify and protect.

Many mistakenly view university-owned IP as low-hanging fruit that will quickly generate significant revenue. However, the path of identifying promising research, vetting it, and transforming the research into marketable a product or service can be time-consuming and relatively expensive. Technology commercialization, particularly at a university, starts with a market assessment of a disclosed invention or discovery to determine whether or not the potential revenue is sufficient to justify the expense of obtaining IP protection.

2. Public universities are subject to state regulations.

Federal and state laws and regulations apply to IP property, tech transfer, and employment at a public university that may not apply to industry or a private university. As such, CEOs should note that public universities receive scrutiny by central system offices, legislative committees, and state staff. Effective technology commercialization will use a thoughtful, deliberate approach that falls within the parameters set by state and federal legal requirements.

3. Ask questions initially.

An organization’s leaders should ask probing questions to ensure the commercialization process is transparent. A CEO or appropriate representative should ask about the tech transfer office policies in advance of discussing business terms. Likewise, the tech transfer office will perform due diligence on its potential partners to ensure that it is an appropriate entity to take the IP to market.

One frequent misconception stems from not realizing that a partnership does not entitle the company to IP discovered or developed in the university research lab. Generally speaking, a university owns IP generated by federally funded research under the Bayh-Dole Act, enacted in 1980. This Act created a uniform patent policy among the federal agencies that fund researchers, enabling universities, nonprofits, and small businesses to retain title to inventions made under federally funded research programs. Both parties will deal with unexpected issues more effectively if they are direct and view the partnership as a collaborative work in progress.

4. An Office of Technology Commercialization values flexibility.

When the time arrives to negotiate business terms, a technology transfer office should strive to make a transaction smooth, reduce inefficiencies, and benefit both sides. A conscientious tech transfer office will remain flexible when negotiating business terms and proposing solutions to the potential partner. By way of example, in lieu of a license agreement a tech transfer office may offer an opportunity for industry-sponsored research if deemed the “best fit” and most appropriate path to pursue.

5. Strong relationships with a research lab are critical.

The most successful partnerships occur when a company forges close ties to university research labs instead of focusing on one piece of technology. Cultivating strong relationships with tech transfer offices and university labs helps to inform the company of current research in the field.

Further to this point, a faculty member and his or her team typically work on multiple technologies at a time. Incidentally, a compelling technology often embodies a family or portfolio of patents rather than a single patent filing.

6. View partnerships with universities as long term.

A university’s ideal partner will successfully bring discoveries and technology to market and/or will support further research through funding. Together and over time, both parties will develop relationships, explore opportunities, and further develop university research to achieve their respective objectives. Although commercializing university discoveries might require a longer commitment, the payoff can be far greater in terms of the significance of the research, the financial return, and their impact on society.

In closing, technology transfer offices enjoy the opportunity and challenge of taking research conducted at a university and effectively commercializing it in a way that maximizes the benefits to the university and the nation. The University of Texas at Austin Office of Technology Commercialization believes research will continue to be a valuable resource for the private sector and the American public.

Dan Sharp is Associate Vice President for Research and Director of the Office of Technology Commercialization (OTC), The University of Texas at Austin, and oversees all aspects of OTC business. He ensures commercialization objectives are achieved through the strategic creation of new licenses and startup companies and through fostering partnerships with university faculty, industry, and the financial community.

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