As president of BirchBob International SA, I have the great pleasure to present to you this new bulletin which is designed for those who seek new technologies as well as for those who have the expertise to meet these needs.

With BIRCHBOB INNOVATIONS, technology commercialization gains an area where news, analysis and forums are at your disposal.

We will present to you, on a monthly basis, a press revue, an analytical article, a portrait of a success story in the area of technology commercialization, and documents prepared by regular or occasional outside contributors. If you are interested in sharing your expertise with the readers of BIRCHBOB INNOVATIONS you are welcomed to contact us at bulletin@birchbob.com.

In addition, a blog moderated by the people described in our articles, will enable you to further discuss issues raised in the bulletin. We are confident that these exchanges will be beneficial to all participants as they will reflect opinions coming from people of many different horizons.

We will further rely on you for giving us suggestion of subjects and for bringing us real-life experiences to be shared with everyone. In this first hour, some 6000 people will receive our bulletin.

This new bulletin also gives us the chance to present to you new sponsoring and advertising opportunities for promoting your contribution to our public, or to only a part of our public thanks to local distribution possibilities in languages other than English.

In the name of our team, I invite you now to discover BIRCHBOB INNOVATIONS, and to let us have your feedback.

Thank you for your participation, and enjoy our bulletin.

Back to the headlines

While many, in the border town of Juarez, Mexico, were welcoming the news, elsewhere, the mood wasn’t for a fiesta. It broke with a gloomy resonance far away up North, in the small industrial town of Valcourt, Canada, as it did across the Atlantic, in Gunskirchen, Austria: Bombardier Recreational Products Inc. (BRP) had announced the transfer of the vehicle assembly and engine manufacturing operations of its all-terrain vehicles (ATV) to Mexico, respectively from Canada and Austria. “The external pressures brought on by a strong Canadian dollar and Asian competition compelled the Company to turn to a low-cost country to increase profitability”, the company wrote in a press release. “We looked at various scenarios and transferring our operations to Mexico just made more sense.”

The situation makes sense to many other companies as well. And it isn’t any much different in Valcourt and in Gunskirchen than it is in thousands of other cities in the “industrialized” world. Manufacturers are fleeing to “low cost countries” at an accelerating pace.

In this world-wide redistribution of jobs, on the loosing end, many communities see one formula for their future: a blend of technology and entrepreneurship. Many, thankfully, are opulent in technological knowledge, rooted in universities and research centers.

But, how can the Valcourt’s and the Gunskirchen’s of this world tap into this technological gold mine?

Four elements of a favorable ecosystem

Andrew Duff, from Perth, Australia, might have an answer. Mr. Duff teaches Entrepreneurship and Venture Capital in the MBA program at the Graduate School of Management, of the University of Western Australia. With six years of highly successful operation, the program leads cross-disciplinary teams of MBA students through the process of defining an “investable” market strategy, creating a business plan and marketing the venture opportunity to a panel of regionally-based venture capitalists. The program has an extraordinary record of creating value for the ventures selected by the student teams and is supported strongly by the business community.

In substance, Mr. Duff says that basically, the cross linking of four elements is necessary to create an “ecosystem” in which technological entrepreneurial initiative can flourish.

“In order to build this ecocystem, you need people trained in management, intellectual property, capital and facilities.”

Facilities are not just physical buildings, but “education and commercialization training programs that cause people with ideas to come together around the idea of entrepreneurship.”

Universities on the frontline

What glues the critical mass together is incentive: “somebody must be responsible to operate the equation. Universities across the world are the ideal base for this ecosystem to develop. More and more of them now see their role of teaching and researching expanded to achieving economic development.”

“Some locations are naturally gifted with a great deal of all these elements: Boston’s route 128, Silicon Valley and London, England. These areas just bubble along.”

But Mr. Duff has been mostly inspired by more modest initiatives: “What we are beginning to see is innovation by design, where people have studied what it takes to pull together an excellent university program, that encourages economic development.

Chalmer University of Technology, in Gothenburg, Sweden, is one of them. Following initiatives taken in the early 90’s, Chalmers now operates its very own venture capital fund, and has created its School of Entrepreneurship.

Chalmers aims to increase the number of high-tech enterprises through an action-based final-year program for M.Sc. students. By May 2000, 45 students had graduated from the school and a total of 12 new companies were created from this group. These companies together raised more than US$ 10 million in venture capital and created 136 new jobs.

