Consultants Recommend WSU Tech Transfer Office

PULLMAN, Wash. — Developing a first-rate office of technology transfer is now essential for Washington State University, according to a report from consultants released recently by George Hedge, WSU vice provost for research.
Hedge said he will soon name an internal faculty advisory group to discuss implementation of the report, noting that actions must be consistent with the university’s needs and budget. Copies of the document, “Report of WSU Intellectual Property Administration Review Committee,” are being distributed to many key offices across campus and are available through his office upon request.
The consultants note that it is an opportune time for the university to establish a comprehensive technology transfer program. Several approved positions are presently unfilled. “It now is important that the appointees have proper authority and compensation. This will assure taking advantage of the vacancies to create an ideal system,” the report states.
Need for effective intellectual property management by universities has its origins in the 1980 federal Bayh-Dole Act that created a uniform patent policy
among the many federal agencies that fund research. The act enables small businesses and nonprofit organizations, including universities, to retain title to materials and products they invent under federal funding.
A major impetus for the bill was the inability of the federal government to transfer technologies for which it had assumed ownership. Hundreds of valuable patents were sitting unused on the shelf because the government, which had sponsored the research producing the discovery, lacked the resources and links with industry needed for developing and marketing the inventions.
Before 1981, fewer than 250 patents were issued to universities each year. Slightly over a decade later, almost 1,600 were being issued annually. Nearly 80 percent of those stemmed from federally funded research. In addition, the number of universities participating in the patenting effort increased to the point where more than 200 universities have at least one patent issued each year.
The management of intellectual property in the modern research university addresses three primary activities, the consultants point out. They are deploying technology in the public interest, revenue generation and risk management.
The consultants’ primary recommendation is that an Office of Intellectual Property Administration be the sole university entity responsible for all technology transfer and intellectual property issues.
“Without a unified, centralized technology transfer organization, the university may jeopardize its ownership of intellectual property (present and future) and its financial return from commercialization,” the report states. The financial risks of improper intellectual property administration can often far outweigh the returns from commercialization. The only method of truly ameliorating such risks is to centrally administer all intellectual property matters, the consultants conclude.
Other issues dealt with in the report include the relationship between an office of intellectual property administration and a research foundation, necessary staffing levels, budget and the WSU Research Park.
The use of a research foundation as a vehicle for technology transfer and regional economic development has substantial benefits, the consultants write. Among these are the ability to create an aggressive for-profit subsidiary of the foundation to handle equity, venture capital and private development partners; and the ability to retain funds, raise funds and stimulate alumni.
Financing a technology transfer operation is a complicated process, and senior administrators must avoid the simplistic notion that the office should become self-sufficient through licensing fees and royalties. The consultants suggest that such an office could reach the break-even point in about seven years if it had allocated to it 20 percent of the indirect cost revenues from industry-sponsored research agreements, of the license fees and royalties from licenses, and of the realized cash value of equity in start-up companies.
Of the research park, the consultants wrote that the operation of the facility requires a skill set distinct from technology transfer. To function as an economic development magnet, it should be focused as an incubator and WSU user-friendly interactive site. “Thus it should be interactive with the foundation and work in concert with the foundation to achieve area economic development,” the report suggests.