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Re-Engineering the Re-Engineering the University-Industry PartnershipUniversity-Industry Partnership
From the University-Industry Congress to the University-From the University-Industry Congress to the University-Industry Demonstration PartnershipIndustry Demonstration Partnership
Albert JohnsonAlbert JohnsonCorningCorning
October 12, 2006October 12, 2006
The current state of affairs…The current state of affairs…
• In the nexus between Government, Universities and Industry, two of In the nexus between Government, Universities and Industry, two of the three links work reasonably well. However, much could be done the three links work reasonably well. However, much could be done to improve the link between Academia and Industry.to improve the link between Academia and Industry.
• Relations between Industry and Universities often flounder on the Relations between Industry and Universities often flounder on the issue of Intellectual Property, and academic institutions are often issue of Intellectual Property, and academic institutions are often accused of being an impediment to commercialization, despite the accused of being an impediment to commercialization, despite the existence of the Bayh-Dole Act.existence of the Bayh-Dole Act.
• To really transfer effectively academic innovation into To really transfer effectively academic innovation into commercializable products, one must work on making the weak link commercializable products, one must work on making the weak link stronger.stronger.
Objectives of the University-Industry Objectives of the University-Industry Congress (2003-2006)Congress (2003-2006)
• Convene a “congress” of delegates from industries, universities, and Convene a “congress” of delegates from industries, universities, and government to explore the principles that should govern government to explore the principles that should govern industry/university collaboration and identify an array of strategies industry/university collaboration and identify an array of strategies for translating those into research agreements.for translating those into research agreements.
• Hold a “summit” of national leaders of industry, university and Hold a “summit” of national leaders of industry, university and government at the National Academies to develop and endorse government at the National Academies to develop and endorse principles/strategies for research agreements that will foster the principles/strategies for research agreements that will foster the creation and commercialization of new knowledge.creation and commercialization of new knowledge.
University-Industry CongressUniversity-Industry Congress
Five Major Meetings:Five Major Meetings:• First Congress – San Francisco in August 2003First Congress – San Francisco in August 2003• Second Congress – Washington, D.C. in October 2004Second Congress – Washington, D.C. in October 2004• Third Congress – Washington, D.C. in February 2005Third Congress – Washington, D.C. in February 2005• Fourth Congress – Washington, D.C. in June 2005Fourth Congress – Washington, D.C. in June 2005• Fifth Congress – Washington, D.C. in October 2005Fifth Congress – Washington, D.C. in October 2005
Balanced Membership:Balanced Membership:• Universities: public, private, S M LUniversities: public, private, S M L• Industries: various sectors, S M L Industries: various sectors, S M L • Government: OSTP and Commerce plus NSF and NIHGovernment: OSTP and Commerce plus NSF and NIH
Sponsors:Sponsors:• Kauffman FoundationKauffman Foundation• Sloan Foundation, Wallace Coulter FoundationSloan Foundation, Wallace Coulter Foundation• Boeing, Extrude Hone (now Ex One), Hewlett-Packard, MicrosoftBoeing, Extrude Hone (now Ex One), Hewlett-Packard, Microsoft
Summit held in Washington DC on April 25, Summit held in Washington DC on April 25, 2006 at the National Academies2006 at the National Academies
National Academies’ Keck Bldg. ... in Washington, DC
(approx. 170 registered attendees representing 32 companies, 47 (approx. 170 registered attendees representing 32 companies, 47 universities, and several nonprofit/foundation/government)universities, and several nonprofit/foundation/government)
University-Industry Demonstration University-Industry Demonstration PartnershipPartnership
Founders Circle Members (6)Founders Circle Members (6)• Ex OneEx One• Hewlett PackardHewlett Packard• Kauffman FoundationKauffman Foundation• National Science FoundationNational Science Foundation• PfizerPfizer• University of Illinois at Urbana-ChampaignUniversity of Illinois at Urbana-Champaign
Industry Members (10)Industry Members (10)• Alfred E. Mann Foundation for Biomedical Engineering (regular member exception)Alfred E. Mann Foundation for Biomedical Engineering (regular member exception)• CorningCorning• Dow Chemical CompanyDow Chemical Company• EssilorEssilor• Glaxo-Smith-KlineGlaxo-Smith-Kline• IBMIBM• IntelIntel• Minerals Technologies Inc.Minerals Technologies Inc.• Monsanto CompanyMonsanto Company• Praxair, IncPraxair, Inc
University-Industry Demonstration University-Industry Demonstration PartnershipPartnership
