Technology Transfer Research Universities as Engines for Economic Development
Topics & Speakers 1. Technology Transfer Fundamentals Chip Hood (MUSC-FRD) 2. Technology Transfer in S.C. Chad Hardaway (USC IPO) 3. Technology Transfer Office Needs Joe Kolis (CURF)
Technology Transfer Fundamentals Chip Hood MUSC-FRD
Technology Transfer Fundamentals Ground breaking science (intellectual property) is converted into tangible products and services Spurs the creation of knowledge based economies Companies Jobs Fosters the recruitment and retention of entrepreneurial faculty Mandated by Bayh-Dole Act (federal funding)
Mechanics CoEE Univ. Research Discovery Evaluation & Protection (Patents) Marketing New Products Startup Licensing Jobs Established Company Tech Transfer Office
Background - Patents Patent: Provides exclusive rights in an invention (idea) Lengthy and expensive process Average time to Issue 5 years Initial Filing (1 year) $8,000-$12,000 International Application (18 months) National Applications (in each country) $6,000 >$100,000 Total cost for a US patent $20,000-$40,000
Licensing New Products Startup Licensing Jobs Established Company
Licensing License: permission to use university created intellectual property (patent) Consideration given to the University: Royalties on sales (% of net selling price) Up front payments, milestones, equity Payment of patent expenses Research Support (sometimes)
Does it work? For every $1 invested in technology transfer, the university receives >$6 of licensing income in return 1 Research Activity has a high rate of return A 10 point research score increase yields an additional $1.7M in license income. 1 1. Mind to Market, September 2006, Milken Institute
Technology Transfer in S.C. Chad Hardaway USC IPO
University Statistics for FY06 U.S. Universities expended +$45 billion on R&D in FY06 Managed 18,874 new invention disclosures Filed 15,908 total U.S. patent applications Saw 3,255 U.S. patents issued
University Statistics for FY06 Had 697 new products introduced to the market; Introduced more than 4,350 new products into the market in the nine years from 1998-2006 Launched 553 new startup companies 5,724 new spinouts since 1980 Significant job creation
Impact of Bayh- Dole Act U.S. Patents issued from University discoveries: 1980: 500 2006: 3,255
AUTM Survey Licenses Executed (FY06) Total Startups Small Companies Large Companies 4,963 764 2,416 1,648 100% 15.4% 48.7% 33.2%
Academic Technology Transfer License Income in FY05: $1.9 Billion Added >$40B USD to the U.S. economy and supported 270,000 jobs Per a 1999 study
S.C. Research Universities FY 2006 Combined AUTM Data for South Carolina s Three Research Universities Research Expenditures Patent Apps Patents Issued License & Option License Income Startups $439,669,659 92 27 40 $3,459,360 13 FY08: ~$600M of research awards
S.C. Research Universities 2002-2008 Combined COEE Data for South Carolina s Three Research Universities Invention Disclosures Provisional U.S. Apps U.S. Patent Apps U.S. Patents Issued Int'l. Patent Apps Active Licenses Licenses & Options Executed License Income Received Spin-Off Comp. 126 67 66 18 30 9 14 $ 298 K 8 2007-2008 CURF MUSC USC Patent Expenditures $475 K $488 K $425 K
Benchmarking 2007 Fiscal Year Avg of Schools with Med CURF MUSC USC Research Expenditures ($10M) $31 $14 $16 $14 IP Disclosures 3.83 4.14 3.18 6.02 New US Patent Apps 2.20 2.5 1.34 3.01 US Patents Issued 0.61 0.93 0.13 0.86 License & Options 1.08 1.5 0.32 1.50 License Income $ 510,974.00 $ 198,000 $ 43,886.00 $ 21,525.0 Startups formed 0.10 0.22 0.13 0.36 Patent Legal Expenses $ 48,407.00 $ 33,714.00 $ 25,251.00 $ 30,014.00
Nanoparticles Clemson University Selah Technologies Startup in Pendleton, S.C. 10 employees Closed on a $1.5M investment round
Implantable Vascular Coils Medical University of South Carolina Micrus Endovascular Startup formed in 1996 IPO and now trading at $13/share 319 employees
Optical Sensing University of South Carolina Startup in Columbia, SC $9 million in seed/ venture capital Sequoia capital on the West Coast 20+ employees Corp HQ/ R&D in Columbia, S.C.
Technology Transfer Needs Joe Kolis CURF
S.C. Research Universities 2002-2008 Combined COEE Data for South Carolina s Three Research Universities Invention Disclosures Provisional U.S. Apps U.S. Patent Apps U.S. Patents Issued Int'l. Patent Apps Active Licenses Licenses & Options Executed License Income Received Spin-Off Comp. 126 67 66 18 30 9 14 $ 298 K 8 2007-2008 CURF MUSC USC Patent Expenditures $475 K $488 K $425 K
The Process Research Disclosure Patent protection Money out of TTO (about $450K/yr at present) Marketing Licensing Development Commercialization Royalties
Business Model Costs - Very cash intensive and front end loaded Legal Fees Marketing costs Rewards - All back end loaded and often not cash License income Royalties Equity Job creation Grant Support to Parent University Prestige
A Percentage Game Approximately 15-20% of all disclosures are licensed Many of those pay few if any royalties Not(!) Exclusive to Universities Proctor and Gamble commercializes 15% of its patents More chances mean more commercial activity
Shortcoming Each SC Research University - $150MM year in research expenditures Each spends about $450K/yr on IP protection National average of ALL Universities on IP protection is about $48K/$10MM in research expenditures Thus to be at the national average each SC Research University should already be spending about $720K on IP protection The CoEEs will create a dramatic increase in IP
The Concern Research Disclosure Patent protection Money out of TTO (More than now) Marketing Licensing -Some money back to TTO Development Commercialization Royalties - Money back to TTO
The Concern Research Disclosure Patent protection Money out of TTO (More than now) Marketing Licensing Development Commercialization Royalties
The Ask To maximize the possibility of commercialization of IP generated by the CoEEs, TTO s would like to patent and market as much IP as possible We request $250K/year for the next five years for each Research University Technology Transfer Office for protection and commercialization of Intellectual Property