〈日本知財学会誌〉Vol.1 No.1 ― 2004 : 15 ― 21

Academic Technology Transfer
Terry A. Young, Consulting Editor Technology Innovation Group, Inc.

Academic technology transfer is the passage ofdevelopment of these inventions. This bold experi-knowledge from its creator to another person or

ment by the U.S. Congress was tremendously suc-organization for some purpose or public benefit.

cessful in achieving its goal of the commercializa-

Academic technology transfer occurs every day intion of university inventions. As a result, thea university, in the collegial exchange of research

Bayh-Dole Act inspired many other countries indata between faculty members; the knowledge

the 1990s to adopt their own systems for the com-passed from the teacher to the student; faculty

mercial application of university research results.

publications and reports; presentations of research

Accordingly today, “academic technology transfer”

results at conferences; expertise communicated tois generally understood to refer to the commer-

industry partners, and many other means.

cialization of university research results, and is

Academic technology transfer is the very heart ofdefined in this paper as the transfer of university-

the traditional missions of academia: education,

owned intellectual property rights（IPR）toresearch and public service.

industry for commercial application and publicbenefit.

1. A More Focused Definition

Academic research is the foundation for technology transfer, the “factory” that creates the poten-

A more focused definition of academic technolo-

tial “products” for commercial application. Somegy transfer has emerged in the last twenty years,

universities are focused upon education andperhaps with origins in the “Bayh-Dole Act of

instruction only, and not upon research; such insti-

1980,” an amendment to the United States patenttutions do not conduct sufficient research to gen-code. This legislation enabled U.S. universities toerate the quantity and the quality of innovation

claim ownership rights in intellectual property

that warrant the creation of offices to manage

arising from research funded by the U.S.

intellectual property and technology transfer. For

Government. To manage this intellectual property,

example, there were 2,363 four-year degree granti-

U.S. universities began to focus upon the protec-

ng institutions of higher education in the United

tion of their inventions through U.S. and interna-States in 20001. Yet, only an estimated 200 univer-tional patent systems in the 1980s, and to enter

sities in the United States accomplished sufficient

into contracts with industry for the commercial

research to warrant establishing a formal office or

ISSN 1349 ― 421X
蘓 2004 IPAJ All rights reserved.

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〈日本知財学会誌〉Vol.1 No.1 ― 2004

process to manage IPR and technology transfer2.

statement” as one of seven critical attributes of an

After more than twenty years of valuable expe-

exemplary TLO4. The TLO’s mission statement

riences, the international Association of University

should be brief, establishing its operational focus

Technology Managers（AUTM）today promotes

and setting the expectations of its customers. The

four primary reasons for academic technology

TLO’s mission should also be consistent with thetransfer:stated mission of the university. As an example,

・Facilitate the commercialization of research

the mission statement of the TLO at The Texas

results for the public goodA&M University System clearly identifies service

・ Reward, retain and recruit faculty

to research faculty as its primary mission: “The・ Induce closer ties to industry

TLO serves the faculty to transfer research・Generate income and promote economic

results to commercial application for public bene-

growth3

2. The Academic Technology Transfer
Process ― The Foundation

fit.”
2.2. Policies and Procedures
Next in importance in establishing a TLO are
clear policies and procedures to provide guidance

2.1. Mission Statement

to the technology transfer process. Policies must

To begin with, a university must determine if

be transparent to all of the university’s con-its research base warrants a dedicated technology

stituents（administrators, faculty, students, indus-transfer initiative or office. In many cases, a uni-

try partners, government, the public, etc.）.Clearlyversity may possess some research with commer-

defined and easily understood rules defining own-

cial potential, but not sufficient volume to create aership of intellectual property must be at the core

dedicated commercialization service. In suchof the policy. There is no “correct” way to definecases, the institution might consider:（i）partner-

ownership. In fact, it is defined and managed dif-

ing with other universities in the region to create

ferently around the world : some countries require

one program to serve all;（ii）assigning technolo-

institutional ownership of inventions; some coun-gy transfer activities to another office within thetries reserve ownership for the faculty inventors;

institution, such as the university’s research man-some countries stipulate that rights in inventions

agement office;（iii）partnering with local commu-

are jointly owned by the university and the facul-nity economic development organizations, such as

ty inventor; and some countries leave the determi-“techno marts”; or（iv）contracting with anothernation of ownership to each university. In thecapable organization to manage the limited oppor-

