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Technology Transfer from University Research to the Commercial World
Tim Cook
BA (Physics) 1969, D Phil (Cryogenics), 1972
HNC Mechanical Engineering, Diploma in Accounting & Finance
Managing Director Technology-based companies (1983 – 90) 7 years
Oxford Analytical Instruments
Microsystem Design Limited
Micrelec plc
Private Investor (1990 – 97) 7 years
Founding Managing Director Oxford Semiconductor
Founding Managing Director Oxford Asymmetry
University Technology Transfer (1997 – 2007) 10 years Managing Director Isis Innovation, Oxford University (1997-07)
Visiting Professor in Science Entrepreneurship, Oxford University (2006-09)
Advisor Cambridge Enterprise Board (2006 – date)
Commercialisation Panel - Oxford Brookes (2011 - date)
Non Executive Director 2007 – date 7 years Isis Innovation (1997 – 2014)
Lombard Medical Technology (2007 – 2011)
Oxford Gene Technology (2007 - )
Tim Cook
Industry
Investment
Academia
Programme
Introduction & Message 5
The Oxford University Model 9
Technology Transfer Tactics 6
Spinout Companies 5
Culture Change 6
What is a University?
A great University is defined by great academics • Great researchers
• Great thinkers
• Great teachers
Not • Great administrators
• Great technology transferors
• Or even great leaders
Although list two helps recruit and retain list one
What is a University for?
Principle products - teaching and research • There are few alternative sources of either of these
Valuable by-product - commercial opportunities • There are many sources of inventions to commercialise
It is an error to design a production plant to maximise the output of the by-product • If this is detrimental to the quality of the principle products
Tech transfer comes at the end of the research • Of course the value then extracted must be maximised but not
at the expense of the prime mission
Ignoring this will turn some great universities into “not-great” contract research companies
Speaker’s message
Technology transfer is stimulating communication between two very different cultures (Academia & Business)
The two cultures will not in general spontaneously understand each other • But there has always been the occasional multi linguist!
Therefore intermediaries are required • at least to start with
It only works if the intermediaries have a real understanding of both cultures
There is not a single recipe that always works • But there are some underlying principles
The Challenge – Different Cultures
Researcher Self directed
Next step defined by yesterday’s results
Free exchange of ideas
Commerce Driven by external needs
Clear goals with shareholder commitments
Commercial confidentiality
So we can expect it will be challenging to build a mutually trusting relationship
“Academics never deliver” “Industry is out to cheat us”
Orthogonal Value Sets
Academic axis
€ ->Research
2 Dimensional Intermediary
Research -> Products
Commercial axis
Licence
THE OXFORD MODEL AN EXAMPLE FROM AN OLD UNIVERSITY
Oxford University
Teaching and Research • Oxford University has spent centuries optimising methodologies
• for Teaching (since 1188)
• & Scientific Research (since 1700s)
Commercialisation of results • Direct spending on commercialisation is relatively recent
• Isis Innovation (Oxford University’s Technology Transfer Co) established in 1988
So this is a relatively new activity in a well-established University
Oxford Model - Key Ingredients
Rich portfolio of wholly-owned Intellectual Property Rights • Strong, world-class research base
• Diverse research sponsorship (700 different funders)
Clear intellectual property (IP) policy • Led from the top and widely supported
Investment in research support & tech transfer • 150 staff in Research Services and Isis Innovation
Clear internal demarcation of responsibility
Effective internal & external communications
Intellectual Property Policy - October 2000
University claims ownership of all employees’ and students’ IP rights resulting from University research activities
The university assists those researchers who wish to commercialise their research • by patenting, licences, spinout companies & consultancy
Researchers personally share the benefits • Royalty shares from licences
• Equity in spinout companies
• Income from personal consultancy
Isis Innovation
A company (established 1988) owned by the University
To help researchers commercialise their research results
Current Activities
Year to March 2014
Patenting 92
Licensing of intellectual property 105
Consulting and service contracts 398
Formation of new companies 8
Royalty Sharing on Licence Deals
>Isis Innovation pays all patent costs
>£3.1 (€3.8) million in the year to March 2014
>Isis recovers patent costs from royalties
>Isis retains 30% of royalties
>The net revenue is transferred to the University & distributed:
17.5% 21% 31.5% to £720k (€880k) 30%
0 10% 60% to £72k (€88k)
Department Funds
University General Fund
Researchers Personally
Total net revenue
Isis Innovation
30%
26.25% 28% 15.75% over £720k (€880k) 30%
Equity Sharing in Spinout Companies
Equity shared between:
• Academic(s) - Not only names on the patent
• University
• Investors
• Managers
Academic and University generally get similar amounts
Investors get what they negotiate for
Manager(s) share 5-15% depending
Note: Everyone on the list has an effective veto
So Tech Transferor’s task is to help them all agree
Academic Consultancy
Academics can consult for up to 30 days per year
The University must approve the contract
Isis Innovation provides an optional service to • Find opportunities
• Negotiate consultancy rates
• Manage the administration
If researchers choose to use it Isis charges 7½%
Results Year to March 2014
Isis Innovation has 90 staff
Received £3.1m (€3.8m) from University to spend on patents
Returned £6.8m (€8.3m) to the University
Created 8 spinout companies
Invested in 92 patent applications
Helped researchers win £19m (€23m) of translational funding
Growth for years ending March 2000 to 2014
Source: Isis Innovation Annual Report
TECH TRANSFER TACTICS
Isis Philosophy
Isis supports researchers who wish to transfer technology • It is vital that Isis helps researchers see that commercial engagement
can enhance their academic work
• by providing additional resources (both physical and intellectual)
The researcher’s interest is key to successful Tech Transfer
Tech transferor’s most critical asset is researcher confidence
Isis generates researcher enthusiasm by • Internal marketing
• University IP policy & rewards to researchers
• Recognition – Senior University staff are commercially active
And commercially active staff achieve senior positions!
