Technology Transfer in the LSU System:

History, Activity & Opportunities

Nicole Baute HonoréeLSU System Director of Research & Economic

Development Initiatives

Presented to:

LSU Transition Advisory Team – Commercialization &

Technology Transfer Task Force Meeting

May 8, 2013

OverviewOrganizational Structure and Responsibilities

Research & Tech Transfer Activity Metrics

Key Areas for Improvement in Campus TTOs

Enhancing Future Capacity and Opportunity

5/8/2013 2

Current Organizational StructureTech transfer offices established separately on various

campuses, beginning in 1985 at LSU A&M

Each Chancellor determines how to fund, staff, manage and evaluate tech transfer operation on that campus

No centralized management of tech transfer at the System level or the R&T Foundation

Campuses function separately except when shared invention disclosures are received

5/8/2013 3

How does an LSU Invention Get Licensed?

Campus TTO receives Invention

Disclosure from Faculty/Staff

Campus TTO reviews patentability & marketability of

invention, decides how to proceed

Campus TTO markets invention, files

patents, identifies partners, conducts

due diligence

Campus TTO negotiates license terms with

business partner, using template agreements

System staff reviews license materials for

compliance, prepares materials for Board

approval and Presidential signature

Campus TTO manages the

license and the relationship with

the company

5/8/2013 4

Roles & Responsibilities for Technology TransferCampus System

Chancellor defines the mission and objectives of the campus Tech Transfer Office (TTO) Develop template agreements for campus TTOs

Chancellor/designee hires TTO personnel, establishes budgets and sets performance expectations

Review proposed licenses for compliance with BoS regulations, policy and standard template language and prepares materials for BoS consideration

TTO evaluates invention disclosures to determine next steps in commercialization

Manage PM-67 Process on behalf of President, for all matters including licenses

TTO retains patent counsel and manages the patent prosecution process

Offer professional development & resources to campus TTOs and Research Offices

TTO markets the invention to identify potential commercial partners

Provide assistance to campus TTOs during staff vacancies or upon campus request

TTO conducts due diligence to assure that the partner is capable of bringing the invention to the market

Participate in national organizations, provide input on key issues and share policy information with campus TTOs

TTO negotiates all types of commercialization-related agreements

Collect, report and distribute annual activity metrics to AUTM and other interested entities

TTO should use standard template agreements to facilitate the negotiation process, assure consistency with laws & policies

TTO prepares proposed license materials for System review, Board approval and Presidential signature

TTO implements, monitors and maintains the license agreement terms and obligations

TTO conducts outreach to faculty for continued development of disclosures and awareness of IP issues

5/8/2013 5

LSU System Support of Technology Transfer Developed multiple template

agreements (10) for all types of licensing transactions

Licensed relational database for use by all campuses TTOs in 2006

Launched LSU Council of Tech Transfer Officers

Negotiated statewide license of key marketing research tool for use by every university in LA

Engage external consultants to provide professional development and assistance on key issues

Proposed revisions in 2010 to Bylaws and PMs relative to tech transfer

Manage consolidated annual AUTM metrics reporting

Streamlined and expedited Board of Supervisors license review process: Shifted proposed license

agreements from Academic Affairs Agenda to the Consent Agenda

Eliminated Board approval of non-exclusive license agreements

Eliminated Board approval of any proposed license which is substantially similar to one already approved (i.e. crop varietals)

Allowed campus submission to BoS of proposed agreements if negotiations are substantially complete but not finalized

5/8/2013 6

Significant Board Matters: Why Licenses?? In 2005, Board of Supervisors revised its Bylaws, defined licenses as

“Significant Board Matters”Concern over campus TTO failure to adhere to national best practices,

entering into agreements which created unreasonable university liability or which did not contain due diligence for development or payments

In 2007, Board again revised its Bylaws, requested development of a standard uniform process for licensing with template agreements and anticipating less Board review

In 2010, proposed draft policy revisions, developed in conjunction with System staff, campus tech transfer directors and the General Counsel, were rejected by three campuses and not submitted to the Board

Proposed revisions update Chapter VII of Bylaws, incorporate /eliminate PM-64, revise PM-16 as a vehicle for delegating signature authority (handout)

5/8/2013 7

Research and Technology Transfer Activity Metrics

5/8/2013 8

Inputs Outputs

National University Research Landscape

ALL U.S. Universities 63% federally funded Total R&D $$ change

One year (FY10-11): 6%Five year (FY06-11): 31%

Federal R&D $$ changeOne year (FY10-11): 9%Five year (FY06-11): 32%

LSU System42% federally funded Total R&D $$ change

One year (FY10-11): -1%Five year (FY06-11): 14%

Federal R&D $$ changeOne year (FY10-11): 1%Five year (FY06-11): 21%

NSF HERD FY2011: $65 billion academic R&D expenditures $41 billion from federal sources

5/8/2013 9

National Commercialization Landscape

Benchmarks for Technology Transfer Activity1 invention disclosure per ~$2.5 million in R&D

Patent apps filed on ~60% of new disclosures

~25% of disclosures eventually get licensed

1 start-up company per ~$100 million in R&D

~47% of legal expenses reimbursed

~0.5% of licenses generate >$1 million

Average ROI for Universities ~ 3.3%

Source: Speaker Analysis of AUTM FY2011 Repot5/8/2013 10

FY2004

FY2005

FY2006

FY2007

FY2008

FY2009

FY2010

FY2011

FY2012

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

LSU System Annual R&D Expenditures(without UNO, dollars in thousands)

Total

LSU Average Fed as % of Total : 38%

5/8/2013 11

LSU System Invention Disclosures

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

20

40

60

80

100

120

140

160

180

Actual vs. Expected Invention Disclosures(expect 1 per every $2.5 million in R&D expenditures)

Actual Dis-closures

Expected Disclosures

5/8/2013 12

??What’s going on here??

