Facing up to commercial reality

The research community is becoming more sophisticated in the way they approach intellectual property and industry partnerships. Ruth Beran looks at how technology transfer has changed, where it is going and the challenges it faces.

It's a simple principle: in most cases, for scientific discovery to be useful, it needs to be commercialised. But between the theory and the reality, there are plenty of pitfalls and hurdles.

"The idea of technology transfer is to put research discoveries into some kind of beneficial use to or for the community," says Paul Sheever of Access Economics. "The reality is that for most research discoveries to get into use, you need to go through private investment."

Rowan Gilmore, the CEO of the Australian Institute for Commercialisation, defines technology transfer similarly. "We would define tech transfer, or research commercialisation, as the transfer of technology developed in a university, CRC, or medical research institute into an organisation that can take it to market," he says.

And the outcome that the AIC wants to see from technology transfer is "to grow Australian business and to create wealth for the country," says Gilmore.

Paul Field, the CEO of NSW entity BioLink -- established in 2005 to expedite the commercialisation of life science research in NSW -- is quick to point out that technology transfer need not come solely from universities. "In the Australian context it probably means a lot more than that. Often it means what is coming out of start-up companies," he says.

"We're trying to get the technology out of the university, out to where it can do the best good," says Andy Sierakowski, director of the University of Western Australia's Office of Industry and Innovation and chair of tech transfer peak body Knowledge Commercialisation Australasia (KCA).

Changed focus

According to lawyer Phillip Mendes, director of consultancy Opteon, the area of technology transfer has "changed dramatically" in the past 10 years.

"Ten years ago the success of the tech transfer offices in most places was measured by the extent to which they could get research dollars in," says Mendes. "That focus has changed tremendously. Getting research dollars in from industry remains an important function of the tech transfer office, but as importantly as that -- or some would say more importantly than that -- is to create pathways to get the outcomes of the research into industry and into the market place."

For example, Sierakowski says that, "People think of commercialisation and technology transfer as just licensing and forming spin out companies, whereas 60 per cent of the work we do is actually getting research contracts with industry."

Mendes also says that in the past few years universities and research organisations have displayed a greater awareness of the importance of intellectual property. "If you look at their IP policies seven or eight years ago, the policies today would be much more sophisticated," he says.

This in turn is "creating an environment where entrepreneurship and business innovation in science can flourish more easily than it used to," says Mendes.

Governments have also "enthused people to think about innovation and commercialisation" which has impacted on people's perceptions of these areas, he says. "Commercialisation and tech transfer are regarded as legitimate and an objective that should be striven to be achieved," says Mendes. "Eight or 10 years ago these things were thought about casually, or were just not in the forefront of people's minds."

Gilmore says that governments are now more consciously trying to get a return on their R&D investment. "The days of public good CRCs without any ultimate outcomes seem to be gone," he says. "There is an increasing sophistication in the CRC movement in focusing on outcomes, rather than on the process of discovery."

However, Gilmore notes that it is important not to forget the process of discovery. "Clearly there's a role for basic research, and no one is arguing that we should forget about doing pure research," he says. "But some portion of that research has commercial outcomes that we would argue should be exploited better."

A positive aspect of government policy encouraging commercialisation is an acknowledgement that "commercialisation and tech transfer requires more resourcing than is currently allocated to it," says Gilmore. He also says that in the three years that he has been with the AIC, there is "much more awareness of the need for commercialisation."

Challenges

Peter Devine, regional director for investment and commercialisation for pre-seed venture fund Uniseed, says that often one of the most difficult things for technology transfer is getting from the idea which may be patentable to a point where an investor will want to put money into it. "That's where Uniseed fits in," he says. "We provide help to fill that funding gap."

Devine also says that there is a shortage of skilled people in the technology transfer area. "[In Australia] we don't have a lot of people who have taken inventions and commercialised them," he says.

Devine is wary of saying that there's a shortage of venture capital to fund technology transfer. "Those that say there's a shortage of venture capital haven't taken their technologies to a point where venture capitalists would invest in them," he says. The venture capitalists, meanwhile, "probably see a lot of stuff that is just a bit early and needs just a little bit more work to be at a point where they're prepared to put money into it.

"They're ready enough to put a patent in, but they're not ready enough to get venture capital. There's a big difference," says Devine.

Cultural change

Sierakowski is a strong believer that for technology transfer to be successful there has to be cultural change in research organisations.

"Scientists and inventors -- academics in other words -- need to understand that commercialistion is not a dirty word. Commercialisation is a fact of life, just like research and teaching," he says. "If they've got commercially viable things then they should think strongly about getting them out into the marketplace."

Access Economics' Paul Sheever agrees. "Researchers rarely, even with the best of motivations, think about their commercial outcomes or the commercial necessities as they're conducting their programs," he says.

Researchers will, for example, compromise their intellectual property (by publishing without patenting first, for example) and "if you can't get some protection for your property you can't commercialise it," says Sheever.

Also, researchers will often end up in research programs that have no conclusion rather than submitting themselves to a commercial process. "That may mean you have to work on a single molecule rather than go on and try and invent the next molecule," he says.

Researchers may also not want to give a particular discovery priority. "They dedicate themselves to the next publication or getting the next grant and so it becomes more of a pastime. The reality is that the opportunities do perish," says Sheever.

Another problem with the technology transfer process is that researchers don't disclose what they're doing, says Sheever. And finally, researchers may not want to cooperate with the people commercialising their discovery, he says.

Call in the pros

One way to encourage more cooperation between researchers and the people who are trying to commercialise science is to choose experienced technology transfer professionals who are researcher empathetic.

