Euros for Discoveries?

Many US academic researchers patent discoveries even before they publish them, contributing to $1.26 billion (US) in new product licenses in 2001. Now some European institutions want to catch up, but century-old traditions slow their pace. "A lot of the research at universities and institutions is focused on publication and the scientists are not focused on patents and commercializing their research results," says Mattheas Konrad, biotechnology manager of Bayern-Innovativ, a technology transfer company established by the Bavarian government and private industry to foster technology in that region. "This situation is changing, but it is a slow, slow process." Because Europe trails the United States by 10 to 15 years, universities and institutes forgo hundreds of millions of dollars in revenues from licensing and company startups that could pay for additional research and reward innovation. "In many places in Europe, technology transfer has been left to the individual scientist and academic with little participation by the university," says Martin Wood, director of licensing and agreements for Medical Research Council (MRC) Technology, the licensing arm of the MRC in London. But European scientists and institutions are changing to keep up with their US counterparts and encourage talented scientists to remain in their own countries, according to top technology transfer experts. Each European country has its own situation regarding ownership of intellectual property; they lack consensus, says Rudy Dekeyser, technology transfer manager and general director of the Flanders Interuniversity Institute for Biotechnology (VIB) in Belgium. VIB manages technology transfer for nine university departments and five associated laboratories. Dekeyser prefers the US model, with university ownership and an active team of professionals: "Not even the best tech-transfer manager can do it on his own. You need a team of experts." Leading in Commerce The United Kingdom, Germany, France, and some Scandinavian countries have organized technology-transfer offices more quickly than have other European states. But even among these leaders, revenues pale in comparison with those in the United States. Two academic powerhouses alone, the University of California system and Columbia University, accounted for $400 million of the $1.26 billion in US technology-transfer revenues, according to the Association of University Technology Managers Licensing survey: FY 2000. Other US universities each earned an average $4 million in licensing fees. "No European universities even reached half of that average," says Frank Zwetsloot, managing director of Science Alliance, a technology-transfer research consultancy in The Hague. Comparable European figures are not readily available. In a pilot survey of European universities conducted last year by the Association of European Science and Technology Transfer Professionals (ASTP) in The Hague, only 22% of respondents could quantify university license income and only 37% could gauge the number of patents issued. The larger European research institutes are advancing rapidly. The MRC last year generated £9.6 million from licensing a wide range of inventions, including vaccines, diagnostics, and other medical technologies. This year, the net should jump to £10 to 12 million. "There's been a big change in the UK, especially in the biomedical field," Wood says. The government encouraged that change by permitting institutions to keep revenues from commercialization. The MRC has spun off 16 companies, entered into more than 330 licensing deals, and helped establish a venture capital fund, MVM Limited, to invest in early-stage life science companies. A growing number of academics are interested in commercializing discoveries, he says, following their US rivals. At Germany's Max Planck Society (MPS), licensing revenues total around DM 32 million, says Bernhard Hertel, managing director of Garching Innovation, MPS's technology transfer division in Munich. "There is an increasing demand from young scientists who want to start their own companies, not only at MPS but elsewhere in Germany," Hertel says. The US technology-transfer empire began with the 1980 Bayh-Dole Act (PL 96-517, the Patent and Trademark Act Amendments), which allowed universities and institutes to retain ownership in discoveries made using federal research grants. Before Bayh-Dole became law, fewer than 250 patents had been issued to US universities each year. Today, that number has grown to nearly 3,300 per year. "I am convinced that Bayh-Dole represents one of the nation's great success stories," wrote Terry A. Young, past president of the Association of University Technology Managers (AUTM), in that organization's survey. The US system also works well because employers, including universities and research institutes, own the rights to any employee invention or discovery. In contrast, European scientists own their own discoveries. European universities had little incentive to spend the time and money to commercialize work from which they derived little benefit. And, because the scientists themselves showed little interest in profiting from their discoveries, many remained obscure. "A lot of great inventions could have emerged if only they had not been hidden in university closets," says Wolfgang Stoiber, a cofounder of JSB Partners, investment bankers with offices in the United States and Germany. Germany, Britain, and other European countries now see the benefits of changing patent and intellectual property (IP) policies. Just this past February, Germany amended the country's patent laws to give ownership to universities, allowing investors to work with technology transfer professionals rather than with researchers alone. Germany's move follows similar actions in Britain, Denmark, and other countries. Italy has taken the opposite direction, and in 2001 awarded IP ownership to researchers. Since 1949 Swedish law has granted researchers sole title to their inventions, but now that government is encouraging them to commercialize those discoveries. France and Switzerland recently enacted laws guaranteeing scientists their positions, resources, and tenure even if they take as much as six years on sabbatical to launch companies. Intellectual Property Priorities Despite the existence of the European Patent Office, which can streamline the application process, universities must still pay hefty translation fees to register their inventions in each country. Creation of a single European "community" patent, valid for every country, would obviate this problem, but this proposal has been mired in politics for decades. As a result, most European universities have failed to assemble the large patent portfolios common among their US counterparts. "Most European universities secure six or seven patents a year," Zwetsloot says. "This is too small to have a successful exploitation policy." American universities must share the income derived from discoveries with the inventors; most universities grant from one-third to one-half the net income to the scientist. In Europe, however, this practice differs widely. German universities typically award inventors the equivalent of just one month's salary, regardless of the licensing revenue. Many observers say this is insufficient to foster innovation. The European Molecular Biology Laboratory (EMBL), on the other hand, gives inventors 30% of net revenues. The University of Cambridge awards inventors 90% of their first £20,000 with a scale that slides to one-third of revenues greater than £100,000. At Cambridge, licensing revenues exceeded £1 million in 2001 for the first time, says David Secher, director of research services, the university's three-year-old technology-transfer office. Even scientists who receive plentiful revenue shares may worry their products won't make it in the marketplace. "Many prominent scientists have a fear, a phobia, of going into commercialization because they're afraid it's going to go wrong and that will end their scientific career," says Gabor Lamm, managing director of EMBL Enterprise Management Technology Transfer, the organization's commercialization office in Heidelberg. "This will change over time." Already, many European scientists accept the notion that invention can be married to commercial application. "We see an increasing number of startup companies," observes Hans Peter Hertig, Secretary-General of the Swiss National Science Foundation in Bern. "But how strong they will be, I can't really tell you." Younger scientists demonstrate a more adventurous spirit. Adds Cambridge University's Secher: "We are seeing the distance between Europe and the United States shrinking because of the realization that there is a global market in university technology transfer. It's a very exciting time in Europe." Ted Agres (tedagres@lycos.com) is a freelance writer in Washington, DC. Tech-Transfer Europe Working group of life scientists who want to help peers transfer knowledge www.euroscience.org/WGROUPS/TECH_TRSFERT European technology-transfer organization www.tii.org/tii.htm

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