Technology transfer

There are reasons for this:

• If the discoverer is a private entity, it may lack the resources to bring the technology to the market, such as building a network of distributors, sales and simply money and production capacity. And even when a company has the resources, it may not consider the technology as a strategic product.

• In the USA, if an invention is made in a government laboratory, then the laboratory is prohibited from competing with private companies by selling the final product or processes. Thus, the technology can only be put on the market by a private company.

•  If the technology was invented at the university, then most often it does not have sufficient resources and expertise for the production and promotion of products on the market. And besides, if the technology was invented with grant money from the US government, then it strongly recommends transferring the technology to a private company for commercialization.

The technology transfer process consists of several stages:

Stage 1 —  evaluation of intellectual property;

Stage 2 —  intellectual property protection;

Stage 3 —  licensing and/or commercialization of intellectual property.

At the stage of intellectual property evaluation, the university or other scientific institution where the inventor works carries out work on commercial and technical estimates of the invention. The decision on patenting is based most often on two factors: the possibility of patent protection and the commercial potential of the invention.

Once the intellectual property has been evaluated, the second step is the protection of the intellectual property. The owner, most often a university or academic organization rather than a specific inventor, makes an agreement with the law firm that will accompany the patent application process. At this stage, the inventor works closely with lawyers to ensure that the technology is properly understood and protected.

Finally, in the third stage of licensing and/or commercialization, a path is chosen to obtain profit from the invention. The choice depends on many factors: market situation, state of technology development, expertise of potential entrepreneurs and availability of finance. Licensing conditions and costs may vary, and most often include an advance payment by a scientific organization, royalties and/or a schedule of payments over several years, as well as funding for further research with the option of licensing the obtained technology.

Technology transfer is most common in the private sector, where licensing mechanisms or the creation of a joint venture, research consortium or partnership are used. At the same time, licensing is a huge business in itself. At the beginning of the 21st century, American companies received more than $66 billion in technology payments from other organizations. At the same time, the annual increase compared to the 90s of the last century was 18%.

A joint venture is the most advanced technology transfer option, because, firstly, it allows you to share risks and costs at an early stage of technology development between several companies, reducing the burden on one organization; secondly, the resources and expertise required for technology commercialization can be distributed among several companies, and a joint venture is almost the only way to combine; and third, for those areas where technologies are developing fast enough, joint venture — possibility to keep “on the crest” of new developments.Finally, in such an area as telecommunications, joint ventures make it feasible to develop and set basic technological standards. All this suggests that the trend for the creation of joint ventures will only grow.

In fact, licensing government technology has little potential, except for the National Institute of Health (NIH). It was the source of several breakthrough therapeutic and medical technologies, and thanks to its links with the pharmacy sector, it makes a huge profit from their licensing.Other government organizations prefer to sign CRADA (Cooperative Research and Development Agreements) — agreements on joint research and development. Under the agreements, government laboratories provide personnel and equipment, and the partner provides financial resources for research. At the same time, the number of CRADA signed by government agencies is growing every year.

Finally, it is worth talking about technology transfer from universities to industries. In the United States, this process is regulated by the Bayh-Dole Act, which recommends that universities and research organizations license technologies created with government financing.Since the 1980s, this activity has begun to bring a small but stable amount of income to universities. Statistics show that more than 150 educational institutions annually receive about $1 billion in revenue from licenses.

As in the case of government laboratories, universities can and do enter into agreements on joint research activities with commercial organizations. At the same time, universities take on about 7% of the total research budget. Another form is the creation of spin-off companies that are created with the participation of universities. The total number of such companies, which have issued about 3,450 patents in the United States and brought about two thousand new products to the market, is about 350 organizations.

While the leaders of the startup industry have been using the resources offered by the technology transfer process for a long time, in the post-Soviet space, research institutes and universities are only beginning to commercialize their developments and joint activities to bring technologies to market. At the same time, the potential for growth is huge, which will probably be the subject of one of our next materials.