Tech Transfers On the Rise

On a blustery winter afternoon in January, the Center for Blood Research at the Harvard Medical School (HMS) held its first-ever product conference in an attempt to woo bidders for its new technologies.

Approximately 50 venture capitalists and entrepreneurs turned out for a plush hotel conference room reception to witness a two-hour demonstration of the fruits of cutting-edge research in immunology—innovations that might also be invaluable to the biotechnology industry.

The conference reflects an insurgent trend at Harvard called “technology transfer”—the process of selling discoveries made at universities to private firms.

The practice is touted by advocates as a way to expedite the movement of important discoveries out of the academy and into mainstream usage—and to turn a profit for universities in the process. Tech transfer promises to bring in millions of dollars in royalties to the University and its professors—a total of nearly $20 million last year for Harvard alone.

Although professors embrace the idea of increased funding for their research, many point to the ethical issues that could be raised by allowing private firms to fund research in which they have a definite interest.

“There are really serious conflicts of interest that naturally can’t be avoided,” says Baird Professor of Science, Emeritus, Dudley R. Herschbach.

University officials acknowledge these concerns but insist they should not preclude Harvard from exploring the benefits tech transfer has to offer.

Though Harvard has long lagged behind other major universities like MIT in capitalizing on tech transfer, University President Lawrence H. Summers and Provost Steven E. Hyman have prioritized expanding tech transfer as a way to find practical applications for Harvard’s discoveries.

The move comes from a president and a provost who have made the sciences a focus of their tenure.

Summers and Hyman have begun discussing possible strategies to facilitate the practice, and in a watershed speech last fall, Hyman encouraged professors to seriously consider the process.

Last November, the University even sponsored a workshop to counsel graduate students and professors on the process of starting their own biotechnology companies with Harvard-patented technology.

And though no concrete changes have yet been made, Hyman says that his goal is “making [tech transfer] something that is considered a normal thing to do if you have a discovery that has utility to the public.”

Catching Up on Cashing In

Universities have long been permitted to utilize intellectual property of their own creation for profit. But the vast majority of university research is at least partially supported by federal funds, which has historically allowed the government to retain title to those discoveries.

Until 1980, universities had to cut through significant amounts of red tape before being allowed to patent and sell discoveries made with the aid of federal funds. Under that system, very few inventions in academia ever made it into the mainstream.

Over the years, however, the government came to realize the importance of discoveries made in the ivory tower and the vast profits that could be garnered from facilitating tech transfer.

The result was the Bayh-Dole Act of 1980, which loosened restrictions and spurred universities nationwide to set up programs to facilitate the practice.

In the intervening years, tech transfer has taken off and yielded impressive results. In 2000 alone, the practice netted $1 billion for universities nationwide, according to the Association of University Technology Managers.

And now, after years of watching from the sidelines, Harvard is looking to capitalize on the practice.

The University already has two offices that facilitate its $20 million-a-year tech transfer business: the Office for Technology Licensing (OTL), which coordinates tech transfer at HMS and the Harvard School of Dental Medicine, and the Office for Technology and Trademark Licensing (OTTL), which handles the procedure at the rest of the University.

Despite the increased emphasis that Summers and Hyman have placed on tech transfer, the administration has not yet made any policy changes. University officials say that the transformation that must take place is not a structural one.

“What we’re engaged in talking about is how we change the culture so that we do a better job of moving discoveries out of our labs into the commercial sector in a way that protects our academic values and avoids harmful conflicts of interest,” Hyman said. “Cultural change isn’t something that happens over night.”

Hyman says the University may even sponsor workshops on tech transfer.

But according to Joyce Brinton, who directs OTTL, the presence of these offices has already helped Harvard to become more competitive, coordinating and channeling industrial interest in university research, which has surged in recent years.

“Over the years, the pace of activity has increased as more companies are realizing that universities generate inventions that the companies can license, develop and ultimately market,” she writes in an e-mail. “In addition the venture capital community has increased its interest in starting companies based on university technology.”

HMS has been an early beneficiary of this increased interest, accounting for over 80 percent of Harvard’s tech transfer revenues last year.

McKay Professor of Applied Physics Jene A. Golovchenko says part of the reason that medical discoveries are responsible for most of the revenue is that drug companies are more willing to spend money on risky projects.

“I think the drug companies have been much more active in terms of interacting with universities,” he says. “I think they’re used to gambling.”

Advocates say everyone at Harvard stands to benefit from such profligate industry spending—for every sale brokered by the University, Harvard keeps 15 percent of royalties, the inventor’s school keeps 20 percent and the professor and his department keep the remaining 65 percent.

Selling Without Selling Out

But some at Harvard fear these profits are coming at the expense of the University’s academic integrity.

While many are excited about the possibilities of tech transfer, some take issue with the inherent ethical considerations.

“If you get in a situation where you get half of your professors trying to run companies as well as be professors, you get a situation where one professor’s company may be competing with another professor’s company—a terrible situation,” Herschbach says.

Even Golovchenko—a recruit from Bell Labs—expressed serious reservations about the conflicts of interest posed by tech transfer.

The University has been careful to lay down strict guidelines for its relationship with industry. Each school has its own conflict of interest policy requiring professors to report their financial interests. And the Faculty of Arts and Sciences (FAS), in which many of the most important scientific discoveries are made, has committees on professional conduct and research policy to ensure compliance.

“The difficult questions aren’t the ones concerned with what most would agree is unethical behavior,” writes Paul C. Martin, dean of research and information technology for FAS, in an e-mail. “The questions that continually arise have to do with the ‘very light gray’ area—how best to prevent real or apparent conflicts of interest or commitment.”

But despite careful oversight, the potential for compromising academic integrity exists anytime industry gets behind an academic project, critics say. The work of John D. Graham, former director of the Center for Risk Analysis at the Harvard School of Public Health and current director of the Office of Information and Regulatory Affairs at the White House, is one example of industry-backed research that critics have accused of being too pro-business.

But Hyman says realizing profit from discoveries does not necessarily mean “selling one’s soul” to industry.

“It’s not unreasonable for the University and inventor to recover gains from licensing a patent, much of which goes back into funding for more research,” he says.

The University’s main goal in pursuing tech transfer is bridging the gulf between the academy and the real world, according to Hyman.

“I think technology transfer is widely misunderstood at Harvard and at many places,” he says. “The goal of tech transfer is to get technology commercialized in order to benefit people.”

Professors also applaud tech transfer for its potential to make significant ivory tower discoveries accessible and useful to the population at large.

“You could make a great discovery that would help mankind, and nobody will use it, because they can’t make a profit,” Golovchenko says. “In fact, your discovery might end up being sterile.”

And despite its potential drawbacks, tech transfer is vital to keeping Harvard on the cutting edge of research, Golovchenko says.

“Ultimately, how does a university stay relevant? This is how.”

—Staff writer Stephen M. Marks can be reached at marks@fas.harvard.edu.