United States, each university to free to choose its

tunities.

own rule regarding IPR ownership; in every uni-

This paper assumes that the university has suf-

versity but one, the institution places ownership officient research to warrant the creation of a dedi-

IPR in the university（the exception is thecated technology transfer office or a “TLO”. A

University of Wisconsin）. Regardless of the

TLO must have a clear and well-understood mis-approach chosen, without clarity in the ownershipsion statement to guide its activities and decisions.

of IPR arising from academic research, technology

In a study recently conducted for the U.S.

transfer is not possible.

National Governors Association, Dr. Louis

Obviously, policies should address other issues

Tornatzky identified a “clearly articulated mission

critical to the success of academic technology

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Academic Technology Transfer

transfer programs, such as distribution of income,the disclosure process, assignment of responsibility for seeking patent protection, management of

3. The Academic Technology Transfer
Process ― Operations

potential conflicts of interest, and many more
requirements. As examples, the intellectual prop-

3.1. Identifying Innovations with Potential
Commercial Valueerty policies for most research―intensive universities in the United States and in many other coun-

University research may lead to innovations

tries are found on the AUTM website（www.

with potential commercial value. The process forautm.net）.

identifying innovations with commercial value
should be clearly defined and understood in writ-2.3. Establishment of a Technology

ten protocols6. A few U.S. universities employ indi-

Licensing Office（TLO）

viduals whose sole job function is to monitor facul-

The university’s mission statement and its IPR

ty research, and to collaborate with faculty topolicies impact the internal infrastructure to sup-identify research initiatives that may lead to inno-

porttransfer.

vations with potential commercial value. Yet, theInternationally, there are many different forms of

most prevalent model in the United States is touniversity technology transfer organizations, such

rely upon the faculty researchers themselves toas:（i）an office or department within the univer-voluntarily bring forward their innovations to thesity typically described as a Technology Licensing

attention of the TLO by submission of a formal

Office（TLO）, an Office of Technology Transfer“Disclosure of Invention.” The disclosure describes（OTT）or some similar name;（ii）an external

the unique technical features of the discovery, as

office, established either as a for-profit company

well as addresses certain questions impacting（“UNICO”（http ://www.unico.org.uk/）or a not-legal or contractual issues（correctly naming thefor-profit organization such as a foundation;（iii）

inventors, identifying research contracts thatboth an external organization and a university

funded the discovery, noting any publication

office working together; and（iv）an external

dates, and the like）. Most disclosure of invention

company to perform contract services for the uni-

forms utilized by U.S. universities are linked toversity on a project-by-project basis.

the AUTM website.

researchandtechnology

The size of a TLO typically is reflective of theUpon receipt of a disclosure, the TLO establish-

university’s research budget, the size of the sub-es a physical project file, and enters relevant infor-

sidy provided to the TLO by a third party（gov-mation for the project into an electronic database.

ernment）, or both. In 2002, the author published a

The project is assigned to an individual, typicallypaper entitled, “Financing Technology Licensing

called a project manager or licensing manager, to

Offices,” which indicated that funding for TLOs iswork closely with the inventor to develop a strate-

provided from many different sources from coun-gy for protecting and commercializing the inven-

try-to-country, including government funding, pri-tion.

vate venture capital, third party philanthropic
foundations, percentage of earnings and the like5.

