1. The number one online magazine for innovation management practioners
Feature Article # 003-2011
University Partnerships
in the Era of University
Innovation Merchants
– a Practical Guide
for Companies
by
Melba Kurman
senior thought leader, analyst and expert on
university intellectual property strategy and innovation management
©Ymer&Partners AB All rights reserved.
www.innovationmanagement.se
ISBN: 978-91-86829-06-3

2. Knowledge in brief
Universities can be natural engines of open innovation since they do not develop
their own in-house research into products, nor do they compete for revenue in the same
marketplaces as companies. In the United States, innovation partnerships between
research universities and companies offer companies a number of competitive
advantages. University researchers conduct cutting edge research, much of which
they share freely and publicly. U.S. universities own hundreds of patents that they
license to companies. Universities have specialized facilities and lab equipment that
is usually available to companies for a fee.
Despite the potential benefits, partnerships between universities and businesses
can be complicated by ownership issues of intellectual property rights, misaligned
expectations, and differing culture and priorities. Companies should approach
potential university collaboration with appropriate expectations and the awareness
that there’s no single correct way to structure a university partnership. This article
offers practical guidance for innovation managers, product managers and executives
who are considering making university technical resources part of their open
innovation product development strategy. This article focuses on the innovation
ecosystem in the United States but many of the dynamics described may be
recognized by innovation managers worldwide.
Knowledge in practice
As companies today compete on their ability to create and sell innovative
products and services, universities continue to be a source of new ideas, expertise and
cutting-edge inventions. There’s no correct way to structure a university partnership.
Consider the experience of three companies: a small biotech company, a medium-
sized software company, and a large semiconductor company. Each approached the
university for different reasons and with different needs.
Three years later, the small biotech company licensed the rights to a university-
owned patent to develop a promising skin cancer treatment. The medium software
company owns two patents on an algorithm developed by a university professor while
she was under a consulting agreement; the company did not license these patents
from the university. The large semiconductor company sponsored $300,000 worth of
new lab equipment in a professor’s lab in exchange for receiving regular updates of
detailed testing data of new types of chip materials.
These examples demonstrate the range and variety of ways that a company can
tap into university know-how, resources, and technology. Many channels, both formal
and informal, connect university research labs to the commercial marketplace. An
innovation manager must carefully consider which channel works best for her goals,
and recognize the university’s unique academic culture and differing priorities.
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3. University Partnerships in the Era of University Innovation Merchants – a Practical Guide for Companies
about the author
Melba KurMan
Melba Kurman is an expert in university technology transfer strategy
with over 15 years of experience in bringing innovative technologies
to market. She has managed the commercialization of innovative
technology in both industry and university settings. She was
responsible for marketing Cornell University’s intellectual property
portfolio to industry partners and spent several years at Microsoft
as a product manager. Melba writes the popular Tech Transfer 2.0
blog, and is the president of Triple Helix Innovation, a consulting firm
dedicated to improving university and industry innovation partnerships.
The changing role
of U.S. universities
In the U.S., the innovation landscape has changed Open innovation is defined by Henry Chesbrough as
dramatically over the past 30 years, particularly a product development process in which companies
the innovation partnerships between company commercialize internal ideas by combining in-house
product development teams and university research knowledge and resources with those created outside
labs. In the 1970s and 1980s, as they shifted their the company. In Chesbrough’s terms, universities are
focus to shorter-term results, many Fortune 500 innovation explorers, performing basic science and
companies closed their in-house R&D labs. Today, discovery research that they hand off to companies
with some notable exceptions such as Microsoft, to develop into commercial products. Universities
IBM and Proctor & Gamble, most companies no can be a vital source of product innovation since
longer maintain their own in-house, early-stage, their primary focus is to discover new knowledge
exploratory scientific research organizations. that sometimes results in cutting-edge technologies.
Another powerful force that changed the innovation
landscape was the passage of federal legislation Companies look to universities for new product
called the Bayh-Dole Act, which in 1980, gave U.S. ideas, data and game-changing research and
universities the legal right to own patents on the technology. In contrast to the lingering stereotype
results of on-campus federally funded research, as of the academic ivory tower, today’s U.S.
long as the university was willing to pay to patent universities are well-funded research hubs that
the invention, and make a reasonable effort to create game-changing knowledge across a broad
find a business partner to develop the patent into range of industries. Universities receive billions
a commercial product. Finally, companies are of dollars in research sponsorships and grants
increasingly more comfortable with the process of from the government and companies. According
open innovation as a mode of product development. to data from the National Science Foundation,
Many companies, both large and small, have more than 60% of government funding for basic
become increasingly adept at feeding their product research flows to university labs. According to the
development pipelines by tapping into the expertise Association of University Technology Managers, in
and resources available at other organizations. 2009, companies paid for over $4 billion worth of
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