University Members (30)University Members (30)• Arizona State UniversityArizona State University• Boston UniversityBoston University• Brandeis UniversityBrandeis University• Carnegie Mellon UniversityCarnegie Mellon University• Georgia Institute of TechnologyGeorgia Institute of Technology• Georgetown University Medical CenterGeorgetown University Medical Center• Iowa State UniversityIowa State University• Keck Graduate InstituteKeck Graduate Institute• New Jersey Institute of TechnologyNew Jersey Institute of Technology• North Carolina State UniversityNorth Carolina State University• Ohio State UniversityOhio State University• Pennsylvania State UniversityPennsylvania State University• Purdue UniversityPurdue University• Rice UniversityRice University• Syracuse UniversitySyracuse University• University of California, BerkeleyUniversity of California, Berkeley• University of California, DavisUniversity of California, Davis
• University of California Los AngelesUniversity of California Los Angeles• University of IowaUniversity of Iowa• University of KansasUniversity of Kansas• University of MarylandUniversity of Maryland• University of MinnesotaUniversity of Minnesota• University of North TexaUniversity of North Texass• University of Notre DameUniversity of Notre Dame• University of OklahomaUniversity of Oklahoma• University of OregonUniversity of Oregon• University of TennesseeUniversity of Tennessee• University of Texas at AustinUniversity of Texas at Austin• University of WisconsinUniversity of Wisconsin• Washington State UniversityWashington State University• Wright State UniversityWright State University
Convening AuthorityConvening Authority• Government-University-Industry Research Government-University-Industry Research
Roundtable of the National AcademiesRoundtable of the National Academies
Main problem Congress tried to addressMain problem Congress tried to address
• Negotiation of sponsored research agreements (particularly over Negotiation of sponsored research agreements (particularly over intellectual property) is a barrier to industry-university research intellectual property) is a barrier to industry-university research collaboration in the United States.collaboration in the United States. Takes longerTakes longer Increases transactional costsIncreases transactional costs Little/no benefit resultsLittle/no benefit results Advantages to work overseasAdvantages to work overseas
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Time-to-agreement too long!Time-to-agreement too long!(university view)(university view)
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Time-to-agreement too long! Time-to-agreement too long! (industry view)(industry view)
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Inconsistency a headache: Inconsistency a headache: Terms and conditions all over the mapTerms and conditions all over the map
Universities are also impeded Universities are also impeded by current IP practicesby current IP practices
• 95-97% of all research projects result in NO licensable intellectual property.95-97% of all research projects result in NO licensable intellectual property.
• Sponsored research office spends disproportionately more on staffing Sponsored research office spends disproportionately more on staffing (about 5x more, per dollar received) to manage industry-funded research (about 5x more, per dollar received) to manage industry-funded research agreements, compared to government-funded research agreements.agreements, compared to government-funded research agreements.
• Long time to agreement can result in complete loss of project. If wait is too Long time to agreement can result in complete loss of project. If wait is too longlong Source of funding disappears (change in management, new fiscal year...)Source of funding disappears (change in management, new fiscal year...) Technology of interest becomes outmoded (6 month cycle time for IT)Technology of interest becomes outmoded (6 month cycle time for IT) Funding spent on legal fees outweighs project cost (at this point, most Funding spent on legal fees outweighs project cost (at this point, most
companies will walk away)companies will walk away) Sponsor unlikely to return for another projectSponsor unlikely to return for another project Faculty become discouragedFaculty become discouraged Students move onStudents move on
Evidence that U.S. industry is moving Evidence that U.S. industry is moving sponsored research overseassponsored research overseas
• Half of IRI survey respondents admit to sponsoring research Half of IRI survey respondents admit to sponsoring research overseas as a result of difficulty in IP negotiations with U.S. overseas as a result of difficulty in IP negotiations with U.S. universitiesuniversities
• Volume of industry sponsored research growing overseas: in 2003, Volume of industry sponsored research growing overseas: in 2003, MIT at $81.5M, Tsinghua at $79.7MMIT at $81.5M, Tsinghua at $79.7M
• Hewlett-Packard congressional testimony (9/17/02)Hewlett-Packard congressional testimony (9/17/02)
Two financial reasons why Two financial reasons why it is important to solve this problemit is important to solve this problem
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1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Industry Sponsored Research (Millions of $)
Net Licensing Income (Millions of $)
SOURCE: National Science Board, Science and Engineering Indicators-2004
U.S. R&D source of funds: 1953-2002U.S. R&D source of funds: 1953-2002
University-Industry CongressUniversity-Industry Congress
Focused On:Focused On:
