Forum Ross Tech

[Carlito Roby]

Wherewill the next breakthrough commercial technologies come from, as the market slows the pace of new business start-ups? One main source is the university research community. Yet sometimes technology transfer from the university to the private sector can be difficult, time-consuming and unsuccessful. One successful model for technology transfers is the University of Pennsylvania, which aggressively supports startups around technologies spun off from Penn research. On Thursday, April 26, the Venable law firm is taking the lead in sponsoring a forum highlighting the lessons Penn's experience offers for other universities. The event is the brainchild of Penn Alumna and Venable attorney Christine A. Ross, who will discuss the event and share her insight on this issue.

Editor's Note: Washingtonpost.com moderators retain editorial controlover Live Online discussions and choose the most relevant questions forguests and hosts; guests and hosts can decline to answer questions.

Felicia Morton: Thank you for joining us today. To get us started, Christine, could you please tell me what the importance of technology transfer is to the high tech economy?Christine Ross: Technology transfer is incredibly important to the nation's economy. What sparked the increase in technology transfer to the private sector was the Bayh-Dole Act of 1980, which granted universities the right to own the results of research funded by the federal government in exchange for their commitment to protect and commercialize them for the public good. Since that time, the number of universities participating in tech transfer increased eightfold. It adds close to 25 billion to the US economy and supports numerous jobs per year. Prior to Bayh-Dole, universities could not own the rights to federally funded inventions unless they sucessfully petitioned the government. When you consider the fact that at a school like the University of Pennsylvania, 80% of research funding comes from the federal government, you can see what a huge impact this has.

Fairfax, VA: You work for Venable. What's your law firm's stake in arranging tech transfers? Christine Ross: It is rather difficult for me to assess what you mean by "stake". Interestingly enough, our technology practice, of which I am a part, is in discussions with several individuals who are forming funds to facilitate tech transfers to the private sector, and I myself am familiar with other incubators and accelerators in the area (I continue to use these terms in spite of the fact they are currently disfavored) who are in serious discussions with Virginia Tech and other local universities. I myself have a huge stake at this point because I arranged for the Center for Technology Transfer from the University of Pennyslvania to come down and present to the technology community, and am now in discussions with several other major research universities who are interested in the forum I developed. I see all of this as part and parcel of my role as a technology lawyer.

Washington, D.C.: What's the payoff for a university that engages in tech transfer?Christine Ross: The payoffs for universities can be huge. Licensing surveys show that from 1991-1999, MIT earned 98 million dollars from technology licenses; Stanford earned during that same period 356 million dollars. The monies earned in part spurns new research and also supports university endowments in some capacity or another, and a portion of this money in turn is invested in the venture community.

Silver Spring, MD: Other than UPENN, what other schools are leaders in the technology transfer area?Christine Ross: By far, the leader has to be Stanford and thereafter MIT.

NoVA: If I wanted to set up an official tech transfer program at a university, what are the first steps I should take?Christine Ross: First of all, do you work for a public or private university? This affects how things can be structured. The best place to start, in my mind, is by selecting universities whose research you admire and whom you think are successfully modeling technology transfer, and then to break this down critically and examine why you think it works. It is an organic process, involves cultivating close ties to industry and private equity, and whatever steps you take have to be crafted around this, not vice versa.

Washington, D.C.: Are their federal laws or regs affecting tech transfer agreements?Christine Ross: Yes. The best place to start would be with the Bayh-Dole Act of 1980, which granted the universities the right to own the results of research funded by the federal government.

Arlington, Va.: Don't "tech transfers" taint the independence of academic research? We hear over and over again about how the private sector is co-opting researchers' ability to publish their results etc. Why should schools get in bed EVEN MORE with the private sector?Christine Ross: I do not think that commercializing technologies developed at universities taints academic research. First, you have to understand how incredibly reticent numerous faculty members and even technology transfer offices are to engage the private sector in facilitating this process. Hence, the number of individuals, in my opinion, who are not only open to this process but also able to engage in it in an effective manner is limited. Moreover, many of these technologies have had dramatic impacts on our society -- for example, one of the companies which presented last evening, Plantgenix, involves using plant cells as manufacturing sites for various chemicals; the costs savings and the impact on the environment would be huge. The risk is that when research is funded by the private sector, there is a rush to publish instead of having adequate peer review; this occurs in a university setting. In short, there is a dialogue between universities and the private sector not only in terms of intellectual discourse but also promoting and facilitating technology developments.

Louisville, KY: University policies vary from those having a pollicy applied in all departments, to those that vary by department, or that vary even down to individual researchers and grant recipients. If a university wanted to have an overall policy for patenting and tech transfer, what should be the basis aspects of that program? Christine Ross: This is a very important point. I have had numerous discussions with individuals in the area who have attempted to faciliate tech transfer from area universities, and one of the complaints I have frequently heard is that they think there is a meeting of the minds on a particular issues, only in turn to find that this is not accepted by the department, for example, or the professors involved. There seems to be a definite shift on the part of universities to license technologies in consideration for equity; this would be the basis for any program that I establish.

