by Dr. Sylvia Hsu-Chen Yip
At a Glance
In 1945, Vannevar Bush, the then United States (U.S.) Director of Office of Scientific Research and Development, submitted a report to the U.S. President Franklin Roosevelt on a programme for post-war scientific research. The commissioned report, entitled Science – The Endless Frontier, was a landmark and pioneer for modern science policy, where the visionary Bush helped the U.S. government recognise science, in particular basic research conducted in the academic or university setting, as a pivotal engine to galvanise the country’s economic growth, public welfare and national interest. The report was especially influential considering that it was published at the end of World War II, in which science-based technology with the likes of the atomic bomb, radar and penicillin, had been crucial. Bush’s call for the expansion of federal government support for scientific research resulted in the establishment of the National Science Foundation (NSF), National Institutes of Health (NIH) and Office of Naval Research (ONR), which remain until today the primary federal agencies in the U.S. offering research funding programmes.
Technology Transfer – Birth and Rebirth
It reached a point when government facilities could no longer accommodate the emerging needs for research and development (R&D) by the U.S. Therefore, the government began contracting with various qualified non-profit organisations, universities and private companies. This led to the birth of the concept technology transfer. Technology transfer is the process of transferring technology (e.g. technologies, skills, knowledge, methods of manufacturing, samples of manufacturing, facilities) developed or used from one organisation or unit to another, with the ultimate goal of converting the technology into a product for public benefit. Technology transfer is also sometimes called technology commercialisation because somewhere along the process the technology, which is often protected as an intellectual property, is sold. The party transferring the technology receives money in exchange for some or all of his/her rights to the technology (licensing).
The enactment of the Bayh-Dole Act in 1980 has since catapulted technology transfer to its renaissance. Prior to this legislation, the U.S. government was the sole proprietor of all intellectual property arising from federal government-funded research, as the inventors were obligated to assign their inventions to the government. It was cumbersome for a company to obtain a license from the government. The key change introduced by the Bayh-Dole Act was in the ownership of inventions made with federal funding: it allows universities, small businesses, or non-profit organisations to pursue ownership of their inventions. Therefore, private (non-governmental) ownership is now motivated by the prospect of financial profit to out-license and commercialise government-funded inventions.
We defined technology transfer earlier and know now that it involves technology, intellectual property, and sales. Quite simply, technology transfer lies in the interface of science, law and business (Figure 1).
The circle of technology transfer is illustrated in Figure 2. It all begins with the creation of an invention or technology in a research environment, for example a laboratory at a university. The invention is disclosed to the university technology transfer office. If the university does not have this facility, the inventor(s) can hire a technology management company. The technology, at this point, needs to at least have a proof-of-concept prototype or at least specification in a patent application that enables a person skilled in the art to make and use the invention as defined by the claim(s) of the patent application, rather than being merely an intellectual concept or idea. The invention/technology will be assessed and analysed by a technology manager in terms of the market for the technology and also the IP (intellectual property) landscape. If the technology is deemed to be mature and possess commercial value, IP protection in the form of a patent, copyright or trademark that gives the inventor exclusive rights, is usually sought. However, if the technology has great potential but is under-developed, the technology manager may devise a strategy to help the inventor develop the technology further.
With IP protection in place and the IP assigned to the university, potential in-licensees are scouted and the technology is marketed to them. If a negotiation is successful, the exclusive rights to practise, sell, and manufacture the technology are licensed to the interested party. This usually leads to the foundation of a start-up company that is supported by venture capitalists and angel investors (entrepreneurship, business development). Start-up companies are typically viewed as high-risk businesses as the technologies that they have in-licensed still require extensive research and development that may or may not lead to consumer products or services. After the technology has been sufficiently tested and the business risks have been reduced, it is not uncommon for the start-up to be acquired by a large, established company (corporate or industrial partnerships).
Any royalties that the university earns through the sale of their intellectual property are usually converted into research funding.
Drug Development as a Model of Technology Transfer
By virtue of my background in life sciences, I thought of using the development of a novel pharmaceutical drug as a tangible example of technology transfer. As depicted in Figure 3, the initial phase of drug development is called drug discovery. During this phase, the understanding of the biochemistry of a disease is understood and the drug targets are identified and validated. Drug targets are biological macromolecules (e.g., enzyme, receptor, viral surface protein, ion channel, transporter, DNA, RNA) that are critical for the disease. Then, an assay is developed and 10,000 organic compounds are tested in vitro with cell lines for desired properties or activities in a process called high throughput screening (HTS). The hit compounds are further screened to identify the lead compound (Hit to Lead, H2L). Organic chemists then synthesise different analogs of the lead compound to improve upon its pharmacokinetic profile in a step called lead optimisation. After this, the drug development process enters into a new phase that is comprised of pre-clinical studies. Here, animals are used for in vivo testing of about 250 compounds to determine the ultimate safety profile of the new drugs.