• Challenges becoming successes Challenges becoming successes
• Building trust and teamworkBuilding trust and teamwork
• Defining and prioritizing the issuesDefining and prioritizing the issues
• Finding a “common cause”Finding a “common cause”
• Developing flexibilityDeveloping flexibility
• Building on existing efforts:Building on existing efforts: Working Together, Creating Working Together, Creating
Knowledge (BHEF)Knowledge (BHEF) Responsible Partnering (EIRMA)Responsible Partnering (EIRMA)
Issues:Issues:
• Understanding core missions that Understanding core missions that are fundamentally distinct and are fundamentally distinct and occasionally opposedoccasionally opposed
• Understanding each party’s Understanding each party’s bottom linebottom line
• Moving science into commerceMoving science into commerce
• Old questions, new solutionsOld questions, new solutions
• Moving from “policy” to “reason”Moving from “policy” to “reason”
Framework led to three guiding principlesFramework led to three guiding principles
1.1. A successful university-industry collaboration should support the A successful university-industry collaboration should support the mission of each partner. Any effort in conflict with the mission of mission of each partner. Any effort in conflict with the mission of either partner will ultimately fail.either partner will ultimately fail.
2.2. Institutional practices and national resources should focus on Institutional practices and national resources should focus on fostering appropriate long-term partnerships between universities fostering appropriate long-term partnerships between universities and industry. and industry.
3.3. Universities and industry should focus on the benefits to each party Universities and industry should focus on the benefits to each party that will result from collaborations by streamlining negotiations to that will result from collaborations by streamlining negotiations to ensure timely conduct of the research and the development of the ensure timely conduct of the research and the development of the research findings.research findings.
This sounds like apple pie, but each principle This sounds like apple pie, but each principle is deeper than it looks. For example...is deeper than it looks. For example...
1.1. A successful university-industry collaboration should support the A successful university-industry collaboration should support the mission of each partner. Any effort in mission of each partner. Any effort in conflict with the missionconflict with the mission of of either partner will ultimately either partner will ultimately failfail.. This explains why universities can sometimes give away IP in highly This explains why universities can sometimes give away IP in highly
applied projects but not in fundamental research (reverse is true for applied projects but not in fundamental research (reverse is true for companies). companies).
Because companies must return a profit to shareholders, their IP Because companies must return a profit to shareholders, their IP arrangements must reflect their business models. These differ arrangements must reflect their business models. These differ drastically between companies, a reason why no “one size fits all” drastically between companies, a reason why no “one size fits all” agreement will ever work across companies, while master agreements agreement will ever work across companies, while master agreements for a specific company (or division within) often will work.for a specific company (or division within) often will work.
Results of the Congress are fourfoldResults of the Congress are fourfold
1.1. A set of A set of guiding principlesguiding principles for University-Industry partnerships for University-Industry partnerships
2.2. A collection of A collection of living studiesliving studies (case examples) of how institutions have used (case examples) of how institutions have used innovative ideas for resolving problems that commonly arise in U-I innovative ideas for resolving problems that commonly arise in U-I agreementsagreements
3.3. Preparations to launch the test phase of a U-I Preparations to launch the test phase of a U-I demonstration partnership demonstration partnership (UIDP)(UIDP), a new forum for developing solutions to difficult IP problems., a new forum for developing solutions to difficult IP problems.
4.4. Development of a Development of a new software toolnew software tool for creating intellectual property for creating intellectual property agreements. This agreements. This turbo-negotiations approachturbo-negotiations approach takes into account the needs takes into account the needs and contributions of the parties in guiding the negotiators through the and contributions of the parties in guiding the negotiators through the process of building an agreement.process of building an agreement.
The launching of the UIDP will allow institutional The launching of the UIDP will allow institutional beta-testing of new approaches to contractsbeta-testing of new approaches to contracts
• Working groups will be focused on Working groups will be focused on designing designing institutional institutional experimentsexperiments..
• There will be a broad There will be a broad information-information-sharing forumsharing forum on latest news, best on latest news, best practices, etc. practices, etc.
