Technology transfer is one of the most promising forces affecting higher education today. Some see it as a money maker. Some see it as a prestige builder. And still others approach it cautiously.
The Internet search engine “Google,” the anti-cancer drug “Taxol,” the sports drink “Gatorade” and the diabetes monitoring device “GlucoWatch” are just a few examples of technology transfer – products originating from university research that make it to the commercial sector.
The definition of technology transfer depends on whom you ask, but generally speaking, it is the transfer of new discoveries and innovations, the result of university research, to the commercial sector, according to the Council on Governmental Relations and the Association of University Technology Managers.
A Brief History
At the University of California, Riverside, technology transfer traces its roots to 1907 and the work of the Citrus Experiment Station, which developed new varieties of citrus fruit, tested methods of growing and protecting the crops, then provided their findings to growers.
Nationally, the roots of technology transfer reach back to the establishment of land grant universities, such as the University of California, in the mid- to late 1800s. These institutions were dedicated to the development of the practical application of the agricultural and mechanical arts.
The University of Wisconsin at Madison established the first university-based office of technology transfer in 1925, to patent and license the discovery by Professor Harry Steenbock, who unlocked a way to artificially manufacture and store Vitamin D in foods. The nutrient is key to preventing the debilitating effects of childhood rickets, a common disease of the time. The university negotiated a license agreement for the process with the Quaker Oats Company in 1927.
But as promising as such discoveries were, the flow of technology from universities remained at a trickle prior to World War II for three fundamental reasons. First, most government research was carried out in government laboratories. Second, government funding placed the presumption of ownership in the hands of the agency with the purse strings. Finally, the government had no consistent regulations governing patent and licensing agreements, leaving the details up to each funding agency.
World War II would give university-based technology transfer its first major boost, bringing campuses into greater partnership with the federal government.
Vannevar Bush developed the modern notion of technology transfer in a 1945 report to the President titled “Science – The Endless Frontier.” During World War II, the former MIT electrical engineer directed the Office of Scientific Research and Development, which coordinated the activities of about 6,000 of the leading scientists in the U.S. Bush witnessed first hand the importance of university research to the national defense and understood the broader impact university research could have on the economy.
But between 1945 and 1980, government agencies generally retained ownership of the discoveries and innovations universities achieved with federal funding. The federal government also lacked a uniform patent management policy, which made technology transfer difficult.
As a result, after the war, the government had accumulated about 30,000 patents in its portfolio, of which only about 5 percent had been licensed, wrote patent attorney Howard Bremer in a 1998 paper to the Council on Governmental Relations, a Washington D.C.-based advocacy group for universities, research hospitals and nonprofit organizations. As the Cold War set in, the need for technological superiority, especially in defense-oriented areas, fueled the need to continue to provide public support for science research.
If World War II and the Cold War that followed set the conditions that fueled technological innovation at universities, then a piece of 1980 federal legislation, the Bayh-Dole Act, sped the transfer of that innovation to the commercial sector.
Then-U.S. Senators Birch Bayh (D-Indiana) and Bob Dole (R-Kansas), sponsored the Bayh-Dole act, which culminated in a nearly-20-year effort by the nonprofit sector to spark the transfer of technology to industry using the patent system. The act’s most prominent feature was that it shifted the presumption of title for any invention made by a small business, university or other nonprofit group using federal funds away from the government agency and gave it to the contractor or grant recipient, which was frequently a university.
Of the Bayh-Dole Act, Bremer wrote: “It should be considered a landmark piece of legislation in that, after many false starts and unsuccessful efforts it was, finally, a recognition by Congress that:
•imagination and creativity are truly a national resource;
•that the patent system is the vehicle which permits us to deliver that resource to the public;
•that placing the stewardship of the results of basic research in the hands of universities and small businesses is in the public interest;
•and that the existing federal patent policy was placing the nation in peril during a time when intellectual property rights and innovation were becoming the preferred currency in foreign affairs.”
The Impact
The Association of University Technology Managers (AUTM) reports that before 1980, fewer than 250 patents were issued to U.S. universities each year. Discoveries were seldom commercialized, according to the association’s Web site. By contrast, AUTM members reported that 3,914 new license agreements were signed in 1999. Between 1991 and 1999, annual invention disclosures increased 63 percent to more than 12,324 while new patent filings increased 77 percent to 5,545.
Passage of the Bayh-Dole Act, the evolution of genetic engineering, and a U.S. Supreme Court decision that made living matter – in this case a bacterium – patentable, helped raise the awareness of the potential economic impact in university-generated technology, Bremer wrote.
Today, the stakes remain high, as a depressed economy has forced states and the federal government to cut back on their support of higher education, and research in particular. Add to that, the rising expectations of students, faculty and university supporters, and campus officials are forced to look for alternative ways of raising money to keep ambitious research programs afloat.
