Innovation in America:The Small versus Large University and the Changing Roles within them

Overview• Bayh-Dole Act of 1980

• History• Requirements• Licensing• Patentability

• How is Innovation done in America?• Innovation in Academia• Large Universities

• Advantages in how they operate their technology transfer program

Overview• Examples of strong tech transfer programs

• North Carolina State• Stanford University• University of Michigan

• Disadvantages• Small Universities

• Advantages in how they operate their technology transfer program• Examples of emerging and innovative small technology transfer

programs• Wilkes University• Lehigh University

Overview• How Innovation is done in corporate America• Examples of the roles large corporations play in sponsored

research and technology• Lockheed Martin• GE Research Labs• IBM

• The role of small companies in American innovation• Emerging trends in innovation• Conclusions

Pre-Bayh-Dole Act of 1980• The U.S. government owned the inventions for which they had

funded.• No rights of licensing were given to the inventor.• No money was given to the university if the invention had any

federal funding connected to it.

The Bayh-Dole Act of 1980• Laws designed to promote private sector development while using federally

funded research and development.• Bayh–Dole permits a university, small business, or non-profit institution to

elect to pursue ownership of an invention in preference to the government• Designed to remove barriers to free market.• Fulfilled a need to outline the relationship between joint ventures that

involved the federal government, academia, and industry.• It’s intent was to revive the economy with a uniform national policy and get

rid of the bureaucracy that slowed the process to commercialization.• It would ensure that inventions developed by the collaborations between

corporations and universities were brought to market.• Ownership was given back to the universities that created them and gave

freedom to negotiate license terms.

Bayh-Dole Act of 1980• Subject innovation made with federally funded R&D can now be retained

by universities so long as specific conditions are met.• Specific timeline for commercialization needs to be agreed upon by both

parties.• The government retains a nonexclusive, nontransferable, irrevocable, paid-up

license to practice or have practiced on behalf of the United States of any subject invention throughout the world.

• The government also retains march-in-rights, which allows the government to take nonexclusive, partially exclusive or exclusive licensing when reasonable time has been given to commercialize a subject innovation. This protects the public interest in not allowing a university to withhold a license for patents that can potentially have a negative effect on the health and safety of the community.

• The ownership of the patent under The Bayh-Dole Act is given to the grantee to promote discovery of new products and to be competitive on a global scale.

Bayh-Dole Act of 1980• This is not without limitations.• The government has the right to royal-free practice of patents on federally

funded innovations, which means they have to the right to use copyright material or intellectual property without the need to pay royalties or license fees for each use or per volume sold, or some time period of use or sales.

• This has raised the question on whether or not the government has a right to discounted pharmaceuticals.

• Entries for patents under the Bayh-Dole Act are not privileged. • Licensing under the Bayh-Dole Act is separate from the patent that is

retained by the university• The cost of the product increases due to the industry being required to pay

for licensing to use the patent as well as the costs to develop the rest of the process to create the final product.

• In the end these costs are paid for by the consumer.

Innovation• How is innovation done in America?

• Through sponsored research. This is defined as a contact between the academic entity and the firm. A sponsored research project supports research commissioned through the university and provides resources for infrastructure, graduate students, course releases and summer support for faculty members. In this way sponsored research is an important input to the technology transfer process. The majority of sponsored research is funded by government agencies (Bercovitz & Feldman, 2006).

• Sponsored research can take the form of grants or contracts.• Grants are more open-ended in terms of outcomes.• Contracts have a specific set of deliverables and explicit end results.

• The sponsored research agreement may have specified the ownership of the resulting intellectual property.

• It can also provide details for licensing of potential patents, division of royalties, and future sponsored projects.

Innovation• University spin-offs have become a favored mechanism by

which universities transfer technology to the commercial realm.

• Based in part on the examples of the Massachusetts Institute of Technology and Sanford University, which played an active role in the genesis of industrial clusters in Route 128 and Silicon Valley, respectively, university spin-offs are seen as a mean to transform local economies and a mechanism which provides a way to capture the benefits of proximity to research universities.

• A variety of definitions may be used to describe university spin-offs: firms formed by university, faculty, or staff; firms formed around a university license of intellectual property; startup firms that have joint research projects with the university; and firms started by students or post-docs around research conducted at the university (Bercovitz & Feldmann, 2006).

