International Journal of Intellectual Property Law, Economy and Management 1 (2005) 13–18

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

Academic technology transfer is the passage of knowledge from its creator to another person or organization
for some purpose or public benefit. Academic technology transfer occurs every day in a university, in thecollegial exchange of research data between faculty
members; the knowledge passed from the teacher tothe student; faculty publications and reports; presentations of research results at conferences; expertise communicated to industry partners, and many other means.
Academic technology transfer is the very heart of the
traditional missions of academia: education, researchand public service.

1. A More Focused Definition
A more focused definition of academic technology
transfer has emerged in the last twenty years, perhaps
with origins in the “Bayh-Dole Act of 1980,” anamendment to the United States patent code. This legislation enabled U.S. universities to claim ownershiprights in intellectual property arising from research
funded by the U.S. Government. To manage this intellectual property, U.S. universities began to focus upon
the protection of their inventions through U.S. andinternational patent systems in the 1980s, and to enter
into contracts with industry for the commercial development of these inventions. This bold experiment by
the U.S. Congress was tremendously successful inachieving its goal of the commercialization of university inventions. As a result, the Bayh-Dole Act inspired
many other countries in the 1990s to adopt their own
systems for the commercial application of university
research results. Accordingly today, “academic technology transfer” is generally understood to refer to thecommercialization of university research results, and isdefined in this paper as the transfer of universityowned intellectual property rights (IPR) to industry forcommercial application and public benefit.

ISSN 1349-7723© 2005 IPAJ All rights reserved.

Academic research is the foundation for technology
transfer, the “factory” that creates the potential “products” for commercial application. Some universities
focus upon education and instruction only, and notupon research; such institutions do not conduct sufficient research to generate the quantity and the qualityof innovation that warrant the creation of offices tomanage intellectual property and technology transfer.
For example, there were 2,363 four-year degree granting institutions of higher education in the United Statesin 2000.1 Yet, only an estimated 200 universities in the
United States accomplished sufficient research to warrant establishing a formal office or process to manage
IPR and technology transfer.2
After more than twenty years of valuable experiences, the international Association of University
Technology Managers (AUTM) today promotes four
primary reasons for academic technology transfer:• Facilitate the commercialization of research results
for the public good
• Reward, retain and recruit faculty• Induce closer ties to industry• Generate income and promote economic growth3

2. The Academic Technology Transfer
Process — The Foundation
2.1. Mission Statement
To begin with, a university must determine if its
research base warrants a dedicated technology transfer
initiative or office. In many cases, a university may
possess some research with commercial potential, but
not sufficient volume to create a dedicated commercialization service. In such cases, the institution might
consider: (i) partnering with other universities in theregion to create one program to serve all; (ii) assigningtechnology transfer activities to another office within
the institution, such as the university’s research man-13

T. A. Youngagement office; (iii) partnering with local community
economic development organizations, such as “techno
marts”; or (iv) contracting with another capable organization to manage the limited opportunities.
This paper assumes that the university has sufficientresearch to warrant the creation of a dedicated technology transfer office or a “TLO”. A TLO must have aclear and well-understood mission statement to guideits activities and decisions. In a study recently conducted for the U.S. National Governors Association,
Dr. Louis Tornatzky identified a “clearly articulated
mission statement” as one of seven critical attributesof an exemplary TLO.4 The TLO’s mission statement
should be brief, establishing its operational focus andsetting the expectations of its customers. The TLO’s
mission should also be consistent with the stated mission of the university. As an example, the mission
statement of the TLO at The Texas A&M University
System clearly identifies service to research faculty as
its primary mission: “The TLO serves the faculty totransfer research results to commercial application for
public benefit.”
2.2. Policies and Procedures
Next in importance in establishing a TLO are clear
policies and procedures to provide guidance to thetechnology transfer process. Policies must be transparent to all of the university’s constituents (administrators, faculty, students, industry partners, government,
the public, etc.). Clearly defined and easily understood
rules defining ownership of intellectual property mustbe at the core of the policy. There is no “correct” wayto define ownership. In fact, it is defined and managed
differently around the world: some countries requireinstitutional ownership of inventions; some countries
reserve ownership for the faculty inventors; somecountries stipulate that rights in inventions are jointly
owned by the university and the faculty inventor; andsome countries leave the determination of ownershipto each university. In the United States, each university
to free to choose its own rule regarding IPR ownership; in every university but one, the institution places
ownership of IPR in the university (the exception is
the University of Wisconsin). Regardless of theapproach chosen, without clarity in the ownership of
IPR arising from academic research, technology transfer is not possible.
Obviously, policies should address other issues critical to the success of academic technology transfer programs, such as distribution of income, the disclosure
process, assignment of responsibility for seeking
patent protection, management of potential conflicts of

14

interest, and many more requirements. As examples,the intellectual property policies for most researchintensive universities in the United States and in manyother countries are found on the AUTM website(www.autm.net).
2.3.