To date, 2000 has been the most productive year ever in technology transfer. American colleges and universities collected more than $1 billion in royalties, created 368 start-up companies, and filed for 8,534 U.S. patents, according to the Chronicle of Higher Education. The top royalty earner that year was the University of California, with $261.5 million in royalties – thanks to the $200-million settlement of a patent infringement lawsuit paid by Genentech to UC San Francisco.
In 2001, the last year for which figures are available, colleges and universities collected more than $827 million, filed more than 9,450 patents, signed more than 3,300 licenses and created more than 400 start-up companies, a Chronicle of Higher Education report stated. The University of California had slipped into third place, earning $66.7 million; behind the Massachusetts Institute of Technology, with earnings at nearly $74 million; and Columbia University, which earned nearly $130 million.
The University of California in 2002, received $88.1 million in royalties derived from 209 inventions, according to the University of California’s Annual Report on Technology Transfer.
The University of California’s Structure
With the world’s fifth largest economy, California’s growth is being driven mostly by such knowledge-intensive industries as biotechnology, telecommunications, and information technology, according to the California Department of Finance.
“Universities traditionally are the intellectual engines that drive the cutting edge of technology and development,” said Richard Luben, interim vice chancellor for research at UC Riverside. “Researchers at universities have much more freedom to examine the broad range of ideas and although there may not be a high take rate from these examinations, generally the most technologically advanced products come out of those investigations.”
The UC Office of Technology Transfer undertakes the task of administering the intellectual property and technology transfer of the largest public university in the nation with an active portfolio of about 5,500 inventions, more than 3,000 U.S. patents generating licensing revenues of about $100 million.
Each of the UC’s nine existing campuses has an office that helps faculty and researchers deal with intellectual property or technology transfer issues but each campus office is at a different stage of development. UC Berkeley and UCLA have the most comprehensive offices, both of which were established in 1990 and offer a wide range of services. At offices on the UC Riverside and UC Santa Barbara campuses, established in 2001 and in February (2003), respectively, the staff relies heavily on the UC Office of Technology Transfer in Oakland. The technology-transfer activity generated at each campus determines the size and authority delegated to their intellectual property or technology transfer offices.
“UC Riverside currently has limited authority delegated to it because we’ve historically been one of the smallest campuses,” Luben said. “We are no longer the smallest campus in regards to our research and related activities.”
According to the University of California 2002 Technology Transfer Annual Report, UC Riverside has a portfolio containing 210 inventions, 71 active patents and licensing revenues in excess of $1 million, surpassing UC Santa Cruz in all three categories but trailing UC Santa Barbara.
Riverside, like other smaller UC campuses such as Santa Cruz, Santa Barbara and the yet-to-open Merced simply do not yet generate the income to justify more comprehensive offices on their campuses. But as they grow they will become more self-sufficient.
“What we’re doing in the meantime is collaborating with other campuses,” Luben said. “All the smaller campuses lack local licensing authority and we’re collaborating with them on issues of technology transfer.”
UC Riverside’s Role
UC Riverside’s technology transfer is deeply rooted in the discovery of products and processes that have an application in agriculture. Part of its future may continue that relationship through the campus’s development of a plant genomics center.
Most notably, UC Riverside’s predecessor, the Citrus Experiment Station, has developed and delivered new varieties of oranges, mandarin oranges, grapefruit, lemons and other citrus and citrus hybrids to markets in the United States and globally since the early 1900s. Today, more than 40 citrus varieties can be traced back directly to UC Riverside, with indirect contributions from this campus bred into nearly every facet of the citrus trade.
Likewise, several commercially available avocado varieties can also be traced back to a UC Riverside breeding program, one of the leaders in avocado development in California and the world.
And when it comes to the family lawn, much of the technology growing in front and back yards throughout America has roots at UC Riverside, a major breeder of turfgrass, particularly a low-maintenance form known as Zoysiagrass, varieties of which are licensed around the world.
But that strictly agricultural character is changing as the campus grows.
“We’ve got a tremendous amount of activity occurring in the genomics area, in nanoscience, material sciences and engineering,” said Luben. Emerging areas of discovery also include environmental sciences, air and water quality research.
One notable example is William Frankenberger, (see also page 25) an environmental sciences professor at UC Riverside who developed the technology that is the basis for three patents for cleaning up toxic elements in soil, on plant hormones to improve crop production, and on a bacterium to clean perchlorate – a contaminant from rocket fuel – from groundwater. He hopes the university will license the patents to outside companies.
He is also the founder of four companies that consult on and research environmental contamination and unregulated consumer vitamin, food and cosmetic products.