• Employing high quality staff in TTO experienced in research and industry
Internal University Marketing
Set up a lighthouse to attract researchers
Tech transfer office spends a lot of time and effort on promotion directed inside the university • Mailshots, newsletters, magazine articles, www, lectures, handouts,
IP training, local radio, local TV, local newspapers, national media etc.
Tech transfer staff attend department seminars, college lunches, etc. • In other words they live in the same world as researchers
I believe the sociology of this is the most critical factor
Managing in a Company, “Managing” in a University
In a company the workers are employed by the manager • The worker’s role is to perform their part of the plan
• This is essential if the business plan is to be delivered
In a pop group the manager is employed by the performers • The manager’s function is to take care of everything so the performers
can perform
I believe the “management” of academic superstars will be much more effective if the second model is adopted • This message is particularly important to technology transferors!
• Be the “Researchers’ Friend” not the “IP Police”
Oxford Innovation Society – Attracting Business
Established in 1990 to foster University/business links
Since 1990 over 90 companies have joined
Companies pay an annual fee of £6,800 for membership
Membership Benefits
Ready access to the academics and University
Advance notification of all marketed patent applications
Invitations to thrice-yearly meetings and dinners
Customised research presentations and seminars
Regular newsletters and portfolios
Innovation Society - highly structured networking
Tea & coffee reception
Academic presentation
Sponsor presentation
Champagne reception
Dinner in College
After dinner drinks
Begbroke Science & Business Park
Spinout
Companies
Innovation Centres
Dept. of Materials
SPINOUT COMPANIES
An additional challenge
If we are talking about spinouts rather than consultancy or licensing there is a third axis
In addition to academia and industry there are investors
Investors are not the same as industrialists
The disparate parties involved in a spin-out
If it’s not working
get out
If it’s not working
fix it
If it’s not working find a workaround
Evaluate
Invest
Monitor
Coordinated plan
Coherent activity
Route is undefined at the start
Lots of concurrent activities
One company One major interest
Outsider Insider Insider
Investor Industrial Manager Academic
The third axis
Academic axis
€ ->Research
€ -> €€€
Investor axis
2 Dimensional Intermediary
3 Dimensional Intermediary
Spin-out
Research -> Products
Commercial axis
Licence
Different activities need different skills
Skills required Research Relationship
building Driving
management
Main reward Research results Technology
transfer Wealth
Main motivation Research activity Technology
transfer Carried interest
Protagonists Researchers Technology
transferors
Active
shareholders
Clean IPR Spinout
Company Growing
Company
Conclusions
Spinouts involve more than one value system
This is a challenge for managers and advisors
Significant benefits can be won by understanding this
Failing to understand it may prove fatal
Culture Change
All three must proceed together but the University must lead the change because….
1. The ideas are in the University • If University provides TT resource, change will happen faster
Oxford University pre-Isis 1 spin-out every 4 years, post-Isis 4 per year
2. If the University doesn’t lead, the University may not receive its share of the benefits
Entrepreneurial culture of
researchers
University technology transfer
resource
Local professional environment
Executive (policies)
Other academics
Gene pool Commercially
active scientists
The University
Tech transfer
office
Students Brokers
Itinerant Managers Consultants
University is a “sub-culture” in a “barter economy”
Investors Lawyers
Head hunters
PR agent
Real estate
Leasing Banks
Accountants
Specialist suppliers
Other start-ups
Management of a University – or your relationship with one
1. Walk along with the elephant • In whichever direction it chooses to go • Until it gets used to you
2. Start to pull gently on your rubber band 3. If you pull too hard or too suddenly
• You will break your rubber band and • Have no further influence over the elephant
University
You
Like leading an elephant with a thin rubber band
But
The caption says “OK I’ve got him, now hit him with the rock”
Don’t think you will ever have complete control over academics!
Cartoon by Stoney, Ravette Publishing +44 1403 711443 Tony Lopez (Copyright)
Conclusions
Opportunities exist in Universities for: • Economic development
• Personal wealth creation
To realise these benefits needs competent intermediaries
We have begun to understand the process
Thank you
www.isis-innovation.com
www.brookes.ac.uk/research
Painting by Jeremy Sutton, San Francisco Airport, 2004