Gothenburg isn’t a very large town. This is probably a reason for which Mr. Duff has taken inspiration here. Western Australia isn’t densely populated either and is far away from major markets. This is why the ventures Mr. Duff is willing to encourage, at the University of Western Australia, must aim at a global market at the onset.

No textbook approach

The program was initiated in the year 2000. “Rather than taking the normal small business textbook approach, we decided that this was going to be about technological entrepreneurship and developing real-life companies that would be suitable for venture capital.”

As the program matured, many joined: VC companies, mentors, role model entrepreneurs and other professionals got involved in the process of working up successful businesses.

It is said that globally, in general, only one in 100 startups succeed. The Venture Capital Program has been offered on seven occasions between 2000 and 2005. Amongst the 41 ventures that have participated in the program since its inception, nine have raised private equity and one has listed on the Australian Stock Exchange.

One of these successful startups, Dimerix Bioscience, is a venture project based on knowledge developed by the Molecular Endocrinology group at the Western Australian Institute for Medical Research. Dimerix filed for a provisional patent application, in 2003.

A voluntary advisory board was established the same year to steer the business development of the venture. Several internationally respected scientists were engaged, forming the basis of a future scientific advisory board.

At the end of 2004 Dimerix was incorporated as a commercial company and in March 2005 formally entered into a joint venture agreement with Melbourne-based Starpharma for the development of an innovative nano-drug. The company has closed a venture capital financing deal in September.

Apart from teaching, Andrew Duff designs and initiates innovation intensive ventures through Venture Positioning Services (VPS). VPS also assists alliance partners and clients to enhance their venture creation efforts by applying the world class toolsets and frameworks it has developed or accessed to support its own venture development activities.

Back to the headlines

Metamorphosis of public research in many countries (1, 2)

On December 2, 1980, P.L. 96-517 was enacted into law by the American Congress and is better known as the “Bayh-Dole Act” with reference to Senators (Birch Bayh and Bob Dole) who sponsored it. All specialists agree that the commercialization of innovations financed by public funds has greatly changed since the adoption of the law some 25 years ago.

Opinions, however, differ greatly about the impacts of this law:

• For many, it has energized the relations between universities and the American industry. For some, it is even directly responsible for the great biotechnologies boom in the United States. The Economist Magazine summarizes the “pro Bayh-Dole Act” opinions as: “Possibly the most inspired piece of legislation to be enacted in America over the past half-century”. It is thus not surprising that many countries have been greatly inspired by the Act to establish their own scientific policy.
  
• For others, the Bayh-Dole Act has distorted university research by distracting attention from its primary focus. Some even go as far as putting the blame on this Act for increased prices in new medication and for the slowing down of discoveries in this field.  According to Fortune Magazine: “Bayh-Dole’s impact wasn’t so much in the industry it helped create, but rather in its unintended consequence – a legal frenzy that’s diverting scientists from doing science”

The reach of Bayh-Dole Act (3, 4, 5, 6, 7, 8, 9)

The following pages will contribute modestly in reconciling these diametrically-opposed opinions in order to identify means to profit from the Act or its equivalents (notably in Canada, China, Denmark, Germany, Great Britain, Hungary, Japan and Sweden).

The Policy and Objective of the Bayh-Dole Act well defines its intentions:

It is the policy and objective of the Congress to use the patent system to promote the utilization of inventions arising from federally supported research or development; to encourage maximum participation of small business firms in federally supported research and development efforts; to promote collaboration between commercial concerns and nonprofit organizations, including universities; to insure that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery; to promote the commercialization and public availability of inventions made in the United States by United States industry and labor; to ensure that the Government obtains sufficient rights in federally supported inventions to meet the needs of the Government and protect the public against nonuse or unreasonable use of inventions; and to minimize the costs of administering policies in this area.

Many websites render good portrayals of the Bayh-Dole Act within a few pages. Worth mentioning are the following university sites: Cincinnati, Colorado and New Hamshire. For more information, one can refer to the Legal Information Institute (LII) of the Cornell University Law School.

In short, the Bayh-Dole Act allows any small and medium size business as well as any non-profit organization (including universities) to patent and commercialize inventions they develop within the scope of research projects funded by federal agencies.

The legislator presumes that universities will be interested in giving up their know-how in exchange for royalties the industry will pay them to get a usually-exclusive license. He also takes for granted that industrialists will accept to invest the efforts, sometimes huge, required to transform an invention into a profitable industrial product on the market.