Establishment of a Technology Licensing Office(TLO)
The university’s mission statement and its IPR policies
impact the internal infrastructure to support researchand technology transfer. Internationally, there aremany different forms of university technology transferorganizations, such as: (i) an office or department
within the university typically described as aTechnology Licensing Office (TLO), an Office ofTechnology Transfer (OTT) or some similar name; (ii)an external office, established either as a for-profit
company (“UNICO” = http://www.unico.org.uk/) or anot-for-profit organization such as a foundation; (iii)both an external organization and a university officeworking together; and (iv) an external company to perform contract services for the university on a projectby-project basis.
The size of a TLO typically is reflective of the university’s research budget, the size of the subsidy provided to the TLO by a third party (government), or
both. In 2002, the author published a paper entitled,“Financing Technology Licensing Offices,” whichindicated that funding for TLOs is provided frommany different sources from country-to-country,
including government funding, private venture capital,
third party philanthropic foundations, percentage of
earnings and the like.5

3. The Academic Technology Transfer
Process — Operations
3.1.

Identifying Innovations with Potential
Commercial Value
University research may lead to innovations withpotential commercial value. The process for identifying innovations with commercial value should beclearly defined and understood in written protocols.6 A
few U.S. universities employ individuals whose sole
job function is to monitor faculty research, and to collaborate with faculty to identify research initiatives
that may lead to innovations with potential commercial
value. Yet, the most prevalent model in the UnitedStates is to rely upon the faculty researchers themselves to voluntarily bring forward their innovations to
the attention of the TLO by submission of a formal“Disclosure of Invention.” The disclosure describes

Academic Technology Transfer

the unique technical features of the discovery, as wellas addresses certain questions impacting legal or contractual issues (correctly naming the inventors, identifying research contracts that funded the discovery, noting any publication dates, and the like). Most disclosure of invention forms utilized by U.S. universities
are linked to the AUTM website.
Upon receipt of a disclosure, the TLO establishes aphysical project file, and enters relevant information
for the project into an electronic database. The projectis assigned to an individual, typically called a project
manager or licensing manager, to work closely with
the inventor to develop a strategy for protecting andcommercializing the invention.
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) ownership of theinnovation; (ii) the innovation’s technical and development stage (an unproven idea versus a prototype, forinstance); (iii) “patentability” of the innovation; (iv)
the invention’s market potential and its competition;and (v) the qualities of the inventor (enthusiasm, reputation, etc.).
The evaluation process may result in a number ofresults (this list of examples is not all inclusive):• The TLO may determine that there is some barrier tocommercialization that warrants closing the file. No
further time, money or other resources are devoted
to the project by the TLO. The TLO may provide a“Release of Rights” to the inventor upon request.
• A corporate research sponsor may hold a first rightto pursue commercialization.
• The TLO may file a patent application immediately
to protect the innovation. This decision might bemade upon the basis of a number of factors, such asa pending publication date, other institutions conducting very closely related research, the perceived
market value of the innovation and the like.
• The TLO may enter into negotiations with a licensee
identified in the evaluation process, before or after
filing a patent application. In the event that negotiations ensue before a patent application is filed, aNondisclosure Agreement is utilized to protect the“patentability” of the invention during negotiations.
3.3. Protecting Intellectual Property Rights
Patent prosecution is an expensive process. Very few if
any TLOs have unlimited resources to file patentapplications for every disclosure or innovation
received from faculty. Difficult decisions must be