"I have to understand the pressures on your life, that you're applying for grants all the time, you've got to do teaching, so I have to understand how you operate," explains Sierakowski. "I can't become dominant. There has to be an understanding of what research is about."

At the same time, people working in technology transfer need to be able "to interface well with industry, venture capital, business, biotech company and everyone to help get ideas commercialised," says Sierakowski.

"It's very important that the technology transfer people form a partnership with the researchers. So the researchers become the technical arm of the partnership, and the technology people become the business side of the transfer," he says.

To Sierakowski, the most important element of making a technology transfer office or company work is the people you put in it. Sheever, however, is concerned that "an awful lot of the research centres don't really have good tech transfer people."

While there are some very good teams out there, "in general the technology transfer staff are not as connected with the market place and are not well funded by their research centres," he says. "In terms of their resources they're operating with two arms and a leg tied behind their back. As they hop along their experience sometimes limits their knowledge of even where to hop."

One of the challenges that people involved in the technology transfer sector face is that they find themselves in a "sort of no man's land," says Mendes. "You're perceived by those that you interact with all the time as being neither part of the scientific community and also not part of the business community."

Another challenge is that Australian doesn't have a technology transfer profession as such, says Mendes, which makes it hard for people in the sector to improve their skills. "There isn't an acknowledged career pathway or an acknowledged education pathway that people follow," he says. "So there is a lot of people at different points on the learning curve."

It takes time

Building successful technology transfer offices takes time. In 2003, the OECD conducted a study which found that successful transfer offices had a median existence of just 12 years, says Sierakowski -- barely as long as the time needed to take a drug, say, to market.

"When you do a licensing deal you might collect the money as a license fee, but it takes between five and 10 years to get revenues from royalties from that license," he says. In the biotech area this time frame could be 10 to 15 years.

"It takes time to get the right people in the technology transfer offices," he says, as well as time to change the culture on campus so that researchers believe that the technology transfer people are "doing good things".

Mendes is of the same opinion. "Over time people in [technology transfer] become more experienced, more knowledgeable. There isn't a short cut to that."

However, Gilmore believes that improvements are more related to additional funding than the passage of time. "Inevitably as people get more experience they'll do better deals and understand things better," he says, "But it's probably more to do with resourcing."

Sheever thinks that the industry needs both more money and more people. "It really is on one hand as simple and on the other hand as complicated as that," he says. "You need people for sustainability, you need funding to give them the chance to learn and to apply their skills, expand and bring other people in."

BioLink's Paul Field says it is important to bring back people from overseas that have experience in technology transfer. "I think there are some really good people coming into this tech transfer space -- it's certainly a lot different to when I got into it many years ago," he says. "If you look at the people that we have here at BioLink, that's an interesting sign of some new blood coming in and how international experience is really important."

Gilmore says one way to improve research commercialistion is to "better win the hearts and minds of researchers" by holding classes on routes to market for their research.

This would firstly make graduates more aware of commercialisation and secondly improve the resourcing of commercialisation offices so that IP becomes more accessible, says Gilmore.

He also says that increasing funding for programs such as TechFast -- a program funded by the Department of Industry and several state governments which matches Australian based SMEs with a technological need to research organisations - would "really bring customers who want solutions to the universities, because the universities aren't particularly good at finding or working with SMEs themselves."

Responding to the market

Gilmore also says that an emerging trend in the technology transfer sector is a greater focus on 'market pull' rather than 'technology push'.

Technology push is where commercialisation offices "wait for interested parties to come to them to try and commercialise," says Gilmore. Market pull starts with a business and seeks technologies to solve a problem. "It's a little bit like trying to find a solution for a known problem rather than starting with a solution and looking for problem that it solves," he says.

Another trend that Gilmore is seeing is the rise of intermediaries involved to "help pull the technology out of researchers rather than push it onto business."

People often assume that technology transfer is between two parties, the university commercialisation office and a business. But Gilmore says, that the researcher adds a third party to the equation.

"Quite often there is disconnects between the researcher and the university commercialisation office," he says.

A third party intermediary can resolve problems between the researcher and the commercialisation office and "having an independent third party makes all parties to the deal behave," says Gilmore.

Measuring change

While there seems to be no doubt that technology transfer is on the increase, quantifiable measures of change in the area are not easy to find.

Field says that the second Commercialisation Expo which showcases technology transfer across all sectors to be held in Melbourne from June 18-20, 2006, following on from the inaugural event held in 2003, is "another sign that the tech transfer profession is getting better organised."

He also says that the expo highlights that "this is about business skills and professional development. It's not just filing patents and keeping your fingers crossed. It's actually about getting out there and knocking on doors."

Mendes says that if the number of people involved in tech transfer in the research community were counted, his "intuitive expectation" is that the number has increased three or four times compared with 10 years ago.

While Australia is sometimes said to be lagging behind places like the United States in terms of its technology transfer abilities, Mendes says "the rate of sophisticated in Australia is climbing at a faster rate because of the way the landscape and the climate in Australia has moved in the last 10 years."

However, Gilmore says that the "jury is still out" as to whether Australia is commercialising discoveries better or not.

"There have been significant improvements over the last three or four years," says Sierakowski.

A commercialisation survey being conducted by the Department of Education, Science and Training, to be completed some time in 2006 year, will provide information on things like the amount of money being made from licensing, spin-out companies and the number of patents being produced.

"I think we'll certainly see improvements there," says Sierakowski. "We've seen an improvement in activity and to get results we need to have an increased level of activity, so the outcomes will come. But all of this takes time. Research takes time, hence commercialisation of research takes time."