The ABCs of IP
October 24, 2005

Published in partnership with Red Herring's Innovation Pipeline newsletter.

University research produces valuable new innovations every year. Many would say that this is the easy part. The hard part is turning those ideas into products and getting them on the market.

Where are the bottlenecks? Research conducted by the Ewing Marion Kauffman Foundation over the past two years indicates that university discoveries often get bogged down in the very tech transfer process that's intended to move them to market.

Among the findings of the Kauffman research:

*Most formal invention disclosures, patents and licenses are produced by a small number of research institutions. And some of the institutions that spend the most on research generate relatively few innovations.

*Innovation tends to follow the patent-license pathway, which means understaffed tech transfer offices must do the bulk of the work in getting inventions to market.

*Companies and venture investors looking to license university innovations say they're often frustrated by bureaucracy and the somewhat recalcitrant academic culture at many universities.

*The situation is not improving. In fact, university-industry relationships are getting worse. Some firms and investors now deal only with favored universities and researchers.

In the hope of loosening the innovation logjam, the Kauffman Foundation has launched a new program called iBridge, which is intended to aid universities in disseminating their ideas. The network is a clearinghouse for university innovation, a channel through which researchers can make their innovations known to a wide audience.

We caught up with Lesa Mitchell, vice president for advancing innovation at the Kauffman Foundation, to ask about the challenges and opportunities at university labs.

Innovation Pipeline: Your research suggests there's a real disconnect between university innovators and the market.
Lesa Mitchell: The industry is quite distraught with the state of their university relationships. One of the real problems is the pressure on public universities to be risk averse--they want to lock up IP around a sponsored agreement. Of course, on the industry side firms are trying to do the same thing. On both sides there are legal constructs impeding progress. We want to make sure IP is coming out of the university. We can learn from open-source and Linux collaboration and apply some of those lessons.

Are some U.S. companies so frustrated that they're looking to move outside the U.S. to strike relationships with foreign university research teams?
Some are moving outside the U.S. because it's difficult to deal with universities. Within the last year there has been a boiling over.

What's the impact of companies going overseas to cut deals with research labs?
It's counterproductive. We want our institutions to collaborate. The last thing we want is to have our industry look for its knowledge outside the U.S. We need to see it flourish, not die.

Do university tech transfer offices have the resources to effectively navigate the various investment issues with VCs?
For universities, managing those complex relationships is difficult. VCs are highly paid and every day they need to make decisions about whether to license a technology or not and they don't necessarily go through the tech transfer office when they decide. The real question for universities is how to become better decision makers at patenting and then how to move innovations to the marketplace.

How do most experienced VCs get access to university research?
VCs only go to certain universities where they know professors in engineering departments. Our interest is in figuring out how to address their narrow bandwidth and see that more ideas are made visible to VCs.

And what's the answer?
We believe universities need to step back and have a broader strategy and develop alternative pathways for innovation. That's where iBridge comes in.

Where do you see good collaboration between university tech transfer offices and industry?
The places where we see the majority of activity surrounding startups is in the UC system in California.

What about the Northeast?
Universities like Columbia and MIT are not spinning out innovation because of a prolific faculty but rather because they're surrounded by VCs and they learn from the social relationships.

Innovation Pipeline goes inside campuses and corporate labs to cover technologies on the move from lab to market. The monthly e-newsletter, published in cooperation with Red Herring magazine, features innovations in seven sectors: biomedicine, communications, defense and security, electronics, energy, nanotechnology and software. It profiles a promising startup in each sector and provides analysis of its market opportunity, financing and competitive edge.

For more coverage of technology transfer, read the latest issue of Innovation Pipeline.

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