Innovation• University licenses have no locational constraints.• It has been found that entrepreneurship is a local phenomenon.• When technology transfer takes place most companies stay

near the university to benefit from the help given to them by the school and its research collogues. This is especially true for faculty who start companies.

• In 1999, AUTM (Association of University Technology Managers) reports that university licensing led to the formation of 344 new companies, with 82% operating in the same state as the university that provided the license (Bercovitz & Feldmann, 2006).

What is technology transfer?• Defined generally as “the transfer of the results of research

from universities to the commercial sector” (Bremer, 1999). It may also be more narrowly defined as “the process whereby inventions or intellectual property from academic research is licensed or conveyed through use rights to industry” (Schwartz, 2007).

• Different forms of technology transfer• The publication of research results in scientific journals and books.• The transfer of technology from universities to industry of

intellectual property in the form of patents or licenses and via start-ups of new companies.

Top 10 university technology transfer programs of 2010• Here are the top 10 technology transfer programs among universities included in the

AUTM survey, ranked by 2010 licensing income: • 1. Northwestern University, $180 million• 2. New York University, $178 million• 3. Columbia University, $147 million• 4. University of California System, $104 million• 5. Wake Forest University, $86 million• 6. University of Minnesota, $84 million• 7. Massachusetts Institute of Technology, $69 million• 8. University of Washington/Washington Research Foundation, $69 million• 9. Stanford University, $65 million• 10. University of Wisconsin-Madison/Wisconsin Alumni Research Foundation, $54 million

Large university advantages• Wide variety of majors and course options• Well-stocked libraries• Variety of housing opportunities• Well-funded sports programs• Wide range of academic choices and student activities• Famous facility• State-of-the-art research facilities• Money to hire top faculty• Large financial advantages with state funding

Large university activities• More research dollars from federal and state funds than a small

university• This allows the school to reinvest money from profits through its

partnerships with large corporations and then those companies will contribute to more research projects for the school.

• Corporations often times collaborate with these larger universities due to the fact that many R&D teams that are employed by corporations become complacent with the status quo and are unable to contribute to the creation of new knowledge.

Top Technology Transfer Programs• North Carolina State University has a facility called the Office of

Technology Commercialization and New Ventures (OTCNV). It was among the top 100 universities worldwide granted U.S. patents in 2015. The university had 25 patents submitted that year. Their facility for technology transfer has:

• New business incubator spaces.• Engineering Entrepreneurs Program, which has a full-immersion

educational environment for new product and business prototyping. • Entrepreneurship and New Product Developments which is a

required junior-level course for students in textile and fashion management, textile design, and fashion design. The students in this course exercise the skills to develop innovative textile products and design a business plan to take the product to market.

North Carolina State University• Technology Entrepreneurship and Commercialization (TEC) which teaches

graduate students from business and technical disciplines the innovation and entrepreneurial processes.

• Technology Commercialization and New Ventures which moves academic discoveries to the marketplace, resulting in new products, processes, and companies.

• Daugherty Endowment that provides small grants (maximum $25,000) to emerging companies and cutting-edge research projects at NC State to facilitate economic development impact in North Carolina.

• Small Business Technology Development Center providing businesses with one-on-one counseling to assist in the commercialization of innovative technologies.

• NC State Technology Incubator focuses on economic development for the state of

Stanford University• Stanford University has a facility called the Office of Technology Licensing that was

established in 1970. This office is responsible for managing the intellectual property assets of the university. Their mission is to “Turn scientific progress into tangible products, while returning income to the inventor and to the University to support further research.”

• Business Association of Stanford Entrepreneurial Students (BASES) is a nonprofit, student-run organization that has grown from five founding engineering students in 1996 to more than 5,000 members, including undergraduates, graduate students and faculty from all seven schools at Stanford. It fosters innovation and inspires next generation entrepreneurs.

• Innovation Farm Teams (iFarm Teams) is an experimental initiative that aims to accelerate the commercialization of new Stanford invented technologies while providing a unique educational experience to iFarm Team participants.

• SPARK is a partnership between Stanford University School of Medicine and volunteers from biotech, pharma, and healthcare investment. SPARK is working to make translational medicine a reality by promoting innovative research; educating students in technology, drug discovery, and drug development.

