Transcript University Technology Transfer (USA) Success Stories

Development and
Commercialization of U.S.
University Research
Robert Pozner, Ph.D.
Beamish Development
[email protected]
At TUC: contact through Prof. A. Dollas (37228)
13 October 2010
© R. Pozner, 2010
U.S. Government Funding of University
Research (2009)
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NIH research support at U.S. universities, medical schools,
research institutions, independent hospitals and nonprofits:
 $21.48B; 50,033 awards
 Additional $4.82B in funding for 12,786 awards through
American Recovery and Reinvestment Act of 2009
http://report.nih.gov/award/organizations.cfm?ot=&fy=2009&state=US&ic=&fm=&orgid=
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NSF U.S. university research support
 $5.67B; 21,512 awards
http://dellweb.bfa.nsf.gov/AwdLst2/default.asp
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Total funding: $31.97B
Total awards: 84,331
U.S. University T2 data (2008)
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648 new commercial products introduced
5,039 total license and options executed
595 new companies formed
about 72 percent of new companies formed with the
primary place of business in the institution’s home
state
3,381 startup companies still operating as of the end
of FY2008
$51.47 billion total sponsored research expenditures
(U.S Government plus other sources)
Source: Association of University Technology Managers (AUTM) Survey (2008)
Why is Development and
Commercialization Relevant?
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University objectives
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Create and disseminate knowledge
Contribute to improving quality of life and economic
growth
Development and commercialization can support
mission for some research outcomes (5-10%)
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Alternate distribution channel for knowledge created
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Other channels include: teaching, publications, open source,
Creative Commons (http:/creativecommons.org)
When Does This Make Sense?
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Knowledge has commercial (financial)
potential
Potential for intellectual property (IP)
protection
Significant investment required to develop
and bring to market (for public benefit)
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Software - exception
Opportunity to attract research funding
Stakeholders
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Inventors
University (owns IP)
Corporate partners and investors
Government
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As funding source
As driver for economic development
Social benefit
What are the incentives?
1. Inventors
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Professors
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$
Fame & fortune
Opportunity to move early research forward
Entrepreneurial interest
COI
Students
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Jobs
$
Entrepreneurial interest
What are the motivations?
2. University
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Distribute knowledge
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Social benefit (improve quality of life)
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New source of research funds (incl. overhead)
Economic development – new company
formation (local), job creation
Attract and retain faculty
Generate discretionary income if successful
commercialization (<10%)
Recognition/reputation
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What are the incentives?
3. Companies and investors
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Companies and investors
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Increase revenue and profits
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Access to new technologies
 Strengthen existing market positions
 Develop new market opportunities
 Lower production costs
Limit competition
Reduced development risk, cost
 Specialized equipment, facilities
Relationships with university, professors
New breed of “Social Investors”
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Green Tech
What are the incentives?
4. Government
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Value for taxpayer investment in basic
research at universities
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New technologies for improving quality of
life
Economic development
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Job creation
Taxes – corporate, individual
Reduce unemployment burden
Infrastructure Supporting University
Technology Transfer (1)
 Holistic
– all pieces in place … now
 Legal
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Bayh-Dole Act (1980)
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Non-profit research organizations and small businesses
own IP created under U.S. Government funding
Must make effort to commercialize
Inventors share in any income from commercialization
U.S. Government rights
Infrastructure Supporting University
Technology Transfer (2)
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University attitudes, policies and resources
 Own (almost) all inventions (undergraduate …
except …)
 Investment in IP and reduction to practice
 Acceptable activity – with research and teaching
 Consistent with institutional objective: creation
and dissemination of knowledge
 COI
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Publication
Use of University facilities and resources, incl. students
Infrastructure Supporting University
Technology Transfer (3)
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Investment
 All stages
 Pre-seed/proof-of-concept, seed (“Valley of Death”), angel, VC
Business expertise and experience
 Entrepreneurs
 IP management and business development
Trained workers
 “Knowledge Economy” - Product development, production,
business, legal
Mentoring, networking
IP not owned by Universities
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Contractually obligated
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Facilities use agreement, Consulting agreements,
MTA
Made on own time without (significant) use of
University resources or funding
Undergraduates
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Mosaic  Netscape
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Marc Andressen – Univ. of Illinois National Center for
Supercomputing Applications
Browser graphical interface, inclusion of images, hyperlinks
PC and Mac versions (vs. UNIX)
Policies, plans and procedures (1)
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Ownership
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Disclosure forms
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You can’t transfer what you don’t own
Inventors
Funding
Invention description and applications
Prior art
Invention reporting to sponsors
COI
Policies, plans and procedures (2)
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Triage
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Attorney selection
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Informed decisions for investment (IP, T2 resources)
Inventor relationships
INVEST OR RELEASE
Technical expertise
Billing rate/cost management
Project management
Income distribution
Development and commercialization
pathways
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Public domain
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Sponsored research agreement/option
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publications, open source, Creative
Commons, GNU GPL
Single company
Multiple companies (research centers)
License to existing company
Start-up
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IP transferred through license agreement
What constitutes “success”?