The Bayh-Dole Act thus explicitly favors collaboration between government, researchers and industry in the hope to value the efforts of R&D through the commercialization, as much as possible, of new and innovative technologies developed with taxpayers’ monies. Beyond promoting the United States economic development, the American government reserves the right to use the inventions for its own needs without paying royalties and gives itself the authority to grant additional licenses if it is proven that the invention is little-or-not used or if national interest is at stake.

To know more about the “Bayh-Dole Act” consult references (7) and (8) or watch a “video” (80 minutes) including a recent speech of Birch Bayh.


The stakes (10, 11, 12)

In the late 70’s, the American government had granted licenses on 5% of its 28,000 patents, and universities were getting between 150 and 260 patents per year. More than $30 billion worth of research work seemed unused because industry would not take the risk to invest in technologies without the insurance of benefiting from a reasonable exclusive right to make profitable the efforts consented. It’s in this context that the Bayh-Dole Act was adopted in December 1980. Since then, the percentage of R&D accomplished by universities has remained around 14% of the national total but the results coming out of the R&D have led to spectacular changes:

• The number of patents granted to American universities has grown from around 200 in 1980 (estimates vary between ± 30%) to close to 1,600 in the early 90’s, to 3,079 in 1999 and to 3,450 in 2003.
• In 1980, 25 universities had their own Technology Transfer Office; in 2003 there were 215.
• The number of licenses given by universities climbed from 1,229 in 1991 to 4,516 in 2003.
• The royalties are six times higher than they were twelve years ago growing from 218 M$ in 1991 to $1.3 billion in 2003.
• The value of university research done for industry has literally exploded from $70 million in 1980 to $3 billion in 2003.
• In 1995, the economic activity related to university licenses was estimated at $21 billion with 180,000 jobs. These figures have almost doubled in four years reaching $40.9 billion and 271,000 jobs in 1999.
• Currently, close to 400 new companies are started up every year by universities. Since 1980, more than 4,000 new enterprises were created from a license by a teaching organization in the United States.

Universities that were considered as “ivory towers” have become, for many, real “geese that lay golden eggs”!

Close to 60% of American university research funding comes from the federal government. Products created from that work range from Gatorade to synthetic insulin, by going through Taxol. A significant fact is that 10% to 20% of patents related to biotechnologies are granted to American universities but 71.6% of American patents in biotechnologies cite work supported by the government, which well-illustrate their value.

For more details, see references (10),  (11) and (12).


Similar experiences in other countries (10, 12, 13, 14, 15, 16, 17)

Considering noteworthy results obtained in the United States, many countries have been inspired by the Bayh-Dole Act to conceive or set standards for their own legislation. Some documents evoke equivalents of the “Bayh-Dole Act” in the following countries: Canada, China, Denmark, Great Britain (10, 14, 17), Hungary, Japan (10, 14), Sweden, and Switzerland. (By clicking the country name, you can view these documents). However, since the BirchBob Innovations bulletin is distributed in numerous countries, the ideal would be to obtain YOUR opinion about the relationship between research and the industry in your country. You can share it with the community of people working in commercialization of innovation by writing in the bulletin’s blog.


The side effects of such laws (2, 7, 10, 18, 19)

Universities patent more and more of their inventions, and industrialists have demonstrated their interest in purchasing licenses. Until then, the Bayh-Dole Act is functioning as predicted.  However, according to many observers, there would be collateral damages.

• Wishing to protect anything that could be patented, the American universities have imposed an embargo on the publication of certain research works. But, according to many, it’s the free information flow that made giant steps in science progress.
• Many fear that collaboration between industry and universities will open the door to potential conflicts of interest and will unduly favor applied research as opposed to fundamental research.
• The outrageous cost of certain licenses has a direct impact on the actual cost of products originating from these technologies. After having supported university research with his income taxes, the consumer has to indirectly pay for the cost of licenses which is included in the prices of products that are available only through one supplier because of the exclusivity clause. In the healthcare sector, this would contribute to the dizzying increase in medication prices.
• Researchers not interested in profits generated by licenses can even be prevented from pursuing work on subjects that their university has extended to companies.
• Recent lawsuits have shown that researchers can no longer avoid patents and licenses by invoking that they only do research. They now have to pay royalties to use patented techniques, which greatly reduces the amount of research in certain domains.

It seems there has been serious deviation from the spirit of the Bayh-Dole Act, notably from the policy and objective section which evoked free competition:

To insure that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise without unduly encumbering future research and discovery (10).

