Several weeks ago I had the opportunity to chat with Muir on the record. We talked about the role of university research and some of the criticisms swirling in the popular press, which seem to largely be based on unfamiliarity with the technology transfer process and the vital role that universities play.
Without further ado, here is part 1 of my interview with Jame Muir.
QUINN: Okay, we’re not live. Thanks, Jane, for taking the time to talk to me. I really appreciate it. I know this is probably a very busy time of the year for you. You just coming in recently as the new AUTM president. With all the changes to technology licensing and patent reform and the issues about patent trolls what do you see as the major pressing issue for universities moving forward over the next year?
MUIR: So, I think the major pressing issue for universities is to work hard, to help those within their university administrations, within their states, and at the federal level to better understand the reasons that technology transfer is done and which, if you go back to the Bayh-Dole Act, you know, the underlining principle of the creation of our profession was to improve the human condition. It was about figuring out how to use the discoveries that had been generated as a result of tax-payer dollars and actually get them into the marketplace so that they could improve people’s lives.
So I think getting people to understand that. To understand the fact that doing that takes a long time. Getting those discoveries through that valley of death further developed and then into the marketplace where they are actually making a difference in people’s lives can take a very long time especially in the biotech area. Anywhere from five to ten years.
And then the last piece of that is helping them understand that there really are a lot of nuances in the profession. And while things can oftentimes seem pretty straightforward, ? you’re taking the discovery out of the lab, patenting it, licensing it, and putting it into the marketplace ? every step of that process has its own unique challenges which again are complex and aren’t really apparent unless you’re living it on a day-to-day basis..
QUINN: Now you used the term there, “the valley of death.” And I know what you mean and I’m sure all the university folks and tech transfer people who may be reading will understand what you mean. But I used that term not that long ago talking to another person in the patent space and they were unfamiliar with what that meant. Could you give us a general thumbnail sketch of what it is that you mean by “the valley of death and why traversing the valley of death is so difficult and so critically important?
MUIR: Sure. So the majority of all the discoveries that come out of universities and research institutions are very early stage. They’re at the stage where they’re patentable. They are a new discovery, but they’re not yet a product. In order to get them from that patentable early discovery stage to a product that can actually be taken to the market requires an additional investment of time and money, whether it be to develop a prototype or proof of concept. It could be animal studies or all of those things that need to happen to actually create the product out of the new invention. That’s why the patent system that we have in the United States is so important because without proper patent protection, there’s no real incentive for companies and investors to invest in those very early stage technologies without the patent protection.
So going back to your original question, getting those early stage discoveries further developed to the point where they can actually bring products into the market.
QUINN: The way I try and explain it to people is that the university plays a certain role in this whole equation which I don’t think is all that well understood that maybe we can talk about a little bit. And then the private sector plays another role. And what the universities really are trying to do is get things far enough down the line towards development, towards commercialization that it is attractive for a corporation to come in, private sector company to come in and start investing and working alongside with the university to get it to something that ultimately winds up in the marketplace.
MUIR: Agree completely.
QUINN: Is that a fairly good way to talk about this whole traversing the valley, you think?
MUIR: I think that is very, very accurate and you know at what point is it interesting enough and enticing enough for that private sector to come in and actually further develop it, right? A lot of times universities will get pinged because they say “Why aren’t you steering your faculty towards more applied research?” At the end of the day it’s the faculty members who determine how their research is developed and that’s determined based on the federal grants that they receive to do their research. So unlike a corporation where a manager can dictate down what actually happens within the company, the university is a very different kind of setting.
QUINN: What do you say to people who will say that the public has already paid for this research. The federal government’s already paid for this research. And the university has done all this work and it’s just ready to hit the market when the university gets done, why should the private sector enjoy any kind of benefits here? And then the way I hear the subtext which they don’t really say although they kinda chuckle to themselves is is that this whole system is just structured to be a handout to private corporations.
QUINN: Yeah, you’re laughing. And I laugh, too. I mean it’s almost where do you begin with that kind of—but you hear that, too, right?
MUIR: Well, and that goes back to the original question you asked me. What’s the biggest challenge that we face? It’s a lack of understanding, right? Because clearly anybody who says something like that to you, again, doesn’t understand at all the process and all of the steps and challenges along the way.
QUINN: Right. Because when a university is getting a grant from the federal government they’re not getting this to do the final stage research on something. And universities really aren’t even very good at doing that kind of research and development. Universities are really good at, as far as I can tell, at being creative, outside the box in contributing to basic fundamental science. Would you agree?
MUIR: Right. They are, yes. They are essential in creating new knowledge, right? Oftentimes they’re creating new knowledge when they submit a grant that identifies a problem. And so they are trying to construct new approaches to solve that problem. Out of that solution oftentimes these new discoveries occur which are potentially patentable and can eventually, possibly be made into products. But you’re absolutely right. I mean much of what the federal funding is all about is creating that new knowledge.
QUINN: And by its very nature the federal government is not looking to start to fund university research into areas where they already believe the private sector is going to be researching. It’s always, as far as I can tell, in the highly speculative places where the private sector would not otherwise be involved because the private sector has to answer to shareholders, the universities have to answer to basic scientific knowledge.
MUIR: I’m not sure I agree 100% with you on that one.
QUINN: Okay. Well, let’s go down that path.
