I’ for invention

Academic researchers and inventors are explorers – boldly going where no one has gone before. Most people agree on this. However, the relevance of their discoveries or breakthroughs is perceived very differently by different groups, at least when it comes down to technology transfer of that invention from universities to companies. Is the discovery the work of the singular individual, the spark of genius and deep matter expertise that shed light on what would have otherwise remained in darkness – the ‘Einstein’ type of explorer? Or is the discovery like making landfall on a distant shore, a shore that this just a small part of potentially an entire continent, the exploration of which will require effort and time by many – the ‘Columbus’ type?

The four I’s

In university technology transfer settings, the key interactions and patent licensing negotiations between the university and company usually evolve around the patented invention. The university researcher works from idea to invention and company R&D departments pick up the invention and turn it into innovation. This invention, often laid down in a patent application, is a central element of the transfer. Although the patent is arguably often the capstone for the know-how and commitment of the inventors, it plays a central role in university technology transfer. Granting a company access to such an invention, through a license or some other arrangement, is one of the defining transactions in technology transfer and often a bone of contention for many involved, researchers, technology transfer managers, entrepreneurs, and investors.

These people, usually overseen by the respective executive management layers, are the negotiation parties that have to strike the arrangements that result in the intended transfer. That is not always a smooth and straightforward process: their different backgrounds and goals lead to asymmetric information distribution, misunderstandings, and friction. Even the corporate R&D staff are prone to this, as the context in which they operate is very different from academic research environments. The difference is not the science underlying all their work but the processes, aims and structures of the organizations that drive and aim their work. The researcher’s place in their respective organizations, and their R&D objectives, sets them apart when it comes to role, goal and responsibility within the tech transfer negotiation processes.

Such fundamental differences in perspectives between universities and companies are not always fully recognized, which also play out at the negotiation table. Take for example terminology. Although the term ‘R&D’ is used by both sides to describe their work, the actual activities will differ markedly. Moreover, a lot of university researchers will claim they are ‘innovating’ but their use of this catch-all term refers to ‘newness’ in general, rather the more apt definition of an innovation in economic settings and the business sector: producing a ‘new or improved product or process for the marketplace’. In other words, innovations are produced by industry and it is the company that creates significant economic value – not the university.

Three more I’s

To better understand the complexity of university technology transfer it is important to understand the ‘human factor’ dimension, especially the role of the university researcher who has made the invention. Most researchers or professors at a university lack extensive direct experience with industry R&D or business practices. Similarly, the colleagues of the company researchers are usually not very familiar with the culture and processes at a university and struggle to understand the university and its peculiar ways.

This university researcher, the Einstein, not only came up with the idea but also contributes in-depth expertise on the topic and access to a network of other experts. Especially in the case of a first patent application, and the tentative nature of the new invention, the company wants her to be part of their corporate R&D process. Such inventors may not see themselves as subordinates to university management and transfers of researchers (and their grant funding) is common; their interests and perspective may not align with the university’s perspective. However, the university owns the right to the invention, making them an inseparable part of any tech transfer arrangement with the company.

Consequently, ‘I, the researcher’, ‘I, the university’ and ‘I, the company’, often have to enter into what amounts to a trilateral relationship within license negotiation positions.

It takes two to tango, but three can be a crowd

Research shows that these three groups tend to have strong opinions of each other, owing to their different perspectives, objectives and interests. Where the university and technology transfer managers see themselves as brokers, the researchers lament their lack of technical expertise, while the companies complain about the lack of market acumen. The researchers consider their invention the crucial link to new, innovative products, while the company sees one of multiple routes to a new product, and the university sees a publicly funded asset to be exploited. Managing the financially risky development process by the company is perceived by entrepreneurs and investors as a complex step towards innovation, while the researcher sees a straightforward path from ‘invention to innovation’, and the university may want to avoid a PR risk in being seen as perhaps too involved in commercial activities rather than its two core institutional missions (education and research). The organization’s structure and culture impact the perception of management and authority. Large organizations, be it corporates or universities, operate on different speeds compared to eager startup companies and enterprising individual professors.

All of this leads to different views between the three ‘I’s’ engaged in the negotiations on tech transfer rewards and risks. The difference between ‘Einstein’ and ‘Columbus’ is the negotiated compensation. The former is an individual of unique creativity, the latter is a team player who reached his goal because through perseverance that. The value of a unique idea versus the first step of a long and winding road is different. The role and importance of university technology transfer for all of the ‘I’s’, from the professor’s idea and the company’s innovation is an important value-creating trajectory; for the university it is perceived to be a tertiary function at best and one that comes with PR risks. Think of, for example, a professor suddenly the proud owner of an expensive car paid for by income generated from university technology transfer.

While one can lament the university‘s risk-averse culture and the friction it may create for university technology transfer, the challenge-driven academic research culture also fosters creativity, independent thought and critical thinking – traits that are highly valued in Western society and values that universities are expected to teach their students. Students who may also find employment in those same innovative companies. The duality of culture that makes it difficult to cross the ‘public/private’ divide and collaborate with companies in the private sector, but also worthwhile in terms of economic gains and societal benefits. Of course many sensible people recognize that finding a middle ground is necessary and crucial. As Lita Nelsen, the former Director of the MIT Technology Licensing Office, noted on the nature of tech transfer: “It’s not a business, but run it like a business”.

The I in information gap

But what does that mean; to run it like a business? To make university technology transfer processes more efficient and effective, it is important to move beyond generalized opinions and misperceptions. Practice does not make perfect, but accumulating experience in tech transfer offers guidelines and creates valuable expertise for practitioners. But to really improve university technology transfer, some issues need to be made more explicit and information gaps need to be filled in order to have the I’s come together.

Crucially, it is important to move beyond the general understandings of technology transfer negotiation processes into the nitty-gritty specifics of those interactions. Detailed analyses may generate new insights that can not only benefit new entrants in tech transfer, but also inform experienced practitioners on both sides of the fence – both companies and universities. This is the topic of ongoing research which takes individual cases as a starting point. Looking into the perspective of all the ‘I’s’ of a patent licensing negotiation. It aims to identify the intentions, perceptions and the information gap between the various negotiating parties and their stakeholders. To test hypotheses based on those case studies a survey has been designed which will be distributed in October among interested parties through a variety of networks.

This blog post is part of my ongoing PhD study at CWTS, which is supervised by Prof. Robert Tijssen and Prof. Sarah de Rijcke.