Worth Reading: IP Negotiations Advice, Universities as Open Innovation "Losers," the Need for Better Tech Transfer Metrics, Royalty-Based Fiscal Cliffs, and Crowdsourced Soldiers in the War on Patent Trolls
Unlocking Intellectual Property: Principles for Responsible Negotiation: Published by the nonprofit FasterCures, this paper provides excellent recommendations for IP negotiations. Although focused on biomedical advances, the principles apply to any technology area. My favs include:
- Identify and calibrate your expectations.
- Don’t let fear paralyze you.
- Go into negotiations with knowledge of the players, the “market,” and the context.
- Make informed decisions about what you need to protect and why based on actual risks, not perceptions.
- Take advantage of existing guidelines and reports, including those from Stanford (and co-signed by several other top research universities), the National Institutes of Health (NIH), and the Organisation for Economic Cooperation and Development — BTW, we at Fuentek also have our own insights on licensing negotiations that you might find useful.
- Share what works.
Developed by a small panel of tech transfer, innovation management, and biotech research experts that was moderated by Drs. Robert Cook-Deegan of Duke University’s Institute for Genome Sciences & Policy and Maria Freire who recently joined the NIH Foundation, this paper is definitely worth reading.
Are Universities, Tech Transfer Units Open Innovation Losers?: To be honest, I was hesitant to include this one, given author Stefan Lindegaard‘s discussion of university TTOs as “slow and bureaucratic to deal with and they price their assets much higher than the value seen by the companies thus requiring lots of effort to land reasonable deals.” Unfortunately, this perception is understandable. But I’m happy to say that the trend is shifting. And I’m speaking from first-hand experience:
- Many universities are recognizing that sponsored research agreements (SRAs) may have more value for them than licensing revenue, and we’ve helped universities implement new approaches to establishing SRAs. (More on that in the coming months.)
- As part of a live version of our webinar for tech transfer offices on implementing open innovation, we’ve heard from research institutes that they see the logic of participating with external parties earlier in the invention process to help ensure that the innovations have more relevance and value.
- Universities are reformulating the language in their SRAs to be less restrictive on IP.
- Universities also are working to make their IP available for licensing more quickly and at a lower cost.
It takes time, but the shift is under way.
BTW, there is some interesting commentary (besides my own ) on Stefan’s blog post, so be sure to scroll down to check it out. Better yet, join the conversation yourself!
Improving University Technology Transfer and Commercialization: Published by The Brookings Institution, this paper by Darrell West examines the “low ROI [for federal R&D, based on licensing fees] and argues that part of the problem is that the focus on patents, licenses, and startups places too much emphasis on outputs as opposed to outcomes.” As I noted in a discussion in the AUTM group on LinkedIn, West’s paper is a good argument for why tech transfer metrics need to evolve. Fortunately, many universities are expanding how they measure their performance. It’s also good to see the new metrics being gathered in AUTM’s annual survey. By considering data such as product sales and employment among startups, tech transfer metrics can better reflect economic impact.
Universities Struggle with Falling Invention Royalties: This article in USA Today discusses schools, such as the University of Minnesota, the University of Iowa, and Northwestern University, that are facing their own fiscal cliff — one caused by expiring patents. These types of articles always emerge when AUTM publishes its annual survey. But it reminded me that a TTO can minimize the “damage” of these stories by setting proper expectations before they hit newsstands.
When universities win the licensing lottery, many “lay people” assume that this revenue flow will continue indefinitely and are surprised and dismayed when they read in the papers that it won’t. Of course, TTOs know that it won’t, and they know it could be 20 years before they get such a hit again. Many are smart enough to use the windfall to build up their nest egg. They use the winnings to invest in bridging the valley of death as well as pursuing other licensing opportunities that, although not as wildly successful as the one huge hit, will produce revenue into the future. They staff their office according to the number of incoming invention disclosures, not licensing revenue.
So my advice is: Tell people well in advance that you’re ready for the drop in revenue. A year before your big hit expires, start talking (blogging, tweeting, press release’ing) about how you’ve planned for the drop in revenue. The reporters still are likely to write about the horrors of the cliff, but your laying the groundwork might help make it a positive “look how forward-thinking and proactive this university is” type of story. (And everyone loves that kind of story, as MIT surely can attest, given the nice press they got recently from The New York Times.)
And to conclude this month’s summary, a short comment on a long article…
The New Cold War: On the Frontlines of the Costliest Battle in the High-Tech World: This story in St. Louis, Missouri’s Riverfront Times provides a good overview of how the Patent Wars got to the current problematic state. Furthermore, it reports on a neat twist on crowdsourcing to combat patent trolls. Sounds good to me! (Thanks to @vloise for tweeting this article.)
Happy New Year!