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Berkeley Lab Merges Tech-Transfer, Patent Counsel Offices to Maximize Efficiency

Name: Cheryl Fragiadakis
Position: Department head, technology transfer division, Lawrence Berkeley National Laboratory, Berkeley, Calif.
Background: Business manager, energy and environment division, Lawrence Berkeley Lab; BS, chemical engineering, Colorado School of Mines; MBA, Haas School of Business, University of California, Berkeley.

Lawrence Berkeley National Laboratory said recently that it has merged its technology-transfer department with its office for intellectual property management, which houses internal patent counsel for the institution.
The combined unit now reports to tech-transfer head Cheryl Fragiadakis, who took a few moments last week to speak to BTW about the relatively unusual arrangement, how it might positively impact tech transfer at the US Department of Energy-funded institution, and how tech transfer at Berkeley Lab differs from that at other California research universities and national laboratories.
Tell me about the merger of the tech transfer and patent counsel offices at Berkeley Lab.
We have what would be considered sort of a traditional technology transfer activity very similar to that at other national laboratories and universities in that we take in reports of new inventions, try to evaluate those, and try to make contact with the private sector that could actually help develop the inventions and commercialize those for the benefit of the population.
Part of that overall process, in many cases, is developing an actual patent on a new invention. A lot of universities do this all externally, so they go to a law firm, hire a patent attorney through the law firm, and prosecute the patent through the USPTO that way. We have some in-house patent counsel, and up until the last few months, that activity has reported to our general counsel, so all the lawyers reported to the general counsel. We sort of came together at the highest level of the laboratory, at the director level. We do about half of our patents with in-house counsel, and about half externally. The only reason we really would go after patents, of course, is if we think there is a commercial opportunity for which a company needs patent protection — such as in a life sciences area — to actually justify the investment required to move something along.
In terms of perhaps improved communication, organizational efficiency, and alignment of goals, it made sense to combine both the business aspect — the licensing and the marketing — with the patenting, so there was close coupling of the activities. Both of those now report to me, and that way we can even more routinely field a team of a licensing person who is specializing in, for instance, life sciences, and a patent attorney who is a biologist. As a team they would go talk with the inventor and determine what the best strategy would be for that invention.
Is it common for university and non-profit tech-transfer offices to use out-of-house patent counsel?
The most common model that I’ve seen at universities is that they do not have in-house patent counsel. Most national labs do have in-house counsel, and I think that’s more for historical reasons. National labs had patent counsel even before the days of Bayh-Dole and other enabling legislation that allowed us to move forward with commercialization.
But we’ve found it to be very useful in being able to be a little more nimble in responding when a scientist has something coming up very quickly and we want to respond right away. Having that person in house sort of gives me that flexibility.
At schools or national labs that have in-house patent counsel, is it typically combined with the tech-transfer office?
I think that’s pretty new. The only other lab I am aware of that seems to have that combination is Brookhaven National Laboratory. Most of my counterparts that I’ve talked with throughout various labs in the US do not have that combination.
Did you have to restructure at all in terms of overlapping duties, or hiring new people?
Not too much. We are doing some hiring, but it’s more or less to replace vacancies that are coming up due to retirements or people leaving for other reasons.
The one area in which we have seen some consolidation is, oddly enough, in the accounting area. You have to pay your bills if you have outside law firms. You also need to take in money from licensees, and you need to make sure all that stuff gets sorted out, because things have to net out and have to be applied to the right cases. Ultimately, you’re going to give a distribution to inventors, and that’s based on the income that you netted from their particular inventions.
Law firms all bill in different ways, and sometimes the bills are more opaque than others. Licensees often pay in various ways. We’ve been able to get just one accountant to handle both sides of it, although we’ll probably have to hire an assistant for her. That’s an area where things were interrelated, but done separately, and now we can do them together. In the long term I think we’ll have a higher quality and I hope lower cost in doing all of that.
You said that about half of your patent counsel was external and half internal. Are there general guidelines for when you would choose to use one or the other?
Basically, we’re looking at a combination of workload, expertise, and whether or not a case has been licensed or has a high probability of being licensed in the near term. Often once it’s licensed, or incipient, a company would prefer to have somebody external doing their patent counsel, where they’re generally billed by hours. We also try to keep cases from the same research lab together whenever we can, because you build up some amount of expertise in the patent attorney and also a personal relationship with the inventor, and those are both very useful in more efficiently prosecuting future cases. So a little bit of it comes down to wherever the technology is originally.
Does your internal patent counsel have particularly strong areas of expertise?
We do try to focus it, and we have a person who has a biology background that we send most of the biotech-related stuff to. And we have a person who has a PhD in mechanical engineering, and we send most of the engineering stuff his way. Nano[technology] is very interesting because it spans a number of disciplines — it can be related to chemistry, biology, electronics, et cetera. I think we are developing some expertise in that area, but we do not have a nanotechnology expert here.
Does tech transfer at a national lab like Berkeley work in the same way as university tech transfer in that it retains the rights to IP from research done in Berkeley labs? Does the government retain some stake in that?
The Department of Energy’s National Lab System is dominated by a model they call ‘government-owned contractor-operated laboratories.’ That means, for instance, the government owns our laboratory, but the University of California is the contract operator. As part of that contract, the contractor, if they’re a non-profit, takes title to all inventions just like the university would under Bayh-Dole.
We operate in a way that would look to the outsider almost identical to the rest of the university world. There are other government labs — a few hundred in the US, most of them much smaller — that are run by government employees, and in that case, the government would take title to them. They still have technology transfer goals and responsibilities. There might be some differences in the licensing area, but they are probably more similar than they are different, and certainly more like a university than a private company. By that I mean the goals are more oriented to ‘Let’s get the technology out there and used,’ versus ‘Let’s optimize the bottom line for our shareholders,’ which is, of course, the appropriate approach from a company standpoint.
At Berkeley National Laboratory, though, the IP is controlled by the Regents of the University of California.
There are multiple national labs in California. Do they all contribute to the University of California’s tech-transfer revenues? How are revenues allocated at Berkeley National Lab?
It’s similar. The one thing that is different is that none of our income goes back to the state of California. The campuses do have to provide a California share. The rationale for that is that California has invested drastically in their facilities and in supporting all of these professors, and so on, whereas there is no California money going to the national labs. None of the buildings here were built by the taxpayers of California, and the people aren’t on the California payroll — we’re all paid for out of the DoE money for the lab.
Other than that it’s the same. We use the same royalty-sharing policy. [From] the money we get in, we take off the patent costs, we reimburse those, and of the net, we give 35 percent to our inventors; we use 15 percent for research within the inventor’s division; and the other 50 percent is at the discretion of the lab manager. In our case, he uses it for various kinds of research contributions, but it could be anyplace in the lab — it doesn’t have to come out of the inventor’s division. So it provides flexibility to start new things.

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