University technology commercialization is getting more difficult. Data from over 100 universities shows that licensing revenue per patent, a key measure of TTO of efficacy, has dropped by 30% since 2008. So why should University technology transfer offices care about this? Making money isn't the primary, or even secondary goal of University R&D. And other metrics paint a rosier picture. Number of licenses per year, for example, is up.
By thinking this way, Universities fall short of their responsibility to their sponsors AND fail to capitalize on a significant opportunity and the public. Lack of licensing revenue belays a much more important shortcomming - lack of commercialization. At the same time,large corporations increasingly source early-stage technology from start-ups, universities, and research institutions. Companies are pouring billions into this ecosystem in the form of venture investments, sponsored research, co-development, and licensing. To date, universities have largely failed to capitalize on this.
Not only are universities missing out on a significant revenue stream, but also on a highly effective way to attract and retain top scientific talent.
To capitalize on this opportunity, Universities must first overcome a number of challenges. Each year, technology transfer offices deal with an increasing number of patents and technology disclosures. At the same time, budgets and staff sizes have remained relatively constant. Even with top notch staff, technology transfer offices (TTOs) face an uphill battle, made more difficult by a decline in demand for defensive licenses.
Where does this leave Universities?
The pace of technology development is unlikely to slow and unfortunately, technology transfer offices are unlikely to receive comparable funding increases. Instead, TTOs need to find faster, more efficient approaches to commercialization. In our work with some of the most forward-leaning research institutions, Tradespace identified three key elements that lead to improved commercialization outcomes.
1) Better Early-Stage Prioritization
The average number of patents per year across US Universities has grown by more than 300% over the past 20 years, rising from around 50 patents per year to over 170. This means Universities need to analyze over three technologies every week, not counting disclosures. To keep pace with this flood of new technologies, technology transfer offices must become more efficient at making go / no-go decisions on new technologies.
One way to do this is automation. Conventional wisdom holds that IP is so complex and ambiguous that it takes an expert to evaluate commercial potential. After analyzing thousands of licenses and transactions however, Tradespace found that certain data in patents and disclosures strongly predicted commercial value. With these findings, we’ve built tools to instantly evaluate every technology in a portfolio based on strength, marketability, and defensibility.
These tools don’t replace the role of a TTO, they make them more efficient and free up time to focus on higher value tasks like structuring partnerships and working with inventors.
Universities can also solve this problem by increasing researcher engagement in the commercialization process. Admittedly, the relationship between inventors and technology transfer offices can be tenuous. Researchers may view technology disclosure forms and interviews as time that could otherwise be spent conducting new research. At Tradespace, we’ve found that technology transfer offices can capitalize on some of the fundamental aspects of human nature to increase engagement.
Everybody likes to know how their work compares to others. Inventors in particular are eager to see how their research compares to that of their peers, and to find any other technologies that have been proposed for their particular research challenge. With this in mind, we built intuitive tools that researchers can use to quickly answer these questions while also providing essential data for technology transfer professionals.
These initiatives have successfully convinced researchers that by providing additional data (in this case through the Tradespace IP Platform), they could significantly increase the likelihood their technology is successfully licensed. As engagement increases, universities also improve their ability to retain top talent.
Technology transfer managers review hundreds of different technologies. They may get some data from the inventor on companies to target, but they frequently have to generate target lists from scratch. Not only is this step time consuming, but it is rarely comprehensive.
It is now possible to process data on every patent held by every company in the world to identify interest in a particular technology.
Using predictive analytics, you can instantly generate comprehensive, ranked lists of companies to target for commercialization. The time TTOs save on researching institutions can then be spent on outreach and structuring deals.
Unfortunately, visibility alone is rarely enough. Even after finding the right companies, the likelihood of a successful outcome is still limited. For better or worse, relationships matter. So does knowing the parts of a company with which to engage. At Tradespace, we realized we can significantly improve commercialization outcomes by developing a broad network of stakeholders at large companies and SMEs. With access to that network and introductions when necessary, technology transfer offices are able to maximize the value they get from our marketplace.
3. Flexible Commercialization Approach
Universities are already embracing new approaches to commercialization. The emergence of programs at major universities providing start-up infrastructure and capital is an encouraging sign. To ensure they are getting the most value out of these approaches, universities need to adopt a framework to help choose the optimal commercialization approach for a given technology.
Too often, decisions on how to commercialize a technology are based on expediency – the researcher has a licensing offer from a company or has made up her mind to start a company. Without considering data on the market or the technology itself, these decisions often fail to maximize the value of IP.
As the chart above shows, Universities can apply a relatively simple framework to make decisions about commercialization. The strength and maturity of a technology closely predict a company’s appetite to license. At lower TRL levels, IP lawyers will raise red flags about commercial viability and defensibility. In these cases, co-development or start-up formation often makes more sense. In markets with high growth in new patenting, start-ups will likely have access to more funding and serve as an ideal vehicle to de-risk IP. Conversely, small or mature markets lend themselves to co-development with entrenched competitors looking to differentiate or capture more market share.
While other factors (e.g., existing licensing offers, inventor preferences) cannot be ignored, TTOs should start with this framework then make changes based on extenuating circumstances, instead of letting those circumstances dictate their entire strategy.
University technology transfer offices face considerable challenges. By finding ways to automate parts of the commercialization process, drive engagement by inventors, and effectively identify and engage companies, they can focus their time on the parts of their job that add the most value – developing commercialization strategies that benefit inventors, institutions, and companies. Even here, IP data can provide a framework to better structure deals and ensure value creation.
Learn more about Tradespace and University technology transfer: www.tradespace.io/autm
About the Author
A former management consultant, Alec led engagements focused on technology commercialization and M&A for Fortune 500 companies in the US, Europe, and the Middle East. Alec has structured and managed over $200M in commercialization deals across the Aerospace, Energy, Automotive, and Chemicals markets.
Alec has also worked closely with the a number of international governments to drive economic diversification and innovation through proactive IP Strategy. For more information, contact firstname.lastname@example.org