Academics must meet business in the middle

Expert offers guidance

Research institutions need to interact with business and industry in a business-like way, acknowledging the importance of that culture, an economic development expert advises.

"This is not to suggest for a minute that we should pretend like we are them or overlook that we have different cultures and values to maintain," says Mark Crowell, associate vice chancellor for economic development and technology transfer at the University of North Carolina at Chapel Hill.

"The academic culture is pursuing knowledge for the sake of knowledge, and the business culture is not based on openness, but rather on proprietary information," Crowell says. "So once you acknowledge those differences then you need to have good policies and practices to find common ground and complete a deal."

Academic research institutions might hear a common complaint that they do not work with industry very well, and this is pushing businesses to do more work overseas, Crowell notes.

The reality is more complex. It’s not entirely the university’s fault when a research deal turns sour, but from the academic institution’s perspective, it’s important to have solid practices in place that will allow the institution to move forward efficiently and effectively in a research partnership with industry, Crowell says.

"On the university’s side we need to have a standard agreement that we can produce fairly quickly," Crowell advises. "Having this standard agreement is the best way we can identify the things that are important."

For example, the UNC-Chapel Hill contract says the university always maintains the right to publish, Crowell says.

"Some companies say they don’t want you to publish, and we communicate our intention to publish right up front," he adds.

"Another area is to have a clear and up-to-date intellectual property [IP] policy so you can communicate to your partner how you would handle ownership and licensing of any intellectual property," Crowell says. "I think everyone pretty much wants the same thing, but they’re not always quick to communicate it."

It’s important to keep in mind that nuances may exist in these policies, and flexibility is key to working with businesses, he notes.

"One thing I try not to do is say to a company, We have to own the IP, and any IP is ours forever and we’re not interested in your different way of handling that,’" Crowell says. "If we have a company coming in here to fund a clinical trial of a drug, and the company has already done research to discover and patent the drug and they come here because they’d like our help to do an efficacy trial of some type, such as a dosing trial, then if they contract with us we’re willing to let the company own any dosing method on that patent."

On the other hand, if during the course of the clinical trial it’s discovered that the drug, which is being studied as an asthma drug, could also be sued for a neurological disorder, then any patent based on treating neurologic disorder belongs to the research institution, Crowell adds.

"Ownership is a critical issue," he says. "We want to protect our right to revenue, but what we really want to do regarding the discoveries our faculty might make is to protect their right to continue to do that research no matter what direction it might take."

Once an institution gives up ownership, it might be difficult to continue the research, Crowell says.

Academic research sites also need to know the culture of the particular industry with which they form partnerships, Crowell says.

"Different industry sectors interact with universities in different ways," Crowell says. "We’re pharmaceutical, biotechnology and research based, and companies in that sector tend to be a bit more culturally understanding and accepting of our role in IP ownership."

Other industries may take the attitude that if they don’t retain all ownership rights then they are essentially paying for the research twice, he notes.

The key is to look at each partnership deal’s specific characteristics and to clearly communicate the institution’s policies.

"We try to maintain a good, business-friendly atmosphere," Crowell says. "We interact cordially and in a timely way, and we stick to the facts and positions we’re advocating."

When speaking with potential industry partners, it’s important to identify the issues, point by point, and to explain the position while being open to the other party’s explanations of their position, Crowell says.

"Hopefully, you’ll compromise and both of you will feel it’s a win-win," he adds.

If the industry partner requests an exemption to a policy then there should be a process for considering this. At UNC, it’s Crowell’s job to manage the policy and implement any alterations to it, but even he doesn’t have the authority to waive ownership rights, because this matter can only be approved by the president, he says.

"We tell companies that we generally won’t waive ownership rights, although technically I could take it to the president," Crowell explains. "Since it has to go with my recommendation, I can think of few circumstances in which I would do that."

UNC’s policy says the university owns inventions made by any research faculty when the inventions are created while the person is on staff and when it is related to the field of work for which the faculty member was hired, Crowell says.

"In all cases the university will forever maintain the right to practice that invention in our research lab," Crowell adds.

Two issues that sometimes become negotiation stumbling blocks include the option period and the use of an attorney.

A company might say they’d like a six-month option period for licensing any patents related to an invention, Crowell says.

"The company would like a lot of time before making a decision, but we prefer it to not be a long period because if the company doesn’t license it then we can license it to someone else," he says. "This issue seldom becomes a deal killer, but it does result in several rounds of back-and-forth discussion to determine the time frame."

When an invention is created, a company sometimes will say that if the research institution is going to license it and patent it, then the company wants its own patent lawyer involved, Crowell says. "We say, No, it has to be our attorney.’"

A research institution needs to make certain the patent is written in a way that gives the institution the maximum value from a research standpoint, whereas the company might have an incentive to have it written more narrowly, Crowell says.

As a compromise to the attorney issue, UNC will agree that if the company exercises its licensing option then the institution will allow the company’s lawyer to review every draft and will instruct the university’s counsel to take all reasonable input from the company’s counsel, Crowell says. "That usually satisfies them."

Research institutions also need to spell out all conflict of interest policies, keeping these up to date, and communicating these to industry partners, Crowell says.

UNC’s policy is that sunlight is the best disinfectant, so all conflicts of interest or potential ones are disclosed, Crowell says.

When there are significant conflicts of interest are posed by potential industry sponsors of research, then it will need to be reviewed by a conflict of interest committee before the research proceeds, he adds.

"We define a procedure by which our faculty discloses through university channels any conflicts they have and any conflicts that involve anything with significant financial interest," Crowell says.