3.2. Evaluating Disclosures of Invention
The first step in developing a commercialization
strategy is to evaluate the invention, encompassing five broad areas of critical importance:（i）17

〈日本知財学会誌〉Vol.1 No.1 ― 2004

ownership of the innovation;（ii）the innovation’s

external funding to prosecute an unlicensed inven-technical and development stage（an unprovention. Finally, the patent prosecution becomes evenidea versus a prototype, for instance）;（iii）

more expensive if international patent protection“patentability” of the innovation;（iv）the inven-is sought.

tion’s market potential and its competition; and（v）

TLOs secure funding for patent applications

the qualities of the inventor（enthusiasm, reputa-

from many different sources. In some countries,tion, etc.）.

the national or regional government provides the

The evaluation process may result in a number

funding. In some countries, philanthropic founda-of results（this list of examples is not all inclu-

tions provide money to TLOs for patent applica-sive）:

tions. In some countries, patent expenses are

・The TLO may determine that there is some

sometimes funded from royalty income accumulat-

barrier to commercialization that warrants clos-

ed by the TLO. Furthermore, even within one

ing the file. No further time, money or othercountry, the funding of patent expenses may be

resources are devoted to the project by the

managed differently from one university to the

TLO. The TLO may provide a “Release of

next. For instance, in the United States, while no

Rights” to the inventor upon request.

government funding is provided for patent ex-

・A corporate research sponsor may hold a firstright to pursue commercialization.

penses, TLOs pay such expenses from a variety ofsources: from royalty income,by the university

・The TLO may file a patent application immedi-

itself（typically in an annual patent budget）, or

ately to protect the innovation. This decisionfrom the inventor’s college or department. The

might be made upon the basis of a number ofmodel utilized varies from university to universi-

factors, such as a pending publication date,ty.

other institutions conducting very closely relat-

Likewise, the level of patent expenditures varies

ed research, the perceived market value of thegreatly from one institution to another, impacted

innovation and the like.

by factors such as the patent budget, the research・The TLO may enter into negotiations with abudget, the income stream to the TLO, the num-

licensee identified in the evaluation process,ber and quality of invention disclosures, and thebefore or after filing a patent application. In theinstitutional success in licensing. The AUTM

event that negotiations ensue before a patent

Annual Licensing Survey for FY2000 indicatedapplication is filed, a Nondisclosure Agreementthat among the Top 25 Research Universities in

is utilized to protect the “patentability” of thethe United States, legal expenses incurred by theinvention during negotiations.

TLO as a percentage of the institution’s sponsoredresearch ranged from 1.65 percent to approxi-

3.3. Protecting Intellectual Property Rights

mately .05 percent 7. Analyzed in another way,

Patent prosecution is an expensive process.

legal expenses incurred as a percentage of license

Very few if any TLOs have unlimited resources toincome among the Top 25 U.S. Research

file patent applications for every disclosure or

Universities in FY2000 ranged from almost 95 per-innovation received from faculty. Difficult deci-cent to less than 10 percent of the income stream.

sions must be made, as described above in the

Finally, analysis of data in the AUTM Licensing

evaluation process. Funds are placed “at risk” by

Survey for FY2000 reveals that the percentage ofthe university when it has no immediate source of

disclosures for which patent applications are filed

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Academic Technology Transfer

varies from institution to institution, ranging fromshops are devoted to how TLOs can better mar-

100% to 45% of invention disclosures8.

ket their portfolio of technologies “available forlicensing.” The obvious goal is to identify one or

3.4. Transferring University Innovations to
the Corporate Sector
Traditionally, faculty members claim “academic

more industry partners willing to devote time andvaluable resources to develop a commercial grade
product from university research. Other points tofreedom” to research topics of interest withinconsider in marketing follow:

their area of scientific expertise for the advance-

・When the research which led to the invention isment of knowledge and the education of students;

sponsored by an industry partner, then thethese research interests may have no relevance tochoice for transfer of the innovation is usually

the commercialization interests of the TLO.

determined by the research contract.

