Models of University-industry Cooperation
Starting with the passage of the Morrill Act in 1862, universities, private industry, and the U.S. government have worked collaboratively to move discoveries made in the research programs in universities into industry. The result of this long-term partnership has been an impressive list of innovative products and has lead to the belief that basic research at universities supports the development of innovative products that can help maintain competitiveness.
Cultural differences are an important consideration of the development of university-industry collaborations. Universities and companies differ in the way that research is funded, the expected outcomes of research programs, and the way that each manages the results of research. The mission of most universities can be summarized as teaching, research, and outreach. In support of these elements of their missions, universities foster a culture which supports the sharing of information with colleagues and the publication of the results of research in peer-reviewed journals. In contrast, companies use science to develop products that can be sold and generate a profit that provides a return to investors. In general, companies manage science for profit and often prefer to protect confidential information from early disclosure.
The transfer of knowledge and technology from universities to industry occurs through a number of pathways, but the best-known and most prominent pathways are the training of students and the publication of research results in the scientific literature.
Other methods that result in the transfer of knowledge are through consulting arrangements by faculty, research in the university laboratory that is sponsored by a company, consortia that bring together university scientists and industry scientists to conduct collaborative research, the licensing of inventions created at the university to companies for further development and commercialization, the creation of companies specifically for the development of a university created invention, and through the exchange of research materials between laboratories.
Universities engage in technology transfer for a variety of reasons.
One primary reason is that the U.S. federal government, the major sponsor of research at U.S. universities, makes technology transfer an obligation for the receipt of grant funds. Through the Bayh-Dole Act universities and other non-profit organizations that receive grants are required to facilitate the commercialization of research results for the public good.
Faculty at U.S. universities are becoming more entrepreneurial and wish to see the results of their research developed into products and services that benefit the public. Some also have aspirations to be involved in entrepreneurial ventures, and the patenting and licensing of technologies created in their laboratories is viewed as a way to meet these aspirations and to demonstrate that research has relevance to the public.
Technology transfer also can help create closer ties to industry that might provide employment opportunities for students, additional sponsored research, and may even result in donations to the university.
Research universities are viewed as an essential element of industry clusters and high growth regions. The presence of a university contributes to the economy at several levels, including the use of technology created at the research university to foster the development of companies locally or to support product development in existing companies.
Technology transfer can also generate income that can be used to support further research and education in the university. As an example, at the University of Washington, a portion of the revenue generated from our technology transfer program is used to fund graduate student fellowships and support a university-wide competitive grants program.
The development of technology transfer from universities in the U.S. was stimulated by the Bayh-Dole Act - Public Law 96-517, The Patent and Trademark Act of 1980. This law was enacted to enhance economic development by promoting investment by the private sector in the commercialization of federally funded research discoveries for the public good. It was reasoned that not enough technologies created at universities in research sponsored by the federal government were reaching the marketplace and that the public was not realizing the benefits of the government’s investment in research. Thus, non-profit recipients of federal research grants, which includes universities, were allowed to retain the title to inventions made with federal research grants and were charged with seeking commercial partners to develop these inventions. The remarkable increase in patenting and licensing of university inventions, and the wide array of innovative products that have resulted caused one observer to comment that the Bayh-Dole Act was “possibly the most inspired piece of legislation to be enacted in America over the last half century…” (The Economist, December 14, 2002).
However, the Bayh-Dole was only one of several changes that were occurring during this period that resulted in an increased interest in technologies created at U.S. universities. The rise in prominence of industries that rely on innovation changed the relationships between industry and universities. Specific examples are advances in computer software, advanced materials, and biotechnology. In addition, several events signaled stronger support for patent rights — the establishment of the Court of Appeals for the Federal Circuit created a specialized court to hear and resolve patent disputes, and the U.S. Supreme Court decision to enable the patenting of life forms — the Chakrabarty decision —opened new avenues for creativity in biotechnology.
Many states and regions have made university research and technology transfer key elements of economic development programs. Strong university research is considered important for the development of industry clusters and the development of a trained workforce. With the recognition of the role of university research in the development of strong regional economies, states and the federal government have created programs to enhance competitiveness through technology development. In many cases these programs encourage and support collaborative research between university and industry that emphasize later stage research and commercialization.
A variety of models have been employed to better transfer university research to industry. Each model varies based on the technology area of the companies, the way that the relationship is developed, and the outcome of the collaboration. The success of these models has been varied. An important consideration in the development of a collaboration is understanding the needs and expectations of both the university and the companies involved.