According to Fortune Magazine: “Bayh-Dole has served mostly as a nervous mother for a science that never needed one. New biomedical discoveries are now coddled and kept out of the rain - and it's hurting progress”


Separate dream from reality (10, 19, 20, 21, 22, 23)

A study titled: “The Bayh-Dole Act of 1980 and University-Industry Technology Transfer: A Model for Other OECD Governments?” (34 pages, 120 references) concludes that the American model is not easily transferable to other countries because its success relies on prerequisites not necessarily found elsewhere. Further more, this study tends to demonstrate that the Bayh-Dole Act did not generate the momentum it was attributed; it only managed it. Indeed, researchers’ charts suggest the trend had started before the law was adopted. The Bayh-Dole Act has mainly had the merit of having been adopted at the “right time”.

According to some studies, American law has had a relatively moderate impact on the funding of universities. Despite undeniable and widely-publicized successes, there would be only one university out of ten that would balance the cost of its evaluation services. (Although less categorical, references 12, 19 and 23 also say that most universities make, at best, meager profits from the commercialization of their innovations.)

In fact, the Bayh-Dole Act is probably neither the source of all success nor the mother of all evil. The question is submitted to BirchBob Innovations’ readers: how can we establish mutually-profitable relations for industry as well as for universities or other research centers funded by governments?  Give us your ideas in the bulletin’s blog.


Bayh-Dole, BirchBob and you (24, 25)

If you are accustomed to searching for the available information before investing in R&D, you know one must be careful:

• On one hand, the information you get is not necessarily in the public domain, it might be protected by a patent.
• On the other hand, patents are not necessarily an obstacle. Do not prematurely abandon your project, many patents are offered as licences.

Those two phenomena are more and more frequent since the adoption of the Bayh-Dole Act.

It is worthwhile to recall that the first objective of the Bayh-Dole Act is not to fund universities but rather to promote the use of technologies by enterprises able to give value to research that would otherwise not be exploited to their full potential. It’s the positive aspect of this law and it’s also BirchBob’s first objective. To achieve this goal, BirchBob expands the network beyond each technology’s usual promoter-circles, which greatly enhances the probabilities of reaching their target clientele.

You will have guessed that the name BirchBob refers to senators Birch Bayh and Bob Doyle. Although not related to the famous legislators nor to the United States government, BirchBob also actively promotes know-how transfer between people having developed new technologies and those who want to use them, which was the essence of the 1980 Bayh-Dole Act. However, BirchBob is not limited to American university technologies, far from that.

Definitely international, BirchBob publishes in English, Spanish, French, Russian and Ukrainian (other languages will be added). It currently counts more than 25,000 licenses offered by 1,600 organizations (universities, enterprises, research centers, etc.) spread through an increasing number of countries including numerous emerging countries in the world of research.

Many offers (well-referenced), made available to large numbers of people (seeking solutions), is BirchBob’s answer toward helping commercialize each innovation. Browsing the site www.BirchBob.com, you will find, in a few minutes, more technologies meeting your criteria than you would after many days of research on the Internet. Don’t take our word for it: visit the site and use the search engine. You will be convinced. On top of it, it’s free!

BirchBob is a forum, increasingly visited, where people looking for solutions and specialists with the expertise to answer to those needs meet each other:

• Those seeking a technology, will find licenses at BirchBob that are rarely shown in publications and patent databases. Do the test: compare BirchBob with your favorite search engine. You will notice the relevance of licenses and the exhaustiveness of results found by BirchBob.
• Those who want to offer their know-how have access through BirchBob to a large audience of people searching for technologies. It’s a great advantage, even for universities that have large networks of graduates and also for multinational companies. With BirchBob, you constantly increase your network of contacts and your geographical coverage.
• Those offering their expertise to know-how buyers and sellers will get known by more people, especially by participating in BirchBob’s blog. This way, you will be in a position to help those calling upon your services to analyze a proposition or close a deal.

BirchBob supports the commercialization of innovation and respects the spirit of the Bayh-Dole Act as well as similar laws throughout the world. By making known the most technologies to the greatest number of entrepreneurs able to apply them, we hope that the work of researchers benefits the greatest number of people.

The conclusion to this first BirchBob Innovations bulletin belongs to the readers:

• Let us know what you think the determining factors for the commercialization of an innovation are.
• Propose subjects for articles you think are of priority interest to people selling, buying or commercializing know-how.

To do this, you are invited to use BirchBob Innovations’ blog.

Abraham Lincoln said that patents were equivalent to adding the “fuel of interest to the fire of genius”. Both types of contributions are welcomed in the bulletin and the blog. You have the floor.