Evaluating the R&D Pipeline at LSU: Worrisome Trends

Federal Gov-ernment

State and local governments

Industry0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Major Sources of LSU System R&D Expend.

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

20

40

60

80

100

120

140

160

LSU System Invention Disclosures

Professor Associate Professor

Assistant Professor

Research Associate

0

200

400

600

800

1,000

1,200

1,400

LSU System Faculty Employment

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

The desired university outputs cannot grow when the fundamental R&D inputs are declining . . . But, there are actions TTOs can take to help.

5/8/2013 13

LSU System Invention Disclosures, By Campus

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

10

20

30

40

50

60

70

80

LSU A&M

Ag Center

Pennington

HSC-NO

HSC-S

LSU-S

Faculty Outreach is

Essential!

5/8/2013 14

LSU System Licenses & Options Signed, by Campus

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

5

10

15

20

25

30

35

HSC-S

HSC-NO

Pennington

Ag Center

LSU A&M

5/8/2013 15

Deal Flow Volume is Key

Start-up Companies based upon LSU System Inventions

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

1

2

3

4

5

6

7

Actual Start-ups

Expected Start-ups

Expect 1 start-up company for each ~$100 Million R&D

5/8/2013 16

Better than Expected!

Express License for Faculty Start-ups (ELFS) template agreement launched 12/2012 to further increase start-ups

LSU System License Income & ROI(licensing income as % of R&D expenditures)

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

Lice

nsin

g In

com

e

ROI

Avg. University ROI: 3.3%

5/8/2013 17

LSU System License Income, By Campus

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

$11,000,000

$12,000,000

LSU A&M

Ag Center

Pennington

HSC-NO

HSC-S

Home Run: Ag Clearfield Rice

Home Run: Ag Cotton

5/8/2013 18

LSU System License Income, without “Homeruns”: Scale Changes Entirely

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

-$200,000

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

LSU A&M

Ag, w/o Homeruns

Pennington

HSC-NO

HSC-S

5/8/2013 19

LSU System Campuses: Tech Transfer Legal Fees

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

Annual Legal Spent & Reimbursed

Expended Reimbursed

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Annual Reimbursement Percentage

LSU A&M Ag Center Pennington

HSC-NO HSC-S National Average

5/8/2013 20

LSU System Campuses:Tech Transfer Office Staffing Levels (System total FTE in white box, year office launched in legend)

2008 2009 2010 2011 20120

1

2

3

4

5

LSU A&M (1985)

Ag Center (1986)

Pennington (2000)

HSC-NO (1999)

HSC-S (2001)

LSU-S (2006)12.1 13.25 11 10.5

9

5/8/2013 21

Looking to the Future

5/8/2013 22

Key Areas for Improvementin Campus TTOsImplement best practices in operations, agreements and

accounting (address common audit findings, next slide)Maintain coordinated and consistent data managementEnhance faculty outreach to increase activityConsistently use template agreementsRely on legal expertise for complex arrangementsHire trained staff with significant experienceEstablish better linkages with industry relations,

sponsored research and economic development offices

5/8/2013 23

Internal Audit Findings:Campus Tech Transfer Office Issues

Common, pervasive deficiencies found in all campus tech transfer offices include:Lack of proper due diligence regarding the suitability of potential

licensees and of proposed agreementsLack of adequate intellectual property valuation practicesLack of licensee performance monitoring to ensure adequate

progress in commercializationLack of invoicing and collection of amounts due to university in

accordance with the terms of executed contractsLack of proper management of conflicts of interest and conflicts of

commitmentLack of sufficient campus attention to key performance metrics

5/8/2013 24

Potential Organizational, Policy & Procedural Changes Implement key changes in Bylaws, as per 2010 proposal, including approval of

agreements at a level below the Board of Supervisors

More effectively use R&T Foundations, university research parks and incubators around the state

Inventory current campus TTO expertise and resources to determine potential for greater sharing and identify additional needs

Obtain access to expanded and specialized legal expertise

Require regular and consistent use of all aspects of KSS database- Data tracking - Financial Accounting - Marketing- IP bundling - Agreement monitoring - Faculty contacts

Provide enhanced educational opportunities and/or mentoring of new staff and greater involvement in AUTM

5/8/2013 25

LSU Must Expand Commercialization Ecosystem

Source: Malakoff, D. “The many ways of making academic research pay off”. Science, February 15, 2013.

We need MULTIPLE access points, in and out of

the research pipeline, for all types of

participants, to enhance both impact of LSU’s

entire research enterprise

5/8/2013 26

Discussion & Questions

5/8/2013 27