Research partners: UCCS creating legal terms to court private industry

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Dr. Dan Dandapani, dean of the UCCS College of Engineering and Applied Sciences, sees a bright future for the university in broadening its research programs with new sources of revenue.

For years universities had a love affair with the federal government when it came to research money.

But times have changed. The government has tightened its research spending, and universities are feeling the cold shoulder. Now universities, including the University of Colorado at Colorado Springs, are courting new partners — private industry.

But industry hasn’t always found the terms attractive. Companies often shied from university research and development relationships because it seemed that the university got the sweeter end of the deal — keeping all the intellectual property that industry helped finance, said Dan Dandapani, dean of UCCS College of Engineering and Applied Sciences.

To show its commitment, UCCS is drawing up new legal agreements that list the university and private industry as co-developers. It’s like a pre-nup of sorts: Each partner — the university and the company — that comes to the union with its own intellectual property walks away with it. It’s a shrewd move for UCCS, but one that could woo more industry partnerships.

“One of the major issues we’ve had in this relationship is that any time the industry wants to work with us, the intellectual property rules of the university make it very difficult to work with industry,” Dandapani said. “The rule at the university is if a faculty member is involved in a project and that project uses university’s facilities and graduate students and so on, then the intellectual property belongs to the university.”

Using a co-development model — which is how two private companies enter a relationship to develop a common technology that can be used by both — private industry will pay the university to work on a development project. The company may be looking to enhance an existing product. The company would keep its intellectual property. But UCCS would negotiate a cut of the future profits the company earns from the new or co-developed product.

Dandapani and UCCS lawyers are still developing the agreements, but he envisions a project plan that outlines the roles of UCCS and private industry. He expects to launch the first co-development project in the next two months. These partnerships could mean millions to the school, he said.

“What is the intellectual property they bring — that will all be in the contract along with the statement that (industry) gives the university so much back when they make profit out of this,” Dandapani said.

This new model should be more appealing to private industry, which had been nervous about sharing its intellectual property, said Michael Martensen, partner of Gregory and Martensen law firm, which specializes in intellectual property and patent law. He also serves on the board of directors of the El Pomar Institute for Innovation and Commercialization, which has a mission to assist individuals and organizations in transforming innovative ideas into economic growth.

“The (University) needs to look at this less like academic research and more of a business opportunity,” he said. “Theoretically, this model should be more efficient. It is the wave of the future with more interaction between business and industry.”

Universities have enjoyed their relationships with the government since the 1980s, when the Bayh-Dole Act said that universities have intellectual property control of their inventions and other intellectual property resulting from federally-funded research.

Since then, research dollars have rolled in, and universities have developed new products, filed for patents, spun out companies and licensed their research to the government and private companies. In 2010-11, the University of Colorado secured more than $790 million in sponsored research funding — $12 million at UCCS.

It’s the economy

But in this down economy, the federal government is expected to cut at least $1.2 trillion from its 10-year budget.

“What has changed nationally is that major universities are anticipating a decline in federal research funding, and that is driving all universities to do some soul searching about where research funding will come from in the future,” said Kate Tallman, CU Tech Transfer director of licensing. Her office manages all university partnerships, whether with the government or private industry.

“The other trend is industry is reducing its R&D budget. They are focused on product-driving development,” she said. “Put those two factors together and it makes sense there would be more collaboration.”

UCCS is well positioned for the new era of university-private industry development partnerships, she said.

“Their faculty, especially in the College of Engineering, is much more applied focus than basic science focus, and their work can be more relevant to industry,” she said.

Under the traditional agreement, a company would come up with a proposed budget and fund development, or sponsored research agreement. In exchange, the university would retain ownership and the company would have the option to license the new development.

“In (UCCS) College of Engineering co-development program — this allows for companies that have their own intellectual property built up around a product to work with the university on an aspect of their product without any kind of worry that the university would have a claim or control of their IP,” Tallman said.

Such an agreement could entice industry to work with the university, said John Reinert, retired Aeroflex Corporation R&D director now working with Dandapani on his Engineering and Applied Science Leadership Council.

“In industry there is a lot of emphasis on quickly developing product and getting it out there,” Reinert said. “The legal process (with the university) would take too much time, and industry is saying ‘this is not worth my time, we’ve got to move forward.’ “

Having legal agreements in place will make it easier for industry to get involved, he said.

“As opportunities come up, it’s now a month or two, three at the most and you can get things set up and actually start working,” he said.

UCCS has resources, including other universities, which can provide private industry with experts whom they otherwise could not afford to hire, Reinert said.

“At Aeroflex, everyone was developing products and if you had an idea for something, the thought was, ‘well, we don’t have the staff right now,’” Reinert said. “Co-development allows you to extend your reach without adding staff or overhead.”

Managing change

These new university-industry relationships must be entered into wisely, said Michael Larson, UCCS engineering professor and EPIIC chair of engineering and innovation. Professors want to be free to explore and develop without restrictions, but industry works on a deadline and a product-producing schedule. Uniting the two will be the tricky part, Larson said.

“Change is being thrust on us because of the economics of the situation,” Larson said. “The question is how we will manage that change so that universities don’t lose the very essence of how we are and how we operate.”

The new partnerships with private industry will not replace the more traditional government-sponsored research, Dandapani said. Research and discovery will continue.

“We have to be careful how we implement this — we want to make sure that we do not give up benefits for the students,” Dandapani said. “In a sense, I have to watch out that we are not becoming a private entity. It’s a fine line, and we have to be careful.”

But the new agreements over intellectual property are the liaisons of the future and a way for universities to keep their love of research alive, he said.

“The national dialogue is that the research that comes out of the university should be commercialized,” Dandapani said. “That is the way — with the funding from the National Science Foundation being so tight and other agencies being so tight, we need to work with industry.”