Baltimore, MD: I had always been under the impression that research universities actively promoted research for the sake of research, not for economy. How does this seemingly opposing stance affect the research community at the school, if they're not only focused on their study but also on their business model?

Or, is that the idea, that Penn State and Venable would remove the need to worry about the latter?Christine Ross: The mindset within academe is most definitively research for the sake of research, and I expect it will remain that way. Universities not only have obligations to engage in such basic research, but to transmit knowledge to the society. There was a recent article in the New York Times, I think, on MIT making ALL of its course materials available on the internet to the public at large. Not just course syllabi, but substantive materials. Technology transfer is part and parcel of this larger dynamic. The technology transfer offices are interested in business models, not so much the researchers. The only exception to this at the University of Pennsylvania is the Wharton School, where someone made the apt remark last night that every professor has a side consulting business.

Washington, D.C.: I've heard that the technology transfer program at Johns Hopkins is not as productive as it could be given its high reputation. Can you comment on that?Christine Ross: Thank you for that question; this is a rather controversial issue. I assume the basis for your question was the recent article in Washington Techway magazine entitled "What is wrong with Baltimore". In part, this is a chicken and egg problem. Baltimore, in the opinion of Fred Siegel, who is quoted in that same article, noted that it is difficult for Johns Hopkins to be entrepreneurial in the context of Baltimore. I have heard numerous people in the D.C. area remark that they have had issues in trying to commercialize various technologies, but then I ran into someone at the tech transfer event last night who has had an incredibly positive experience with Johns Hopkins and tells me things are moving forward at a brisk pace. I hope this is indicative of a new attitude of "getting the deal done" within area research universities.

Alexandria, VA: What's a good example of a tech transfer deal that UPENN was involved in?Christine Ross: The UPenn spinoff with which I am most familiar is PlantGenix. They are a new agricultural biotechnolgy company that has exclusive rights to a technology which enhances a plant cell's ability to concentrate or produce various chemicals such that chemicals can be produced more efficiently, cheaply and cleanly. I met with the CEO when I first went up to meet with the Center for Technology Transfer in January of this year. The did a Series A round with PA Early Stage and are now looking to do a Series B. The Philadelphia area is very strong regarding biotech, and hence, the majority of Penn spinoffs seem to be in biotech. I am trying to facilitate tech transfers from their engineering school, for instance, which are not readily commercialized in the Philadelphia market. I am trying to trade off on the respective strengths of this community with the strenghts of a major research university like UPenn.

College Park, MD: What about the University of Maryland? Does it have a strong tech transfer program? What about other locals -- Catholic, American, GWU, Georgetown, GMU, UVa. etc?Christine Ross: A tech transfer program is only as good as the technologies which are coming out of that particular university. This in turn revolves around federal research dollars, a university's ability to attract top notch faculty and students, endowment etc... I am not sufficiently familiar with the University of Maryland or other local schools to comment upon their tech transfer programs or the technologies coming out of these schools. I think it is a fair comment, however, that none of the schools you mentioned are traditionally considered major national research insitutions like MIT, Standford, Johns Hopkins or UPenn.

Bethesda, MD: Can you comment on the impact this tech transfer movement could have on the DC area's high-tech economy? Do you see it as a boon to the local tech economy? Is it something that this area has not yet been able to develop yet with the existing institutions here?Christine Ross: Thank you for this question. I am trying to facilitate tech transfer in this area by major research universities outside of the area such that it can have more of an impact on the area economy. I think there is wide agreement that this area has not facilitated tech transfer as successfully as Silicon Valley or the Route 128 corridor. At the same time, for the longest time DC was a government town and was not home to major research institutions like Stanford. We are just coming into our own, and as the technology community is an essence an ecosystem such that all parts or elements are important, tech transfer is an integral part of this ecosystem. Stanford began its technology transfer program in 1970, so they have 30 years of experience in doing this.

Felicia Morton: Well, that wraps up our live online interview. Thank you so much for your time, Christine. And thanks to everyone from Louisville, Kentucky to Arlington, Virginia for submitting questions to Christine on the state of technology transfer. It seems that this topic has generated a lot of interest and we look forward to hearing more about it in the future. Until next time, this is Felicia Morton signing off.

Washington, D.C.: The current market is harsh for non-university startups -- is that the case for technologies emerging from universities as well? And are they protected in any way from economic downswings?Christine Ross: I think part of the reason people are so interested in university spinoffs is that they have defensible, proprietary technologies which are potentially quite disruptive. Regretfully, many of the companies funded during the bubble had none of the above. They are in no way protected during economic downswings. The major obstacle to university spinoffs is the disconnect between academe and private equity. It is readily apparent to anyone in the space.

Felicia Morton: That was our last question today. Thanks to everyone who joined thediscussion.

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