Thursday, June 5, 2014

What are technology transfer departments for?

I just wrote a post about how Penn's tech transfer policy is worse than usual in terms of rewarding inventors, and Sri Kosuri (all around cool guy and now running his own show at UCLA) made the excellent point that most tech transfer offices don't actually make money, except for a few that struck gold with a blockbuster drug or something. Very true! Which got me thinking: what is the mission statement of the tech transfer office? And the answer I came to is that I have no idea.

Could it be making money for the university? It's true that overall, tech transfer is not a money making venture. So it would seem that the university is on its face not interested in making money on tech transfer, and that it's provided as a service for the faculty. Partly true. However, there are definitely rumors at places that they overhauled tech transfer after screwing up some big blockbusters. So the university is definitely interested in perhaps winning the lottery. In fact, this is not so very different from the overall business model of undergraduate education at many of these same places: they somehow lose money on each student (despite the astronomical tuition), making it up when the occasional graduate becomes super rich and donates a ton of money back to the university. So my feeling is that the university definitely believes that there is some potential financial gain from tech transfer, and would like to make sure their tech transfer office doesn't miss something big.

That said, it does not really make money, and I certainly don't think tech transfer is typically run with a profit motive in mind most of the time. The idea, in theory, is to get the ideas from our labs out into the public domain. Wait, don't papers already do that for free? Yes. But companies typically would actually prefer to license the technology, since it can give them a competitive advantage in the marketplace. So if you want to get your tech out there, you really need some IP, no matter how altruistic you are. In practice, though, I'm not sure what criteria they use for deciding what to patent, and its an important choice because if they choose to patent, then it's a serious cost borne by everyone, which is what I was complaining about before. I'm guessing that they pursue more stuff than a more profit-minded entity would, and that's fine–at least some faculty can get some line items for their CV.

I see some problems with this, though. I have only very limited experience with this stuff, but I just don't see much coming from filing patents and having them sit on some shelf in the tech transfer office waiting for a wandering Google search to bring it to life. To the contrary, from what I've seen, getting your technology out into the commercial world requires a lot of care and attention and fostering of ties to industry partners (to its credit, Penn is making a concerted effort in this regard by creating an "innovation center" for startups and the like). It's a serious amount of work to establish and maintain these ties, and it doesn't just happen on its own. Its something that you have to want to do, and not everyone does.

Which brings me to another point: is the point of tech transfer to enable us as faculty to profit from our inventions? Again, not sure. They sure do tax the hell out of it: as I mentioned earlier, you're only getting around 22% of the royalty income, at Penn at least. Now, I griped about how little we get earlier–what roils me most is Penn compared to other places–but there's really not much I can do about it, and its not going to prevent me from trying to commercialize our work. But there is a line somewhere, and we're not all that far away from it. For instance, if the percentage we got was 1%, I think it would be pretty hard for me to justify all the time I would spend on commercialization if there was so little to show for it at the end of the day. What about 5%? 10%? 22%? Dunno, all I know is that there's a line in there somewhere. Of course, if you don't do any work, then I suppose any payout is fine, but on the other hand, like I said, those patents are unlikely to go anywhere. (By the way, remember that this is a percentage of the royalty income, which is already a very small percentage of sales, and then that gets split with various inventors, etc.)

All this to say that I'm still not sure exactly what the university hopes to get out of tech transfer, either for itself or the faculty involved. Solvency may be a goal, or may not be; empowering faculty may be a goal or may not be. In the end, though, I have to say that as I'm writing this, I'm more and more excited about the idea Penn has of creating tech incubators with resources to help take technology to the marketplace. Perhaps that's a far better model for empowering faculty to commercialize their work than people like me quibbling about a few pennies here or there.

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