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Technology Transfer in the LSU System:
History, Activity & Opportunities
Nicole Baute HonoréeLSU System Director of Research & Economic
Development Initiatives
Presented to:
LSU Transition Advisory Team – Commercialization &
Technology Transfer Task Force Meeting
May 8, 2013
OverviewOrganizational Structure and Responsibilities
Research & Tech Transfer Activity Metrics
Key Areas for Improvement in Campus TTOs
Enhancing Future Capacity and Opportunity
5/8/2013 2
Current Organizational StructureTech transfer offices established separately on various
campuses, beginning in 1985 at LSU A&M
Each Chancellor determines how to fund, staff, manage and evaluate tech transfer operation on that campus
No centralized management of tech transfer at the System level or the R&T Foundation
Campuses function separately except when shared invention disclosures are received
5/8/2013 3
How does an LSU Invention Get Licensed?
Campus TTO receives Invention
Disclosure from Faculty/Staff
Campus TTO reviews patentability & marketability of
invention, decides how to proceed
Campus TTO markets invention, files
patents, identifies partners, conducts
due diligence
Campus TTO negotiates license terms with
business partner, using template agreements
System staff reviews license materials for
compliance, prepares materials for Board
approval and Presidential signature
Campus TTO manages the
license and the relationship with
the company
5/8/2013 4
Roles & Responsibilities for Technology TransferCampus System
Chancellor defines the mission and objectives of the campus Tech Transfer Office (TTO) Develop template agreements for campus TTOs
Chancellor/designee hires TTO personnel, establishes budgets and sets performance expectations
Review proposed licenses for compliance with BoS regulations, policy and standard template language and prepares materials for BoS consideration
TTO evaluates invention disclosures to determine next steps in commercialization
Manage PM-67 Process on behalf of President, for all matters including licenses
TTO retains patent counsel and manages the patent prosecution process
Offer professional development & resources to campus TTOs and Research Offices
TTO markets the invention to identify potential commercial partners
Provide assistance to campus TTOs during staff vacancies or upon campus request
TTO conducts due diligence to assure that the partner is capable of bringing the invention to the market
Participate in national organizations, provide input on key issues and share policy information with campus TTOs
TTO negotiates all types of commercialization-related agreements
Collect, report and distribute annual activity metrics to AUTM and other interested entities
TTO should use standard template agreements to facilitate the negotiation process, assure consistency with laws & policies
TTO prepares proposed license materials for System review, Board approval and Presidential signature
TTO implements, monitors and maintains the license agreement terms and obligations
TTO conducts outreach to faculty for continued development of disclosures and awareness of IP issues
5/8/2013 5
LSU System Support of Technology Transfer Developed multiple template
agreements (10) for all types of licensing transactions
Licensed relational database for use by all campuses TTOs in 2006
Launched LSU Council of Tech Transfer Officers
Negotiated statewide license of key marketing research tool for use by every university in LA
Engage external consultants to provide professional development and assistance on key issues
Proposed revisions in 2010 to Bylaws and PMs relative to tech transfer
Manage consolidated annual AUTM metrics reporting
Streamlined and expedited Board of Supervisors license review process: Shifted proposed license
agreements from Academic Affairs Agenda to the Consent Agenda
Eliminated Board approval of non-exclusive license agreements
Eliminated Board approval of any proposed license which is substantially similar to one already approved (i.e. crop varietals)
Allowed campus submission to BoS of proposed agreements if negotiations are substantially complete but not finalized
5/8/2013 6
Significant Board Matters: Why Licenses?? In 2005, Board of Supervisors revised its Bylaws, defined licenses as
“Significant Board Matters”Concern over campus TTO failure to adhere to national best practices,
entering into agreements which created unreasonable university liability or which did not contain due diligence for development or payments
In 2007, Board again revised its Bylaws, requested development of a standard uniform process for licensing with template agreements and anticipating less Board review
In 2010, proposed draft policy revisions, developed in conjunction with System staff, campus tech transfer directors and the General Counsel, were rejected by three campuses and not submitted to the Board
Proposed revisions update Chapter VII of Bylaws, incorporate /eliminate PM-64, revise PM-16 as a vehicle for delegating signature authority (handout)
5/8/2013 7
Research and Technology Transfer Activity Metrics
5/8/2013 8
Inputs Outputs
National University Research Landscape
ALL U.S. Universities 63% federally funded Total R&D $$ change
One year (FY10-11): 6%Five year (FY06-11): 31%
Federal R&D $$ changeOne year (FY10-11): 9%Five year (FY06-11): 32%
LSU System42% federally funded Total R&D $$ change
One year (FY10-11): -1%Five year (FY06-11): 14%
Federal R&D $$ changeOne year (FY10-11): 1%Five year (FY06-11): 21%
NSF HERD FY2011: $65 billion academic R&D expenditures $41 billion from federal sources
5/8/2013 9
National Commercialization Landscape
Benchmarks for Technology Transfer Activity1 invention disclosure per ~$2.5 million in R&D
Patent apps filed on ~60% of new disclosures
~25% of disclosures eventually get licensed
1 start-up company per ~$100 million in R&D
~47% of legal expenses reimbursed
~0.5% of licenses generate >$1 million
Average ROI for Universities ~ 3.3%
Source: Speaker Analysis of AUTM FY2011 Repot5/8/2013 10
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
LSU System Annual R&D Expenditures(without UNO, dollars in thousands)
Total
LSU Average Fed as % of Total : 38%
5/8/2013 11
LSU System Invention Disclosures
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
20
40
60
80
100
120
140
160
180
Actual vs. Expected Invention Disclosures(expect 1 per every $2.5 million in R&D expenditures)
Actual Dis-closures
Expected Disclosures
5/8/2013 12
??What’s going on here??