• UIDP is UIDP is modeled onmodeled on the 20-year the 20-year success of the success of the Federal Federal Demonstration PartnershipDemonstration Partnership in in driving institutional change on a driving institutional change on a national level.national level.
Demonstrations
Forum
First project of proposed UIDP: First project of proposed UIDP: TurboNegotiatorTurboNegotiator
• Interview tool aimed at guiding both sides to come to agreement on Interview tool aimed at guiding both sides to come to agreement on nature of project.nature of project.
• Answers to interview questions allow project to be plotted in Answers to interview questions allow project to be plotted in nn--dimensional “project space.”dimensional “project space.”
• Depending on location in project space, software suggests potential Depending on location in project space, software suggests potential applicable clauses.applicable clauses.
• Each clause can be clicked on for more information on history, use, Each clause can be clicked on for more information on history, use, pros and cons for industry/university... great depth of expertise.pros and cons for industry/university... great depth of expertise.
One origin of IP disputes: Industry and University One origin of IP disputes: Industry and University do not begin with same mental concept of projectdo not begin with same mental concept of project
• ““TurboNegotiator” model would have up-front interview instrument TurboNegotiator” model would have up-front interview instrument that allows each partner to examine underlying assumptions that allows each partner to examine underlying assumptions regarding the type of project they are working with. regarding the type of project they are working with.
• Identifying underlying mismatched expectations before the start of Identifying underlying mismatched expectations before the start of legal negotiations prevents much wasted time.legal negotiations prevents much wasted time.
Questions for each partner would focus on Questions for each partner would focus on basic parameters such as…basic parameters such as…
• Nature of project (fundamental research Nature of project (fundamental research applied research) applied research)
• Nature/extent of contributions and investments from each partyNature/extent of contributions and investments from each party
• Nature of deliverables/likelihood of a patentable inventionNature of deliverables/likelihood of a patentable invention
Nature of Research
Invention Probability
Relative Investment1
1
-1
1
-1
-1
1 = fundamental research-1 = applied research
1 = high for University-1 = high for Sponsor
1 = high probability of patent-1 = low probability of patent
Example of project parameter spaceExample of project parameter space
• Tool will expose the likelihood of valuable IP once both parties have Tool will expose the likelihood of valuable IP once both parties have unambiguously agreed on the coordinates of their project in “IP unambiguously agreed on the coordinates of their project in “IP space.”space.” E.g., IT project in applied research, even with high probability of E.g., IT project in applied research, even with high probability of
invention, almost never yields large licensing revenue.invention, almost never yields large licensing revenue.
• Junior staff bound to templates need deeper knowledge to be Junior staff bound to templates need deeper knowledge to be flexible.flexible. Instrument should provide multiple options for each situation, and Instrument should provide multiple options for each situation, and
educate user on consequences and implications of each.educate user on consequences and implications of each. Instrument should provide support for decision-making.Instrument should provide support for decision-making.
ExampleExample
• For example, a For example, a costlycostly project for a company with project for a company with direct impactdirect impact on its on its current business, but with current business, but with little chance of patentable inventionslittle chance of patentable inventions would be given by (would be given by (-1-1, , -1-1, , -1-1).).
• TurboNegotiator output based on this answer would suggest the TurboNegotiator output based on this answer would suggest the following terms for inclusion in the agreement:following terms for inclusion in the agreement:
ALTERNATIVE i: The University shall grant the Company a commercial ALTERNATIVE i: The University shall grant the Company a commercial license on fair and reasonable terms for an up-front payment at the time of license on fair and reasonable terms for an up-front payment at the time of execution of the license. execution of the license. Explain pros and cons of this to me (hyperlink).Explain pros and cons of this to me (hyperlink).
ALTERNATIVE ii: Company agrees to fully pay or reimburse patent ALTERNATIVE ii: Company agrees to fully pay or reimburse patent application expenses for those inventions it wants. University shall grant application expenses for those inventions it wants. University shall grant Company on fair and reasonable terms an exclusive commercial license in a Company on fair and reasonable terms an exclusive commercial license in a field of use in return for consideration to be mutually negotiated but which field of use in return for consideration to be mutually negotiated but which may include milestone payments, and/or a licensing fee. may include milestone payments, and/or a licensing fee. Explain pros and cons Explain pros and cons of this to me (hyperlink).of this to me (hyperlink).