The entire drug discovery and pre-clinical phases typically take about 6.5 years . If the drug is developed in an academic research setting, by now the technology will have been licensed to a pharmaceutical company.
With a Food and Drug Administration (FDA)-approved Investigational New Drug (IND) application, usually about 5 compounds now enter into the clinical trial phase, where human volunteers are used for testing to generate safety and efficacy data. The clinical trials can be further divided into Phases I, II and III, where the sample sizes systematically increase, and take about 7 years to complete. At the end of successful clinical trials, an NDA (New Drug Application) or ANDA (Abbreviated New Drug Application) is filed to FDA Office of Regulatory Affairs for one final approved drug for the market.
Technology Transfer for Scientists and Engineers
The situation in the US depicted in the four graphs of Figure 4 (data obtained from National Science Foundation, US) looks somewhat desolate for scientists and engineers. While we are training and churning out more scientists and engineers than ever, the percentage of PhD recipients landing jobs after programme completion is at a record low. For both life sciences and engineering, the percentage of unemployed PhD recipients (not holding a job or postdoctoral training) is at a record high in 2011. As Paula Stephan points out in her book, How Economics Shapes Science, career prospects in science are increasingly dismal for the young because of ever-lengthening apprenticeships, scarcity of permanent academic positions, and the difficulty of getting funded.
The most recent global financial crisis in 2008 did not seem to adversely affect the patent statistics (Figure 5). From 2009 onward, both the overall number of patent applications filed and number of patents issued in five countries (U.S., Japan, China, South Korea and Germany) exhibit a steady and robust growth, which posits the number of jobs in the patent business should also increase.
The good news is that the role of scientists and engineers in the advancement of science and technology is not limited to performing the technical research to bring in new knowledge into the world and to find solutions to improve lives. Scientists and engineers can leverage their knowledge and training to push forward a technology along the pipeline to fruition as a product or service in the public market. As a matter of fact, technology transfer has created new career opportunities for scientists and engineers. For example, the last 15 years have seen a sharp increase in the use of non-attorney staff in law firms and corporations in patent procurement. These staff bear the titles of patent agents/patent engineers/patent scientists/technical advisors/technical specialists/scientific advisors. Essentially, these people have advanced technical background and keep the cost of patent prosecution process low as they have a lower billing rate than a patent lawyer/attorney. At Morrison & Foerster LLP, an international law firm whose impressive clientele includes Fujitsu Ltd., Beijing Organising Committee of the 2008 Olympic Games, Medtronic, Inc., and GE Consumer Finance, the firm’s patent agents are all doctorate holders who have graduated from Harvard University, University of Oxford, Massachusetts Institute of Technology and other prestigious institutions. Similarly, professionals at technology transfer offices (TTOs) in universities, non-profit research institutes and federal government agencies like National Institutes of Health and National Cancer Institute are individuals with advanced degrees in science or engineering. There are internships and fellowships offered by these TTOs as well as university or professional certificate programmes that help scientists and engineers make the career transition. Scientists and engineers certainly should not limit themselves but be open to acquiring more skills outside their technical training in order to remain competitive in the job market.
 Science – The Endless Frontier, A Report to the President by Vannevar Bush, Director of the Office of Scientific Research and Development, July 1945. https://www.nsf.gov/od/lpa/nsf50/vbush1945.htm
 Science Business by Gary P. Pisano, Harvard Business School Press.
 The Art and Science of Technology Transfer by Phyllis L. Speser, John Wiley & Sons, Inc.
 How Economics Shapes Science by Paula Stephan, Harvard University Press.
 Website of United States Patent and Trademark Office (USPTO), www.uspto.gov
 Website of World Intellectual Property Organisation (WIPO), www.wipo.int
 Website of Association of University Technology Managers (AUTM), www.autm.net
 Website of Licensing Executive Society (LES), www.lesi.org
 Website of National Science Foundation (NSF), www.nsf.gov
About the Author
Dr. Sylvia Hsu-Chen Yip was born in Ipoh, Malaysia. She holds a BSc (Biochemistry) from Universiti Kebangsaan Malaysia and a PhD (Chemistry) from Australian National University. At Emory University, Atlanta, she continued her postdoctoral research while simultaneously pursuing an internship at the university’s technology transfer office. Sylvia now resides in Washington DC where she works as a patent agent in a boutique intellectual property law firm, representing clients to obtain patents in biotech/pharma/chemical technological arenas. Outside her profession, Sylvia serves in the national committee of Women in Bio (WIB), a non-profit organisation for women in life sciences. Sylvia can be reached at email@example.com. Find out more about Sylvia by visiting her Scientific Malaysian profile at http://www.scientificmalaysian.com/members/chopin1810sy/.