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Research results and ideas generated by university
technical staff are nascent
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Science vs. technology
Very high risks
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Technology
Financial
Market
Often stepped development and investment
Driven by market opportunity, technology and business
development requirements, resource requirements and
availability
Successful outcomes for
Universities and inventors
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No interest from “market” (potential licensees and/or investors)
 Feedback
 Does not reduce scientific value or legitimacy
 May provide direction for future research
 Increase understanding of what is commercially interesting
Interest
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SRA/option/consulting
License to existing company (with/without SRA)
Form new company
What makes a good partnership
(win-win transactions)
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Parties get their needs met
Critical issues identified
“Satisfice” rather than maximize
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Communication
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multiple objectives
Before the deal
During negotiations
After the deal is done
Good faith
License Agreements
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License vs. assignment
“In the Public Interest: Nine Points to Consider in Licensing
University Technology” (2007)
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1. Universities should reserve the right to practice licensed inventions and
to allow other non-profit and governmental organizations to do so
2. Exclusive licenses should be structured in a manner that encourages
technology development and use
4. Universities should anticipate and help to manage technology transfer
related conflicts of interest
9. Consider including provisions that address unmet needs, such as those
of neglected patient populations or geographic areas, giving particular
attention to improved therapeutics, diagnostics and agricultural
technologies for the developing world
Success stories
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Better World Project (2006 -2009+)
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University of Florida: Gatorade
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Patent portfolio – license to existing company
UNC Chapel Hill: gene therapy vectors
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Know-how license (no patents) to existing company
Wake Forest University: vacuum assisted wound closure
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http://www.betterworldproject.org/reports.cfm
Patent portfolio – Asklepios BioPharmaceutical (start-up
company, non-traditional funding )
NC State University: SiC/GaN devices and process
technology
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Patent portfolio – Cree Research (start-up company)
Gatorade®
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University of Florida (“Gators”) Sports Physiology
Football players suffering heat-related injuries and problems
Fluids and electrolytes the lost through sweat , and carbohydrates used for energy
were not being replaced
Scientifically formulated a new, precisely balanced carbohydrate-electrolyte
beverage – Gatorade®
 Players were better able to deal with heat during practice and games; started
winning more games
 Inventors deal with Stokley-Van Kamp – eventually acquired by Pepsico
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Ownership dispute – lawsuit
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University gets 20% of sales - $100MM from 1972 until 2004
U.S. Government required publication of formula to foster competition
Gatorade® is currently available in 80 countries; more than 30 flavors
available in the U.S.; more than 50 flavors available internationally.
Vacuum Assisted Closure (VAC) of
wounds
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Wake Forest University School of Medicine
Negative pressure and sealed bandage
 Wounds heal 50% faster
Licensed to Kinetic Concepts, Inc. (KCI) in 1993
Commercial launch of VAC Therapy System in 2005
2008 market size: ~$4.5B; KCI 9month revenue: $1.4B
 Wake Forest received between $70MM and $90MM in
royalties
5 patent infringement lawsuits, validity challenges in U.S.
Germany
Gene therapy vectors
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Correction of single gene defect (mutation)
Delivery of payload without disruption of cell membrane
Viral vectors
Some genes too large to insert in viruses
UNC Gene Therapy Center developed hybrid (“chimeric”)
viruses capable of carrying larger payloads
Asklepios BioPharmaceutical spun out of university ~2004
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Targeted Duchenne Muscular Dystrophy – mutation of gene on X chromosome (males)
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Symptoms (due to death of muscle fibers) < age 5
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Average life expectancy: late teens to mid twenties
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Treatment consists of managing symptoms
Funded by MDA (non-profit organization)
Currently in clinical trials
Facilities use agreement with UNC
Wide bandgap semiconductors
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Formed in 1987 as Cree Research by grad students
from the laboratory of Dr. Robert Davis at NCSU
Wide bandgap semiconductor materials (SiC),
processes and structures
Application in semiconductor devices for high RF,
high temp, high voltage applications
U.S. Government funded research  IP owned by
NCSU
Cree, Inc.
IP and Technology Transfer
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Patent applications
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Owned and filed by NCSU
Cost reimbursed by Cree under license agreement
License agreement
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Exclusive rights – worldwide, all fields of use
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Right to sublicense
Equity (shares of company)
Royalties on sales of products
Other U&C terms, including development and
commercialization milestones
Cree, The Early Years
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F&F seed funding
Develop process technology to produce 3” boules of defectfree SiC
Sold wafers for research to universities and corporate research
labs
R&D to increase boule diameter (economics) and develop
devices for U.S. Government customers (funded by U.S.
Government)
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Reduced risk for private investment
Raise first round of funding
Cree sees the light
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LEDs
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SiC as substrate for GaN LEDs
Low energy consumption, long life
Tailor color of emitted light by doping and epitaxial
coatings
Displays (cellphones, arenas)
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Blue, green
***Consumer and commercial lighting***
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White!
Approximately 2% of worldwide lighting market now LED
Cree today
www.cree.com
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FY 2010 revenue: $867.3MM US (+53% year-to-year)
FY 2010 net income: $152MM (+402%)
4Q 2010 revenue: $264MM (+79%)
 LED products: $240MM
 RF products: $24MM
4Q 2010 net income: $52.8MM (+445%)
Market capitalization: $5.7B
Operations in USA (NC and CA), China, Hong Kong
Total employees worldwide: 4,300
Source: Cree 2010 Annual Report