Two research universities – one in the US and one in Canada – have separately decided to give away certain intellectual property for free in a bid to speed technology commercialization at the institutions and stimulate the local economy.
The new programs, at the University of Ottawa and the University of Nebraska Medical Center, are believed to be the first of their kind at major research institutes in the US and Canada, and both schools hope to complete their first “free IP” deals by the end of the year, according to officials from both institutes.
The universities developed their programs independent of one another, and are taking slightly different approaches, although the crux of the programs in both cases is the same: transfer promising technologies from the laboratory into the hands of local companies by eschewing traditional up-front licensing negotiations and fees.
The University of Ottawa initiative, called the Technology Accelerator Program, is the brainchild of Tom Brzustowski, a professor of commercialization of innovation at the university’s Telfer School.
Brzustowski, who served for 10 years as president of Canada’s Natural Sciences and Engineering Research Council – an organization akin to the US National Science Foundation – said that he and his colleagues had witnessed a relatively paltry rate of successful university technology transfer in Canada.
“We were very concerned that the uptake of inventions arising out of research by industry was far too small, and that something had to be done about that, particularly for small businesses,” Brzustowski told BTW last week. “So I began keeping my eyes open, and I heard similar complaints in the US and the UK,” Brzustowski said.
“For me it was a very simple concept,” Brzustowski added. “I had heard that small businesses were finding access to university IP difficult for two reasons: they found it time-consuming, and they found it expensive. So my reaction was to try a pilot project in which we make the transfer very simple, and we make it cheap, as in zero.”
Brzustowski brought his idea to Joe Irvine, director of technology transfer at the University of Ottawa, who leveraged some internal funding from the University of Ottawa and the Ontario provincial government to help further develop Brzustowski’s plan into the Technology Accelerator Program.
Under the program, the University of Ottawa tech-transfer office will solicit a business and commercialization plan from a company that is interested in a particular technology. If the office finds the plans to be feasible, it will non-exclusively license the technology to the company for a period is 36 months royalty-free. After the 36-month period, royalty negotiations will kick in, and the company then has the option to switch to an exclusive license.
“The concept here is to do two things: Work in a small scope with engineering and physical sciences patents, and work with the local and regional economy so we can find small- or medium-sized companies from the local region that want to partner on the technology,” Irvine told BTW last week.
Irvine stressed that the program is best termed a pilot program and is in a very experimental, nascent stage. In addition, the program will only focus on technologies coming out of the school’s engineering program, primarily because Ottawa has strong software, telecommunications, and photonics industries.
He said that most of the life sciences-related technology coming out of the university is marketed nationally and internationally. Furthermore, he added, differences in the commercialization process of life sciences IP may make it a poor fit for the Technology Accelerator Program.
“One major difference is the half-life of a product,” Irvine said. “In engineering, software engineering, telecommunications, or even some photonics, the product half-life might be three to five years.” However, he said, “in the life sciences, sometimes you need 12 years before you can launch a product.”
An Open-Ended Approach
The University of Nebraska Medical Center, on the other hand, is testing whether a free IP model is suitable for the life sciences with its AdvanceNebraska program.
James Linder, president of UNeMed, the tech transfer arm of UNMC, said that he developed the AdvanceNebraska program over the last year in response to mounting criticism in the media that tech transfer offices were not getting technologies out into the marketplace because they were too focused on cutting the best financial deal for the university.
“We thought that one way to mitigate that criticism was to set up a program in which we would make technology available to a company if they had the right management, right business plan, and appropriate funding, and were willing to commit to a plan that would increase the number of employees here in Nebraska,” Linder told BTW last week.
”That addresses another issue that we have in this state of making sure that there are a number of opportunities for our citizens to work in a variety of industries,” added Linder, who also served as associate vice chancellor of research for UNMC. “So it’s a good way to address two or three problems with one program.”
Under the terms of the AdvanceNebraska program, UNeMed would solicit a business plan for a technology from interested companies, similar to the University of Ottawa’s program.
“Companies are interested in lower costs whenever they can find it.”
However, the timeframe during which there would be no fee depends on the technology, which may be one way to mitigate the concerns about the long product commercialization times associated with life sciences technologies.
“It could be anywhere from a year to five years, and it would depend on the business plan and what needed to be done with the technology,” Linder said. “There would be no fees, and during that time we’d expect that whoever took that license or option, however we structured it, would be establishing certain milestones. We wouldn’t want to give the technology to someone and have them do nothing with it, because that doesn’t benefit anyone.”
Linder also said that the free license would likely be exclusive, primarily because most companies, especially in the life sciences, prefer the peace of mind that an exclusive license brings. However, he noted, “certain research reagents and animal models are often licensed non-exclusively, and those would be good examples of areas in which we could do that here.”
The major difference, then, between a licensing deal through AdvanceNebraska and a traditional deal is that the up-front financial terms are pushed aside in the interest of moving the technology along the commercialization pipeline.
“If you had a technology where people were reluctant to invest, say, $50,000, $100,000, or $200,000 in up-front fees, but instead were willing to try and grow their business here in Nebraska, then we would view that as a success,” Linder said. “We would defer any financial benefit to the university to some years down the road.”
UNeMed will not eschew traditional licensing opportunities with out-of-state or international interests just to satisfy the AdvanceNebraska program, Linder said. However, “if there was a good financial opportunity in a faraway place, and a good opportunity for AdvanceNebraska, then today I would say the tie goes to AdvanceNebraska,” he added.
UNeMed also manages IP generated at the University of Nebraska-Omaha, but Linder said that UNeMed does not have the right to market UNO’s technologies through the AdvanceNebraska program. “UNO inventions would certainly be considered for this program,” he said. “We certainly have a good relationship with the people at UNO, and I think the people there would be very interested in fulfilling the same goals as [we are],” as would UN-Lincoln, which is a non-medical campus and has its own tech-transfer operation, Linder said.
“They’re aware of this program, but I think they’re watching to see what success we have with it before they embrace it,” he said.
Neither the University of Ottawa nor UNMC have transferred any technology under the new programs yet, but the initiatives are only in the nascent stage, according to both schools.
Irvine said that the University of Ottawa has discussed the program with several companies to gauge their potential interest. “Companies are interested in lower costs whenever they can find it,” he said, adding that the school expects that it will complete its first deals before the end of the year.
Similarly, UNMC is in talks with two undisclosed companies, one of which is already based in Nebraska and one of which is looking to relocate there. Linder added that if one of the deals pans out, in particular, it would be a “nice early success” for the program and for the Nebraska economy.
“Before we made the program public, I talked to the leadership of the Omaha chamber of commerce, and to the state department of economic development to get their thoughts on the program,” Linder said. “They were both enthusiastic as, effectively, it’s another arrow in their quiver if they’re trying to recruit business to Omaha and can talk about a positive relationship with the medical center.”