1. IP and Technology Transfer from the Academic Perspective Robert L. Barchi, M.D., Ph.D. Provost University of Pennsylvania 122 College Hall Philadelphia, PA 19104-6303 (215) 898-7227; fax (215) 898-6567 www.upenn.edu/provost

2. Government Funding of Basic Research In Academia Reservoir of Knowledge Increased Efficiency New Companies (Jobs) Taxes Vannevar Bush Reservoir Theory of Knowledge Science, the Endless Frontier, 1945 New Industry

3. Source Citations for Industry Patents 1993-1994 Narin et al., Research Policy, 1997

4. The Bayh-Dole Act Public Law 96-517 Patent and Trademark Act of 1980 n Allow small business and non-profit organizations to retain title to innovations made under federally-funded research programs. n Promote investment by the private sector in commercialization of federally funded research discoveries for the public good.

5. Bayh-Dole Provisions n encourage collaboration with industry to promote the utilization of inventions; n universities must file patents on inventions they elect to own; n government retains non-exclusive license and march-in rights. Patent Application

6. Bayh-Dole: Impact on Patenting n 1969 - 1979 - 40% increase n 1979 - 1989 - 365% increase Number of new patents issued within 10 year periods:

7. AUTM FY99 Licensing Survey

9. Academic - industry technology transfer, the process of moving research results from academic laboratories to the marketplace, contributed $40 B to the economy, supported 270,000 jobs, and produced $5B in new tax revenues in FY1999. AUTM FY1999 Licensing Survey

10. Penn and other R-1 universities transfer technology to: nfacilitate the commercialization of research for the public good; npromote economic growth; ninduce closer ties to industry; nreward, retain, and recruit faculty; ngenerate income.

11. FY 2001 Academic Budget Total Revenue by Source Sponsored Programs - Direct Support 25% Non-Discretionary Service Revenue 15% Total = $1.428 Billion Gifts 4% Commonwealth Approp. 3% Tuition & Fees 34% Investment Income 8% School Other Revenue 2% Sponsored Programs - Indirect Cost Recovery 8%

12. Sponsored Project Activity by Fiscal Year Total Awards Received ($000)

13. Federal Indirect Cost Recovery Rate by Fiscal Year

14. FY 2001 Academic Budget Total Revenue by Source Sponsored Programs - Direct Support 25% Non-Discretionary Service Revenue 15% Total = $1.428 Billion Gifts 4% Commonwealth Approp. 3% Tuition & Fees 34% Investment Income 8% School Other Revenue 2% Sponsored Programs - Indirect Cost Recovery 8%

15. Enterprise Function Process ResearchDisclosure Intellectual Asset Development Commercialization Strategy Intellectual Property Protection Licenses

16. University Technology Transfer Productivity (1991-1999) $174 B Research 84,150 Disclosures Commercialization Strategy 23,044 Licenses 2,375 Start-Ups AUTM Licensing Surveys FY91- FY99 products Triage platforms 3% 27% 33% 15,947 Issued Patents 19% $2M/per disclosure 10% 27,918 Patent Applications 57%

17. Penn CTT Productivity - FY00 n 1,331 transactions n 221 new patent applications n 42 new patent options/licenses n 22 copyright licenses n 6 new start-up ventures n $30 MM income ($26 MM surplus) n 56 industry SRIs --- $15 MM

18. Tech Transfer Income FY94-98 Source:AUTM licensing surveys FY94-98

19. Bayh-Dole Requires Income Sharing Penn Patent Policy Intellectual Property Fund 5% Inventor’s Personal Share 30% Inventor’s Lab Share 15% Department 15% School 17.5% Research Foundation 17.5%

20. Non-Exclusive Licensing of Research Tools n Relieves faculty member of burden to provide the research tool n Generates a small income for the lab n Provides complete access to the public

21. Conflicting Values - Common Interest Conflicting Values - Common Interest UNIVERSITYINDUSTRY Commercialization of New and Useful Technologies Teaching Research Service Economic Development Profits Product R&D Knowledge for Knowledge’s Sake Academic Freedom Open Discourse Management of Knowledge for Profit Confidentiality Limited Public Disclosure

22. Conflict of Culture Engineering and Technology Area n “Industry paid for it, industry should own it” n true cost of university research n University retains IP rights n Academic freedom and publication n reasonable delays for IP protection n Short life cycle of new ideas n timely contracting and efficient practices

23. R&D Spending by Pharmaceutical Companies Source: PhRMA Annual Survey, 2000 * Estimated $1.4 billion - 1993 $4.5 billion - 1997 Amount spent by pharma on external alliances

24. Courtesy Biotechnology Industry Organization Humulin (Diabetes – Eli Lilly) Avonex (Multiple Sclerosis – Biogen) Epogen (Anemia – Amgen) Enbrel (Arthritis – Immunex) Herceptin (Breast cancer – Genentech) “Blockbuster” biotech drugs:

25. Financial ties between academic researchers and industry n Grants n Consulting n Equity n Boards of Directors n Scientific Advisory Boards n Speaking engagements n Authorship on ghostwritten papers n Promotional activities at symposia n Gifts and travel

26. Is Academic Research For Sale? Conflicts of Interest - institutional and individual - human subjects and laboratory research Angell, N Eng J Med 2000; 342: 1516-8

27. - Donna Shalala, Secretary of the Dept. of Health & Human Services May 7, 2000 Americans’ confidence in our academic research enterprise will unravel if researchers are not extremely cautious in their private interests and absolutely truthful in their research results, especially adverse events, in situations where their research activities and personal interests converge.

28. A Definition of COI n Conflicts of interest arise in situations in which primary and secondary interests co-exist, not just in those situations in which co-existing conflicts have led/may lead to undesirable outcomes (e.g. research misconduct). Cho et al., JAMA, 2000; 284; 2203-2208

29. COI Considerations n Commitment of time n Financial Interest n Research Integrity n Educational Mission

30. Managing COI at Penn n Conflict of Interest Standing Committee n CTT staff and members of the CISC present cases n Penn permits industry-sponsored research and limited equity with prior approval and ongoing oversight n Penn prohibits faculty from serving in a managerial or fiduciary role of licensees

31. Issues  Should universities promote, create, manage and/or invest in start-ups?  Should institutions conduct industry-sponsored research in which the university has a financial interest in the outcome?  Should faculty be permitted to be involved in start-ups as managers or directors?

32. n Should students be permitted to be employees of faculty start-ups? n Should students be allowed to participate in academic research projects supervised by faculty who have a financial interest in the outcome of the research? n Should faculty be permitted to take sponsored research from a start-up in which he/she has financial interest?

33. The “reservoir” has been filled. The challenge: make the water flow