Back to the headlines

Micro and nanotechnology commercialization: balance between exploration and exploitation
Innovative materials, components, and systems based on micro and nanotechnologies are recognized as promising growth innovators. The coming years the commercialization of micro and nanotechnology will be extended, but in order to commercialize micro and nanotechnology successfully, besides exploration a parallel focus should be aimed at exploitation. This paper presents in a brief and non-exhaustive manor a theoretical introduction and two company introductions related to exploitation and exploration focus embedded in the innovation development process to commercialize customer-oriented applications.
Canada / Proceedings of the MANCEF COMS2004 conference / 2005 / 5 p.

University Invention, Entrepreneurship, and Start-Ups
This paper by Celestine O. Chukumba and Richard A. Jensen examines the commercialization of university inventions in licensing to both start-up firms and established firms, and seek to determine when licensing to start-ups is more likely.
USA / Department of Economics and Econometrics, The University of Notre Dame / May 2005 / 33 p

DRUID Tenth Anniversary Summer Conference 2005 – Three papers focus on innovation commercialization
Here are some papers presented at the Danish research Unit for Industrials Dynamics summer 2005 conference on June 27-29, 2005: “Commercialization of Innovation by Canadian biotech Firms : Patways from ideas to Market”, “Commercializing free and open source software: The emergence of for-profit interests in a "free" world” and “Knowledge-based Entrepreneurship: The Organizational Side of Technology Commercialization”.
Europe / Danish Research Unit for Industrial Dynamics / June 2005, 70 p. (3 papers hereafter)

From Research to Commerce: Changing our Priorities about Commercialization
This paper examines existing “technology commercialization” policies and programs in the context of enhancing commercial activity in Canada’s knowledge-based economic sectors. The purpose is to assess the impact of such policies and programs on the ability of companies to generate business and grow.
Canada / Information Technology Association of Canada / June 2005 / 25 p.

Getting Smarter About Commercialization Opportunities. Four-dimensional market research can sharpen decision making
A new method, Disruptive Market Research™, is helping government, industry and universities do a better job of answering questions in their commercialization quests. More than 120 entrepreneurial organizations, ranging from the Department of Energy’s Pacific Northwest National Laboratory to Fortune 500 firms, have used the method to evaluate the commercial potential of new products and to shape business strategies. This article is available online on the National Journal of Technology Commercialization’s web site.
USA / TECHCOMM, The National Journal of Technology Commercialization / August-September 2005 / 3 p.

Intellectual Property Strategy and Business Strategy: Connections through Innovation Strategy
This paper, available on the web site of the Intellectual Property Research Institute of Australia, examines the relationships between business strategy, innovation strategy and intellectual property strategy. Case studies highlight best practice in intellectual property strategy and practice for the successful commercialisation of innovation.
Australia / Intellectual Property Research Institute of Australia / June 2005 / 66 p.

Knowledge-based Entrepreneurship: The Organizational Side of Technology Commercialization
New knowledge with commercial potential is continually created in academic institutions. How is it turned into economically valuable businesses? This paper by Ulrich Witt and Christian Zellner argues that the transfer is an entrepreneurial process.
Germany / Max-Planck-Institute / 2005 / 20 p.

Intellectual Property, Innovation and New product Development
This article by the World Intellectual Property Organization explores technological innovation as an interactive process made up of a number of distinct stages, beginning with the formulation of a novel idea/concept, followed by research and development (R&D), ending in the launch of a new or improved product in the marketplace. The article will highlight the practical IP issues relevant to each stage.
International / World Intellectual Property Organization  / July-August 2005 / 5 p.

Key Technologies for Europe
The "Key Technologies" Expert Group has approached the future of several key technologies which are all crucial for Europe's future. These research and technology fields are: biotechnology, nanotechnology, information technologies, communication technologies, transport technologies, energy technologies, environmental research, social sciences and humanities, manufacturing and materials technologies, health research, agricultural research, cognitive sciences, safety technologies, complexity research and systemic, research in the services sector. The experts reports on each key research or technology domains are now available for downloading.
Europe / European commission / 2005 / 15 reports / from few pages to more than 100 pages by report

Proceedings of the CSIR-WIPO Workshop On Negotiating Technology Licensing Agreements
Organized by WIPO in cooperation with the Council of Scientific and Industrial Research of India (CSIR), the Workshop provided practical knowledge in the field of technology transfer and licensing negotiations to CSIR personnel thus contributing to more effective transfer of technology. Here are the proceedings.
International / World Intellectual Property Organization  / July 2005 / 6 p.

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