Evaluating the R&D Pipeline at LSU: Worrisome Trends
Federal Gov-ernment
State and local governments
Industry0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Major Sources of LSU System R&D Expend.
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0
20
40
60
80
100
120
140
160
LSU System Invention Disclosures
Professor Associate Professor
Assistant Professor
Research Associate
0
200
400
600
800
1,000
1,200
1,400
LSU System Faculty Employment
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
The desired university outputs cannot grow when the fundamental R&D inputs are declining . . . But, there are actions TTOs can take to help.
5/8/2013 13
LSU System Invention Disclosures, By Campus
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
10
20
30
40
50
60
70
80
LSU A&M
Ag Center
Pennington
HSC-NO
HSC-S
LSU-S
Faculty Outreach is
Essential!
5/8/2013 14
LSU System Licenses & Options Signed, by Campus
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
5
10
15
20
25
30
35
HSC-S
HSC-NO
Pennington
Ag Center
LSU A&M
5/8/2013 15
Deal Flow Volume is Key
Start-up Companies based upon LSU System Inventions
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
1
2
3
4
5
6
7
Actual Start-ups
Expected Start-ups
Expect 1 start-up company for each ~$100 Million R&D
5/8/2013 16
Better than Expected!
Express License for Faculty Start-ups (ELFS) template agreement launched 12/2012 to further increase start-ups
LSU System License Income & ROI(licensing income as % of R&D expenditures)
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
Lice
nsin
g In
com
e
ROI
Avg. University ROI: 3.3%
5/8/2013 17
LSU System License Income, By Campus
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
$11,000,000
$12,000,000
LSU A&M
Ag Center
Pennington
HSC-NO
HSC-S
Home Run: Ag Clearfield Rice
Home Run: Ag Cotton
5/8/2013 18
LSU System License Income, without “Homeruns”: Scale Changes Entirely
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
-$200,000
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
LSU A&M
Ag, w/o Homeruns
Pennington
HSC-NO
HSC-S
5/8/2013 19
LSU System Campuses: Tech Transfer Legal Fees
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Annual Legal Spent & Reimbursed
Expended Reimbursed
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
Annual Reimbursement Percentage
LSU A&M Ag Center Pennington
HSC-NO HSC-S National Average
5/8/2013 20
LSU System Campuses:Tech Transfer Office Staffing Levels (System total FTE in white box, year office launched in legend)
2008 2009 2010 2011 20120
1
2
3
4
5
LSU A&M (1985)
Ag Center (1986)
Pennington (2000)
HSC-NO (1999)
HSC-S (2001)
LSU-S (2006)12.1 13.25 11 10.5
9
5/8/2013 21
Looking to the Future
5/8/2013 22
Key Areas for Improvementin Campus TTOsImplement best practices in operations, agreements and
accounting (address common audit findings, next slide)Maintain coordinated and consistent data managementEnhance faculty outreach to increase activityConsistently use template agreementsRely on legal expertise for complex arrangementsHire trained staff with significant experienceEstablish better linkages with industry relations,
sponsored research and economic development offices
5/8/2013 23
Internal Audit Findings:Campus Tech Transfer Office Issues
Common, pervasive deficiencies found in all campus tech transfer offices include:Lack of proper due diligence regarding the suitability of potential
licensees and of proposed agreementsLack of adequate intellectual property valuation practicesLack of licensee performance monitoring to ensure adequate
progress in commercializationLack of invoicing and collection of amounts due to university in
accordance with the terms of executed contractsLack of proper management of conflicts of interest and conflicts of
commitmentLack of sufficient campus attention to key performance metrics
5/8/2013 24
Potential Organizational, Policy & Procedural Changes Implement key changes in Bylaws, as per 2010 proposal, including approval of
agreements at a level below the Board of Supervisors
More effectively use R&T Foundations, university research parks and incubators around the state
Inventory current campus TTO expertise and resources to determine potential for greater sharing and identify additional needs
Obtain access to expanded and specialized legal expertise
Require regular and consistent use of all aspects of KSS database- Data tracking - Financial Accounting - Marketing- IP bundling - Agreement monitoring - Faculty contacts
Provide enhanced educational opportunities and/or mentoring of new staff and greater involvement in AUTM
5/8/2013 25
LSU Must Expand Commercialization Ecosystem
Source: Malakoff, D. “The many ways of making academic research pay off”. Science, February 15, 2013.
We need MULTIPLE access points, in and out of
the research pipeline, for all types of
participants, to enhance both impact of LSU’s
entire research enterprise
5/8/2013 26
Discussion & Questions
5/8/2013 27