MUIR: Yes. So I think where the federal government is willing to fund research has more to do with what are critical problem areas that we as a nation are facing. So for example, the Department of Defense with all of our soldiers who are coming back missing limbs, paralyzed or needing some other assistance, clearly there is a problem there. Research plays a critical role in figuring out new treatments and new solutions to help those young men and women who are making such sacrifices in order to keep the United States a free country, right? So I think the government tries to identify those areas that are affecting a lot of people and our country in a major way. And that tends to be where they channel their research dollars.
QUINN: Once you start to hand this off to the private sector, or you license it out what is the role, how would you describe the role that the private sector plays? And what, if any, role do your universities continue to play?
MUIR: So of course that looks like different things in different places. But what I would say is first of all the universities don’t typically hand it off. That sounds very passive. We work with entities whether they be startup companies, entrepreneurs, or established corporations to try to identify the partner that has the right expertise and wherewithal to actually take that early stage discovery and get it into the marketplace. Universities and research institutions have the best expertise and qualifications for that. We try to ensure that most universities build in milestones into that license agreement. So what we do is we’ll say to the company that wants to license the technology, talk to us about your commercialization plan. What does that look like? What are the key milestones that have to happen? In what timeframes do those have to happen in order for you to execute on the plan that you’ve developed for this? Then with each of those milestones we build into the license agreement that if they don’t achieve those milestones we can revisit those and agree collectively that those weren’t realistic going into the agreement so let’s modify those. Or we can look at those and say you guys aren’t keeping your end of the deal, and we see no progress forward. We are going to terminate the license and take this technology back so that we can find a partner who is maybe more inclined and we have a greater likelihood of success.
QUINN: So your goal then, if I could summarize that, is to really find the right partner because you want to get these things out into the marketplace?
MUIR: That’s correct. Now that being said, a lot of people seem to think that, oh, well, there are people just lined up on the street after any technology. That there are ten people lined up who want to license it and you sell it to the highest bidder. And that just could not be any farther from the truth.
QUINN: I’m glad you brought that up because when I spoke at the AUTM conference this year Joe Allen was on the panel and he brought that up that the Washington Post who just wrote that article recently that criticized the whole tech transfer system as being just selling to the highest bidder. And the whole room started laughing because if you know anything about the tech transfer world, particularly universities, that’s just not true. I mean you license to any bidder, right? And you could spend a lot of time, money, and energy trying to find somebody who would be even interested in the first place, right?
MUIR: wouldn’t say we’ll license to any bidder. They have to show that they have the wherewithal otherwise it’s just a waste of everybody’s time and effort, right?
QUINN: Right, right.
MUIR: But yes, you’re absolutely right. We work very hard to find the right commercial partner. It is a major challenge that universities face in having the resources to actually be able to go out and find those partners. Going back to your original question I want to point out how much control the universities actually have in the success of that technology being commercialized. For the most part the control doesn’t go much beyond those milestones. As you can imagine there are many variables that come into play about whether or not a technology is successfully commercialized. And the majority of them are outside of the control of the university tech transfer office. So for example, if you’re licensing to a major corporation, how many times do you see a major corporation that goes through a new strategic planning initiative, or brings in a new CEO or a new division chief and all of a sudden the direction which was going completely east turns around and goes completely west and your technology is lost in the dust? Or for example with a startup, all of a sudden the IPO market dries up, or the venture capital money dries up for a while and go tight. Or the entrepreneur, his wife gets cancer and he loses all interest in starting the company. I mean there are just so many variables that come into play. And I often have people say to me, well, what are your next biggest hits? Where are the successes going to be? And I say, well, just a minute, let me get my crystal ball out and I will see if I can tell the future for you.
QUINN: I get that a lot as a patent attorney. A lot of times clients will ask me “what do you think about this?” And I tell them you probably don’t want to know what I think about this because patent attorneys are really good at getting patents, really good at telling you whether you can get a patent, but we are not very good at knowing what will be a winner in the marketplace. I always tell people I would have said that the Pet Rock was a dumb idea. So the moral of that story is that as you continue to tell the stories things take so many twists and turns and you don’t know what people are going to like, you don’t know what people are going to be interested in on the consumer level. And the people in the process are just so critically important because at any time you could decide just to give up.
QUINN: Inventing is not something that you can just set out to do and say, “I’m going be successful.” And it’s not fair to say that luck plays a role. Although I do think the old saying “luck favors the prepared” is quite accurate.
MUIR: Well, in a former life I used to teach the Dale Carnegie Sales Course and we used to talk about luck and actually every one of our startup entrepreneurs will tell you that luck is involved. But my definition of luck, L-U-C-K is Labor Under Correct Knowledge.
QUINN: That’s a good one. Could you elaborate on that? Because I think that’s brilliant.
MUIR: So for example, one of my hats that I wear is running an incubator where we’ve got at any point in time around 25 companies. Many of these companies license technologies out of the university. And they’re very passionate about what they do. They’re very bright people. But that doesn’t mean that they necessarily understand all of the nuances and all of what it takes to get a technology to the market. So a lot of what we do in this incubator is provide the resources, the educational and networking opportunities so that if they need help writing a business plan, if they need help really understanding what those financials look like, if they need help putting together their investor pitch, that we have the resources there to help fill the void where they don’t necessarily have the strength. So by taking the strengths and the passion and the energy that they do have and pairing it with some of the places that they don’t have the expertise which are critical to their success we can greatly enhance their likelihood of success.
QUINN: And that’s something I think, well, certainly the general public doesn’t understand. And maybe that’s some of the problems that we’re really having in the innovation communication at large with what really seems to be driving the media cycles is just misinformation.
CLICK HERE to CONTINUE READING — Part 2 of the interview discusses exactly why universities are NOT patent trolls.