Industry-funded research is more likely to result

・TLOs must be talented in conducted market

in technology with commercial application than isresearch to help them identify market seg-

research funded from other sources. In a land-

ments, applications and potential licensees formark study published in the 2000 AUTM Journal,

an invention. Marketing information may comeeconomists Jerry and Marie Thursby reported thefrom a variety of sources including but not lim-

results of a survey of hundreds of companies thatited to the TLOs own list of contacts andhad licensed academic inventions. When asked

friends; databases（public databases and com-

how they became aware of the innovation eventu-

mercial database services）; and the inventor,

ally licensed from a university, the companies

the inventor’s students and the inventor’s for-most often cited the personal relationship between

mer students.

their employees and employees at the subject uni-・Upon identification of potential licensees, theversity. Second, the companies reviewed peer

TLOs marketing efforts only begin. The TLO

journals in the relevant field, as well as issued

must next identify the individuals whom to con-patents, and contacted the author or inventor iftact within the companies. potential corporate

there was commercial interest in the innovation

partners. Should first contact be made with thedescribed in the publication. Finally, the market-

corporate president, the director of marketing,ing effort of a TLO was of last and least impor-the director of R&D, or the chief scientist?

tance to the companies in identifying an innova-

There is no easy answer to this question othertion of importance to the company. These survey

than “enter as many doors as possible” in a

results indicate at least two important recommen-large corporation, hoping that one will open todations. First, as an “industry,” university technol-

the licensing opportunity!

ogy transfer professionals continually should seek

・Marketing tools such as invention briefing

better ways in which to market their portfolio of

papers, press releases, direct mail campaigns,

technologies. Second, the faculty inventors rather

participation in industry trade shows, posting ofthan the TLO are the most effective marketingthe technology briefings on the internet, and theagents, and subsequently, TLOs should support

like are often utilized by TLOs to identify andthe faculty members’ research interests in allreach the industry contact person.

9ways possible .

・Once identification of a contact person in the

Despite the results of the Thursbys study,

company has been made, “face-to-face” contact

many presentations at technology transfer work-

is most appropriate when possible to introduce
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〈日本知財学会誌〉Vol.1 No.1 ― 2004

the opportunity.

essary to induce the investments necessary tocommercialize the invention and benefit the

Finally, as stated above, the goal of all of thesepublic, the primary goal of technology transfer.

marketing efforts is to find a company willing toOnce a contract is negotiated and executed, thedevote the time and resources to the university

work of the technology transfer office is not con-innovation to the marketplace; negotiations withcluded. The TLO must record, monitor, manage

that prospective partner now begin.

and maintain the agreement. Contract management requirements include both fiscal require-3.5. Negotiating License Agreements

ments（payment of fees and royalties, reimburse-

The basic principle of negotiation is that thement of patent expenses, etc.）as well as perfor-

university transfers its intellectual property rights

mance milestones and other non-fiscal require-in an invention to a licensee（assuming an exclu-

ments. In the United States, the magnitude ofsive licensee）for consideration provided by thework in management of the portfolio of accumulat-

company to the university and a firm commitment

ed license agreements over time has resulted inby the licensee to take the product to the market.

the creation of both accounting offices and parale-

Many books have been written to explore thisgal offices within the larger TLOs. The scope ofvery basic principle, including topics such as draft-the work has grown as well to include such func-

ing license agreements and negotiation strategies.

tions as “accounts payable” and “accounts receiv-

Some basic principles of university licensing follow:

able,” auditing of licensees, protecting the universi-

・Because university innovations are embryonicty in the event of bankruptcy of the licensee,

or “early stage,” focus is often placed upon “per-assuring that the licensee achieves performance

formance milestones” to be achieved by themilestones, assuring that the licensee does notindustry partner in order to maintain or holdbecome delinquent in its payments, amending or

the license. Such milestones are critical toterminating existing contracts for any number of

10achieving the public mission of universities .

reasons as might be set forth in the agreement.