TurboNegotiator tool is designed to address TurboNegotiator tool is designed to address common negotiation failure modescommon negotiation failure modes
• Does not assume a “one-size fits all” solutionDoes not assume a “one-size fits all” solution Each project is unique – each agreement is unique. Tool designed to Each project is unique – each agreement is unique. Tool designed to
get as quickly and painlessly as possible to that unique solution.get as quickly and painlessly as possible to that unique solution.
• Forces “meeting of the minds” up front: each party must identify Forces “meeting of the minds” up front: each party must identify what s/he wants out of the partnership being negotiated. what s/he wants out of the partnership being negotiated. Addresses unspoken, differing mental perceptions of same project. Addresses unspoken, differing mental perceptions of same project.
Case studies show these are often at the root of an inability to reach Case studies show these are often at the root of an inability to reach agreement.agreement.
TurboNegotiator tool is designed to address TurboNegotiator tool is designed to address common negotiation failure modescommon negotiation failure modes
• Distinguishes between situations where treatment of IP is important Distinguishes between situations where treatment of IP is important vs. not important (95-97% of research agreements produce no vs. not important (95-97% of research agreements produce no valuable patents, but most are fought over nonetheless)valuable patents, but most are fought over nonetheless) Forces the discussion between parties as to whether the IP is worth Forces the discussion between parties as to whether the IP is worth
fighting over in this particular instance.fighting over in this particular instance. In the beginning, both parties will need to guess at IP likelihood, and In the beginning, both parties will need to guess at IP likelihood, and
have their guesses agree. In the future, one may be able to have the have their guesses agree. In the future, one may be able to have the program predict this, based on historical data culled from sponsored program predict this, based on historical data culled from sponsored research and licensing offices.research and licensing offices.
• Educational tool for negotiators in trade-offs and IP considerationsEducational tool for negotiators in trade-offs and IP considerations Many individuals assigned to negotiate these unique, complex Many individuals assigned to negotiate these unique, complex
agreements do not have the depth of training required to navigate them. agreements do not have the depth of training required to navigate them. This tool provides on-demand educational material. This tool provides on-demand educational material.
TurboNegotiator tool is designed to address TurboNegotiator tool is designed to address common negotiation failure modescommon negotiation failure modes
• Easy-to-use tool would assist broad adoptionEasy-to-use tool would assist broad adoption Move towards national uniformity in approach.Move towards national uniformity in approach.
• Tool will generate its own metric of success (time-to-agreement)Tool will generate its own metric of success (time-to-agreement) Electronic time-to-agreement module would allow institutions to track Electronic time-to-agreement module would allow institutions to track
reduction in processing time as a result of using the tool, and to reduction in processing time as a result of using the tool, and to correlate processing time with characteristics of the project under correlate processing time with characteristics of the project under consideration.consideration.
Plan is for UIDP to try to adopt tool currently in use at Georgia Tech.Plan is for UIDP to try to adopt tool currently in use at Georgia Tech. Nationwide adoption of the same tool everywhere would ultimately allow Nationwide adoption of the same tool everywhere would ultimately allow
automated national uploading/compilation of time-to-agreement data, automated national uploading/compilation of time-to-agreement data, and allow the tracking national trends in IP negotiations.and allow the tracking national trends in IP negotiations.
Concluding remarksConcluding remarks
• For a University to achieve the goal of innovation through For a University to achieve the goal of innovation through commercialization will require working effectively with Industry, and commercialization will require working effectively with Industry, and vice versa.vice versa.
• National efforts aimed at supporting better processes for reaching National efforts aimed at supporting better processes for reaching collaborative agreements between Universities and Industry collaborative agreements between Universities and Industry deserve support (UIDP).deserve support (UIDP).
• Specific tools (e.g., TurboNegotiator) offer novel opportunities to re-Specific tools (e.g., TurboNegotiator) offer novel opportunities to re-examine processes which have not been very effective in the past.examine processes which have not been very effective in the past.
For more informationFor more information
• Bob Killoren, President, UIDP Bob Killoren, President, UIDP [email protected]@osu.edu
• Susan Butts, Vice President, UIDP Susan Butts, Vice President, UIDP [email protected]@dow.com
• Albert Johnson, Representative, UIDPAlbert Johnson, Representative, [email protected]@corning.com
To sign up for the University-Industry To sign up for the University-Industry Demonstration Partnership (UIDP) or Demonstration Partnership (UIDP) or
obtain a copy of these slidesobtain a copy of these slides
• Merrilea MayoMerrilea [email protected]@nas.edu