Stanford University• Stanford Angels & Entrepreneurs (SA&E) seeks to strengthen

Stanford’s entrepreneurial community by fostering relationships among potential investors and entrepreneurs.

• Stanford Venture Studio @ the Graduate School of Business is an entrepreneurial hub and collaborative learning community for students across all disciplines and at any stage of entrepreneurship.

• TomKat Center’s Innovation Transfer Program is for sustainable energy and helps Stanford inventor’s bridge the gap between research and commercialization (Website S. , 2016).

University of Michigan• University of Michigan’s technology transfers mission statement

is “to effectively transfer University technologies to the market so as to generate benefits for the University, the community and the general public.” The facility states online that they enhance research discoveries to encourage licensing and broad deployment with existing businesses and newly-formed U-M start-ups. U-M Tech Transfer has earned a reputation for performing among the top 10 of all universities. Their program includes the following services:

• Invention Reporting Facilitation that allows working with researchers and faculty to provide advice about potential tech transfer issues during research activities and to assist in the invention reporting process.

University of Michigan• Patenting and Other Protections provide guidance in planning an effective patent,

copyright, or trademark strategy and handle all implementation details during the protection stage.

• Start-up Assistance provide proactive assistance in analyzing potential opportunities to form a start-up based upon U-M technology and encourage this interaction during the early invention reporting process. Our skilled New Business Formation Staff also provides hands-on business assistance, project planning and links to funding and people resources.

• Licensing assist in technical and market assessments and actively market U-M technologies to industry partners.

• Legal Support has two tech transfer attorneys, in partnering with the Office of the General Counsel, provide legal guidance and assistance for all of our activities.

• Decision Support through our business and administrative staff provide information and guidance to conduct our business and expedite decisions by internal and external partners (Website U. o., 2016).

Disadvantages of a large university• Out-of-State students pay higher tuition• Non-residents not eligible for scholarships• Too many social and extracurricular activities• Large lecture classrooms• Mostly memorization type exams• Professors often have other jobs

Small University Advantages• Small class size• Hands on learning opportunities• Students assist in experiments• Teaching mission is mainly to engage students when at all

possible• No teaching assistants• Individually designed majors• Strong sense of community• Professors have the time to give detailed analysis of your work

Small university activities• A smaller university has the ability to make changes in small

time frames allowing them to stay ahead of market trends when necessary.

• Less layers in the decision process which allows faster decision making.

• Smaller universities are able to have their staff manage many jobs with less paid employees, using students and highly advanced labs to streamline many jobs.

• Not large areas of disconnect between offices on the campus like a large university.

Small technology transfer offices• Have a coordinator on board at the start. Members are so busy and thinly

stretched in their own home institutions that administration often ends up at the bottom of the pile. A coordinator is key to ensuring that the required grant reporting and other network administrative tasks get done.

• Meet face-to-face often, especially at the beginning. Approximately a year’s worth of monthly face-to-face meetings, to establish a relationship of trust.

• Implement electronic sharing resources early, such as a web site with a member-only section, a shared IP database such as Inteum (website, Tech Transfer Central, 2008), and a private list-serv.

• Work very hard to build trust, respect and camaraderie. Refer to any normal non-distributed office. Individuals go for lunch together, take coffee breaks together and stop by each other’s offices to chat on their way to a meeting. That contact helps create a healthy internal atmosphere in which people can help each other. When you are dispersed over a large geographical area, you have to work extra hard to create that sort of environment. (website, Tech Transfer Central, 2008)

Examples of small university technology transfer programs• Wilkes University is an example of a small school with a technology transfer

program. Here are the steps being taken to evolve into a tech transfer office.• Establishing a business incubator in the Luzerne Bank Building on Public

Square in Wilkes-Barre. The first business to be housed in the incubator will be announced early in September. The incubator will be a resource for launching Wilkes University student, faculty and staff businesses. 

• Launching a Technology Transfer Office at Wilkes. This office will help to facilitate business and technology ideas proposed by students, faculty and staff, translating them into commercially viable enterprises. 

• Infuse entrepreneurship studies across the curriculum. Although business and entrepreneurship courses are housed in the Sidhu School of Business and Leadership, the Kirby Center will lead efforts to incorporate them as part of other disciplines. For example, senior project teams in Wilkes engineering division already include a business student. Such synergies will be expanded to include other majors (Mayk, 2014).