・The management of patent rights is an addi-

Additionally, electronic and “relational” databasetional focal point for negotiation. Universities

management systems ― focused upon the needs ofoften seek to license inventions before a patenttechnology transfer offices ― are now available tofiled for the invention has issued, impacting themanage all of these complex details.

value of the transaction, but placing risk upon
the licensee. In such case, the license agreement

4. Conclusions

typically terminates if the patent fails to issue.
・The “type” of technology often determines

In the introduction to this paper, academic tech-whether the university will negotiate for an

nology transfer was defined as “the transfer of

exclusive or non-exclusive license. Innovations

university ― owned intellectual property rightsthat may result in proprietary products are（IPR）to industry for commercial application andmost often licensed exclusively, while biotech

public benefit.” And as demonstrated in thistools, software and other basic technologies（aspaper, academic technology transfer is complex in

opposed to proprietary products）may be

implementation. Offices established to manage thislicensed non-exclusively.

process typically have many individuals and orga-・Furthermore, an exclusive license is often nec20

nizations to which they must be accountable inAcademic Technology Transfer

some way, such as the university administration,
the faculty inventors, industry, the government,
and the public. Many of these individuals andgroups have growing expectations, and in somecases, competing expectations. In general, it canbe concluded that the complexity of academic
technology transfer increases every year, as theimportance of intellectual property to the academy increases and as more variables outside thecontrol of the university are introduced. Despite
the many challenges, academic technology transfer is growing in importance and activity aroundthe world. The countries active in this arena ―such as the U.S. and Japan ― increase their performance statistics every year. Additionally, manyorganizations ― such as the World Bank, theWorld Intellectual Property Organization, private
philanthropic foundations, and government agencies ― are working to assist developing nations tocreate academic technology transfer programs.
The future for academic technology transfer isvery positive!
1 National Center for Education Statistics, http://www.nces.
ed.gov//pubs2002/digest2001/tables/PDF/table005.pdf
2 In FY2000, 167 U.S. universities, hospitals and research
institutes responded to the AUTM Licensing Survey.
3 www.autm.net

4 Louis G. Tornatzky, “Building State Economies by Promoting
University ― Industry Technology Transfer,” National Governors
A s s o c i a t i o n , 2 0 0 0 . h t t p : // w w w . n g a . o r g / c e n t e r / d i v i sions/1,1188,C̲ISSUE̲BRIEF^D̲653,00.html
5 See http://www.oecd.org/dataoecd/17/56/16212536.pdf,
pages 63 ― 67.
6 The written protocol for IPR management by the TLO for The
Texas A&M University System may be found at:
http://tlo.tamu.edu/ documents/INFO/tloprotocol.pdf
7 IPR evaluation and IPR valuation are quite different and distinct processes. Evaluation seeks to assess the opportunities for identifying a corporate partner for commercializationof an invention. Valuation seeks to assign a monetary value
to the innovation. In the United States, TLOs spend muchtime on evaluation, and very little time on valuation.
Evaluation is critical for making patenting decisions anddeveloping commercialization strategies, while valuation holds
little value to the TLO, as the monetary value of the invention
is determined by “what the market will bear,” and not by analytical economic studies.
8 A disclaimer must be made: there is a not a strict “one-toone” relationship for Disclosures filed with the TLO in any year
and the Patent Applications filed by the TLO in the same
year. For instance, a Disclosure filed with the TLO in 2003
might not be filed as a patent application until 2004.
Additionally, a single Disclosure filed with the TLO may resultin multiple patent applications, including but not limited toContinuation-in-Part Applications and Divisional Applications.
These circumstances account for four institutions among theTop 25 Research Universities filing more patent applications
than Disclosures of Inventions received in FY2000.
9 Jerry and Marie Thursby, “Industry Perspectives on Licensing
University Technologies; Sources and Problems,” Jerry andMarie Thursby, AUTM Journal, XII, 2000.（http://www.autm.
net/index̲ie.html）
10 The most predominant characteristic of university technology
is its “embryonic stage of development,” requiring partners
committed to a significant product development effort.
Richard Jensen and Marie Thursby, “Proofs and Prototypes
for Sale: The Tale of University Licensing,” Working Paper
6698, National Bureau of Economic Research, 1998.

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