UC Riverside has recently established growing research centers in plant genomics and the study of nanoscience. To meet those emerging needs, UC Riverside established its Office of Intellectual Property Services in 2001 as part of the Office of Research Affairs. It is one of the UC system’s newest.
While Nora Hackett, director of intellectual services, handles the legal aspects of getting an idea to market, UC Riverside has embarked on several initiatives and partnerships to help faculty researchers handle the business end of getting their discoveries into the commercial sector, primarily through the efforts of Chris Buydos, UC Riverside’s economic development manager.
The campus, in 2001, also established the Center for Technology Development [see page 28 for more information on the CTD] to facilitate the transfer of research findings and human resources from the university to business and industry. It offers services of mutual value to the university and to industry, and advocates for improved exchange and use of scientific findings.
To industry, the center offers the umbrella of technology commercialization services such as, access to grant funding, collaborative research, interns, and facilities services.
To faculty researchers the center offers grants for partnerships with industry in the following areas: biotechnology, information technology applied to the life sciences, digital media, communications technology networks such as wireless or wired Internet technologies, microelectronics, electronics, and small business innovation research.
Other initiatives and partnerships in which UC Riverside is involved include:
Connecting Research and Economic Development for the 21st Century (CORE21) –An integrated partnership of local universities and colleges with the technology industry. www.core21.org
The University Research Park – Developed by the city and county of Riverside in partnership with UC Riverside to attract technology companies with tax incentives, to provide a technology-based business park environment that has the smart infrastructure, competitive resources and support services necessary to service new and emerging technology based industry.
The Park, established in 1997, presently consists of eleven lots on 39 acres, with an additional 17 acre expansion underway.
http://ResearchPark.ucr.edu
UC Riverside Office of Research Affairs – Coordinates research activities among the academic units on campus and directs technology transfer projects to the office of Intellectual Property Services. http://www.ora.ucr.edu/
IE TechSource – The regional technology alliance offers technical, consulting and grant funding services to emerging technology-based companies.
www.ietechsource.org
Inland Empire Economic Partnership – A nonprofit corporation created to attract, create, and retain business to increase the region’s growth and economic output. www.ieep.com
Riverside Regional Technology Transfer Center – A business incubator within the University Research Park featuring laboratories to support biotechnology, information technology, electronic and environmental technology industry start-up businesses. Within this center are the support services of Small Business Development Center and the Regional Technology Alliance.
UCR Connect – A provider of support services such as capital, professionals and university research, to high-tech businesses and academic entrepreneurs. UCR Connect works under the auspices of the UCR Extension. www.ucrconnect.org
The UC Discovery Grant – A $60 million-a-year grant from state, industry and university funds to help leverage companies’ research and development budgets by giving them:
Access to UC researchers, students and labs;
State matching funds and state-federal tax credits;
Peer-reviewed research and budget plans;
100-day inception-to-grant cycle.
http://www.ucdiscoverygrant.org
A Point of Caution
As the national economy becomes more information dependent, the knowledge and expertise universities develop have become increasingly valuable. The resulting entrepreneurial effort hasn’t happened without a note of skepticism at the potential conflict of interest of tying research to the demands of the marketplace.
Most universities have developed policies or guidelines that seek to balance the benefits of partnership with private enterprise, with the higher education mission of teaching, research and benefit to the public.
Harvard University, for one, recently drafted a statement of principles to govern how their faculty will work with private enterprise in ways that preserve the university’s core academic values of applying their knowledge in a socially beneficial way; and enriching their teaching and research efforts.
“Public trust in the university as an educational institution committed to the pursuit of truth and advancement of knowledge is critical,” the statement said. “The university therefore should seek to ensure any partnerships involving a substantial commercial element, as well as any commercial activities it undertakes on its own, are consistent with these core values.”
The statement also outlines an advance review policy for any partnership proposals.
The University of California also has a series of guidelines governing university-industry relations to uphold the UC core missions of research, teaching and public service. The UC statement covers licensing the use of research technology, copyright issues, and the use of tangible research products such as biological materials, chemical compounds, electrical schematic and mechanical drawings.
For the most part, university policies require that any partnerships undertaken with private industry not adversely affect the facultys’ freedom of inquiry – that is, the right to publish research findings and the commitment to open teaching and research. They also require such partnerships to avoid placing the faculty member(s) or the university in a conflict of interest, and to avoid impinging on the educational welfare of students.
Focusing merely on the financial potential of partnerships with industry is, in a sense, missing the point, according to UC Riverside’s Richard Luben.
“Technology transfer is not just a way of bringing in income but it’s a way of creating relationships with the surrounding community,” he said.
Technology transfer, according to Luben, should not just be “focused on royalties and income but on the entire breadth of a relationship between the external company or agency and the university. The value of these things, apart from the royalties, may actually surpass the value of the income from the royalties.”