Lehigh University• Lehigh University is another small school, this university has a technology transfer program and

partnerships with many companies in its community. Their staff is made up of only four people and one is a student.

• The Office of Technology Transfer (OTT) at Lehigh University (LU) manages, protects and licenses to industry, the intellectual property developed and created at Lehigh, while serving faculty, staff and students in all aspects of intellectual property. More, specifically, OTT:

• protects LU Intellectual Property (IP)• markets & licenses university technologies• negotiates material transfer, confidentiality & license agreements• supports regional, state and national economic development• promotes new and existing industry and government relationships• consults with sponsored research on IP aspects of research contracts• ensures university compliance with federal regulations related to IP• educates the university community regarding IP and tech-transfer process (website, Office of

Technology Transfer, 2016).

How is innovation done in corporate America?• Start-up company• Lean business model• Launching an accelerator is a common way for larger companies to

advance their knowledge leveraging in emerging technologies like: social, mobile, analytics and cloud.

• Hackathons and hack days which are defined as time-defined, problem solving engagements with creative minds to solve technical, business or social issues that the company encounters.

• Corporations often pair up with entrepreneur-focused universities with R&D programs to open up additional avenues of exploration and testing beyond corporate R&D labs. These universities have entrepreneur-friendly faculty and research programs that help large corporations in the long run (Madanmohan, 2015).

Examples of large corporations • Lockheed Martin is a global security and aerospace company that employs

approximately 98,000 people worldwide, and is primarily engaged in research, design, development, manufacture, integration, and sustainment of advanced technology systems, products and services. They have a partnership with the University of Colorado and have sponsored $3 million over the next four years to establish new academic programs focused on radio frequency. (Website L. M., 2016)

• GE Research Labs is a multinational conglomerate corporation. It has segments in power and water, gas, aviation. Healthcare, transportation and capital which caters to the needs of financial service, medical devices, life sciences, pharmaceutical, automotive, software development, and engineering industries. GE is now partnered with Northeastern University as part of a government program set by the Department of Education to increase students access to innovative, high-quality, postsecondary education St. Martin, Greg (2016, August 16). Northeastern to partner with GE in a new federal education innovation program. Retrieved from (Website N. U., 2016)

Examples of large corporations • IBM, International Business Machines Corporation is an

American multinational technology company. IBM manufactures and markets computer hardware, middleware and software, and offers a hosting of consulting services in areas ranging from mainframe computers to nanotechnology. Fulfilling a vision that South Carolina State had to create a public/private partnership in a higher education institute, IBM and the University of South Carolina built a $25 million dollar center designed to facilitate research efforts between the two partners, with a concentration on computing technologies and data analytics demanded by global businesses. Burris, Roddie (2016, April 15). University of South Carolina, IBM, Partner to Launch Innovation Center. Center for Digital Education Converge. Retrieved from (Burris, 2016)

The role of small companies in American innovation• Small business develop more patents per employee than large

businesses.• Small businesses has developed:

• The airplane• Air-conditioning• DNA fingerprinting• Oral contraceptives• The safety razor• Strobe lights• The zipper• Amazon

The role of small companies in American innovation• Small businesses offer environments that appeal to individuals

with talent to invent new products or improve the way things are done.

• The research tends to be focused from small companies.• Compensation structures reward top performers.• According to one SBA study, the supportive environments of

small firms are roughly thirteen times more innovative per employee than the less innovation-friendly environments in which large firms traditionally operate.

• This type of innovation by small companies and universities triggers an interest by larger corporations to obtain this technology and that is where technology transfer begins.

Emerging trends in innovation• Small business is the source of innovation with incubation type

environments and small overhead.• E-commerce was established through a small business model

like Amazon.• Small universities are developing technology transfer programs

to add their ease of use model that smaller schools can offer to developing trends.

• Large corporations are taking advantage of the innovation in universities to move forward their own R&D projects and investing in what appears to be viable research established by universities.

Conclusions• Universities are a valuable resource to the innovation in

America.• The Bayh-Dole Act of 1980 provided a much needed financial

opportunity to researchers and universities while allowing the government to recoup at the least, its initial investment.

• The partnership between universities and corporations benefits both parties in many different ways.

• There will always be strengths and weaknesses of larger and smaller universities, the idea is to find the best fit for your company’s individual needs.

Thank you!

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