made, as described above in the evaluation process.
Funds are placed “at risk” by the university when it
has no immediate source of external funding to prosecute an unlicensed invention. Finally, the patent prosecution becomes even more expensive if international
patent protection is sought.
TLOs secure funding for patent applications frommany different sources. In some countries, the nationalor regional government provides the funding. In somecountries, philanthropic foundations provide money to
TLOs for patent applications. In some countries, patent
expenses are sometimes funded from royalty income
accumulated by the TLO. Furthermore, even within
one country, the funding of patent expenses may be
managed differently from one university to the next.
For instance, in the United States, while no government funding is provided for patent ex-penses, TLOs
pay such expenses from a variety of sources: from royalty income, by the university itself (typically in anannual patent budget), or from the inventor’s college
or department. The model utilized varies from university to university.
Likewise, the level of patent expenditures varies
greatly from one institution to another, impacted byfactors such as the patent budget, the research budget,the income stream to the TLO, the number and qualityof invention disclosures, and the institutional successin licensing. The AUTM Annual Licensing Survey for
FY2000 indicated that among the Top 25 Research
Universities in the United States, legal expenses
incurred by the TLO as a percentage of the institution’s sponsored research ranged from 1.65 percent toapproximately .05 percent.7 Analyzed in another way,legal expenses incurred as a percentage of license
income among the Top 25 U.S. Research Universities
in FY2000 ranged from almost 95 percent to less than
10 percent of the income stream. Finally, analysis ofdata in the AUTM Licensing Survey for FY2000
reveals that the percentage of disclosures for whichpatent applications are filed varies from institution to
institution, ranging from 100% to 45% of invention
disclosures.8
3.4.

Transferring University Innovations to the
Corporate Sector
Traditionally, faculty members claim “academic freedom” to research topics of interest within their area of
scientific expertise for the advancement of knowledge
and the education of students; these research interests
may have no relevance to the commercialization interests of the TLO. Industry-funded research is more likely to result in technology with commercial application

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T. A. Youngthan is research funded from other sources. In a landmark study published in the 2000 AUTM Journal,
economists Jerry and Marie Thursby reported theresults of a survey of hundreds of companies that hadlicensed academic inventions. When asked how they
became aware of the innovation eventually licensed
from a university, the companies most often cited thepersonal relationship between their employees andemployees at the subject university. Second, the companies reviewed peer journals in the relevant field, as
well as issued patents, and contacted the author orinventor if there was commercial interest in the innovation described in the publication. Finally, the marketing effort of a TLO was of last and least importanceto the companies in identifying an innovation ofimportance to the company. These survey results indicate at least two important recommendations. First, as
an “industry,” university technology transfer professionals continually should seek better ways in which tomarket their portfolio of technologies. Second, the faculty inventors rather than the TLO are the most effective marketing agents, and subsequently, TLOs should
support the faculty members’ research interests in all
ways possible.9
Despite the results of the Thursbys study, many presentations at technology transfer workshops are devoted to how TLOs can better market their portfolio oftechnologies “available for licensing.” The obvious
goal is to identify one or more industry partners willing to devote time and valuable resources to develop acommercial grade product from university research.
Other points to consider in marketing follow:• When the research which led to the invention issponsored by an industry partner, then the choice fortransfer of the innovation is usually determined by
the research contract.
• TLOs must be talented in conducted market research
to help them identify market segments, applications
and potential licensees for an invention. Marketing
information may come from a variety of sources
including but not limited to the TLOs own list ofcontacts and friends; databases (public databases andcommercial database services); and the inventor, theinventor’s students and the inventor’s former students.
• Upon identification of potential licensees, the TLOs
marketing efforts only begin. The TLO must next
identify the individuals whom to contact within thecompanies. potential corporate partners. Should firstcontact be made with the corporate president, thedirector of marketing, the director of R&D, or thechief scientist? There is no easy answer to this ques-16

tion other than “enter as many doors as possible” ina large corporation, hoping that one will open to thelicensing opportunity!
• Marketing tools such as invention briefing papers,
press releases, direct mail campaigns, participation
in industry trade shows, posting of the technology
briefings on the internet, and the like are often utilized by TLOs to identify and reach the industry
contact person.
• Once identification of a contact person in the company has been made, “face-to-face” contact is mostappropriate when possible to introduce the opportunity.
Finally, as stated above, the goal of all of these marketing efforts is to find a company willing to devote
the time and resources to the university innovation to
the marketplace; negotiations with that prospective
partner now begin.
3.5. Negotiating License Agreements
The basic principle of negotiation is that the university
transfers its intellectual property rights in an invention
to a licensee (assuming an exclusive licensee) for consideration provided by the company to the university
and a firm commitment by the licensee to take theproduct to the market. Many books have been written
to explore this very basic principle, including topics
such as drafting license agreements and negotiation
strategies. Some basic principles of university licensing follow:• Because university innovations are embryonic or“early stage,” focus is often placed upon “performance milestones” to be achieved by the industry
partner in order to maintain or hold the license. Suchmilestones are critical to achieving the public mission of universities.10• The management of patent rights is an additional
focal point for negotiation. Universities often seek tolicense inventions before a patent filed for the invention has issued, impacting the value of the transaction, but placing risk upon the licensee. In such case,the license agreement typically terminates if thepatent fails to issue.
• The “type” of technology often determines whether
the university will negotiate for an exclusive or nonexclusive license. Innovations that may result in proprietary products are most often licensed exclusively, while biotech tools, software and other basic
technologies (as opposed to proprietary products)
may be licensed non-exclusively.
• Furthermore, an exclusive license is often necessary
to induce the investments necessary to commercial-