Technology licensing is perhaps one of the best documented ways that universities and industry have worked together. The AUTM Annual Survey of Licensing Activity has reported the remarkable increase over the last 12 years in the movement of technology created in university laboratories to existing companies for development and commercialization. In addition, the AUTM Survey has reported on the innovative new products that have been introduced as a result of the licensing of technologies developed at universities (www.autm.net).
Start-up companies represent the movement of technology created in a university laboratory into a newly created company for development and commercialization. These are high-risk ventures that require management talent and adequate financing, in addition to technology, for success. The AUTM Survey has also reported on the increase in this approach to the transfer of university technologies for development.
Sponsored research agreements enable a research project in a university laboratory using funds provided by the corporate sponsor. These are usually limited term agreements that typically have a specific work scope. In most cases these agreements are used to sponsor research to solve a specific problem in a research or development program at a company.
Research consortia are specialized centers within a university that bring together university researchers and industry researchers around a specific theme. Examples at the University of Washington are the University of Washington Engineered Biomaterials (UWEB) and the Center for Process Analytical Chemistry (CPAC). Often these centers are developed to allow scientists to solve common problems, and to conduct pre-competitive research. Companies become members of the center through the payment of annual membership fees and in return help direct funds to specific research products and receive access to technologies created in the research of the center. An prominent example of research consortia are NSF Engineering Research Centers that have been established at many U.S. universities.
High-level research alliances are longer term agreements that provide research support to universities. Typically, these alliances are governed by a board of representatives from both the university and the sponsoring company and research projects are selected jointly by university and company. In addition, commercialization rights to discoveries made in the research belong to the company. Examples of these relationships are the long-term joint research program between the Monsanto Company and Washington University in St. Louis, and research alliances between Amgen and MIT, Sandoz and the Scripps Institute, and Novartis and the University of California at Berkeley. Importantly, an external review of the relationship between Novartis and the University of California at Berkeley concluded that while this was an “intriguing experiment” it was recommend that similar broad research relationships should be avoided in the future. In addition, it appears that companies that have engaged in broad research relationships with a single university have not seen enriched benefits to their product development as a result of these relationships.
High-Level Technology Alliances are an emerging area of collaboration in which companies provide research institutions with access to specialized resources in exchange for technology rights. These alliances may or may not involve research support from the company to the university. These relationship may provide access to specialized equipment or detection technology, or access to tissue or genetic resources that are not easily accessible by the researchers in the university. These relationships provide faculty at the research institution with a competitive advantage in their research programs and are viewed as a tool to attract additional federal research support.
Universities and companies continue to experiment with models of cooperation and we can expect new models to appear from time to time.
While this discussion has focused on models of cooperation and economic development encouraged by the states and the federal government, there are other factors that influence research and technology transfer at U.S. universities. While the federal government clearly provides the largest amount of research support to universities, and expects the universities to exercise responsible management of these funds, there is also pressure on the funding agencies to demonstrate the practical impact of this huge expense. This is seen in the recent NIH Roadmap Initiative which supports drug screening and, in some cases, in order to encourage corporate cooperation, created exceptions to the Bayh-Dole rights.
Despite the continued efforts of the government, universities, and industry to demonstrate the impact of research on society, either in terms of improved healthcare or the introduction of innovative products, critics have expressed concern about the emphasis on commercialization of university-based research.
Some critics are concerned that the emphasis on commercialization has resulted in conflicts of interest that have compromised the objectivity of research at universities. They suggest that commercial relationships influence not only the kind of research that is conducted at universities but also the outcomes of the research. Thus, these critics contend that the core values of universities have been compromised by an emphasis on commercialization.
Other critics would like universities to emphasize improved social outcomes in their relationships. These critics advocate that universities negotiate licenses and funding relationships to retain rights for product development to benefit underdeveloped countries and for uses that effect humanitarian outcomes that may not have commercial importance. Examples of this are the efforts to retain rights in agricultural biotechnology for under developed countries, and to license technologies for diseases like malaria.
Universities and industry have engaged in a variety of productive relationships that have provided benefit to universities through expanded research programs, opportunities for students, and revenue that can support the academic mission. Industry also has benefited through access to specialized research programs, the ability to work with faculty with expertise in a specialized area of research, and access to ideas and discoveries that can enrich their product development. It is important that universities and industry continue to work together in relationships that assure the university mission and provide the outcomes desired by industry.