Academic Technology Transfer

ize the invention and benefit the public, the primary
goal of technology transfer.
Once a contract is negotiated and executed, the workof the technology transfer office is not concluded. The
TLO must record, monitor, manage and maintain theagreement. Contract management requirements
include both fiscal requirements (payment of fees androyalties, reimbursement of patent expenses, etc.) as
well as performance milestones and other non-fiscal
requirements. In the United States, the magnitude ofwork in management of the portfolio of accumulated
license agreements over time has resulted in the creation of both accounting offices and paralegal offices
within the larger TLOs. The scope of the work has
grown as well to include such functions as “accounts
payable” and “accounts receivable,” auditing oflicensees, protecting the university in the event ofbankruptcy of the licensee, assuring that the licensee
achieves performance milestones, assuring that thelicensee does not become delinquent in its payments,
amending or terminating existing contracts for any
number of reasons as might be set forth in the agreement. Additionally, electronic and “relational” database management systems — focused upon the needsof technology transfer offices — are now available tomanage all of these complex details.

Intellectual Property Organization, private philanthropic foundations, and government agencies — areworking to assist developing nations to create academic technology transfer programs. The future for academic technology transfer is very positive!

References
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4. Conclusions
In the introduction to this paper, academic technology
transfer was defined as “the transfer of universityowned intellectual property rights (IPR) to industry forcommercial application and public benefit.” And as
demonstrated in this paper, academic technology transfer is complex in implementation. Offices establishedto manage this process typically have many individuals and organizations to which they must be accountable in some way, such as the university administration, the faculty inventors, industry, the government,
and the public. Many of these individuals and groups
have growing expectations, and in some cases, competing expectations. In general, it can be concluded
that the complexity of academic technology transfer
increases every year, as the importance of intellectual
property to the academy increases and as more variables outside the control of the university are introduced. Despite the many challenges, academic technology transfer is growing in importance and activity
around the world. The countries active in this arena —such as the U.S. and Japan — increase their performance statistics every year. Additionally, many organizations — such as the World Bank, the World

89National Center for Education Statistics, http://
www.nces.ed.gov//pubs2002/digest2001/tables/
PDF/table005.pdf
In FY2000, 167 U.S. universities, hospitals andresearch institutes responded to the AUTM Licensing
Survey.
www.autm.net
Louis G. Tornatzky, “Building State Economies by
Promoting University — Industry Technology
Transfer,” National Governors Association, 2000.
http://www.nga.org/center/divisions/1,1188,C_ISSUE_BRIEF^D_653,00.html
See http://www.oecd.org/dataoecd/17/56/16212536.
pdf, pages 63–67.
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
IPR evaluation and IPR valuation are quite different
and distinct processes. Evaluation seeks to assess theopportunities for identifying a corporate partner forcommercialization of an invention. Valuation seeks toassign a monetary value to the innovation. In the
United States, TLOs spend much time on evaluation,and very little time on valuation. Evaluation is criticalfor making patenting decisions and developing 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,” andnot by analytical economic studies.
A disclaimer must be made: there is a not a strict “oneto-one” 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 apatent application until 2004. Additionally, a single
Disclosure filed with the TLO may result in multiple
patent applications, including but not limited toContinuation-in-Part Applications and Divisional
Applications. These circumstances account for four
institutions among the Top 25 Research Universities
filing more patent applications than Disclosures ofInventions received in FY2000.
Jerry and Marie Thursby, “Industry Perspectives on

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T. A. Young

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Licensing University Technologies; Sources andProblems,” Jerry and Marie Thursby, AUTM Journal,
XII, 2000. (http://www.autm. net/index_ie.html)
The most predominant characteristic of university
technology is its “embryonic stage of development,”

requiring partners committed to a significant productdevelopment effort. Richard Jensen and Marie
Thursby, “Proofs and Prototypes for Sale: The Tale ofUniversity Licensing,” Working Paper 6698, National
Bureau of Economic Research, 1998.