Cash Strapped Colleges and Tech Firms Speed Up Deals

Colleges and Tech Firms Speed Up Deals

Mobile technology seems to change almost as quickly as it’s changing the way the world communicates.

The halls of higher learning? Not quite so speedy.

So when Motorola Mobility, an arm of Google, wanted to collaborate with not one but eight major research universities, the process promised to be hugely complicated.

Negotiations over such agreements have historically been measured in not days or weeks, but months, because of haggling over who owns the intellectual property rights, and when and whether findings can be published.

But something unexpected happened: Propelled by the need to supplant flat federal research spending, universities have started streamlining the way they do business with the private sector, suddenly lowering a longstanding obstacle to corporate-sponsored research.

Motorola has come up with a game plan for all eight of its partner universities—CalTech, Carnegie Mellon, Harvard, the University of Illinois at Urbana-Champaign, MIT, Stanford, Texas A&M, and Virginia Tech—and will now use that single, simple template to add new projects in less than 30 days and without additional negotiation.

“We know there’s now a basic agreement in place,” says Martin Schmidt, associate provost at MIT in charge of technology licensing and corporate relations.

That foundation on which new contracts can be added lets the academic researchers publish their results, but allows the corporate sponsors to make sure that nothing proprietary is disclosed, or gives them time to file patent applications.

The Multi-University Research Agreement, or MURA—fondness for acronyms being at least one thing technology companies and higher education have in common—is already being considered a model for other deals.

“The idea that we would have these high-level discussions and agreements with companies is going to reduce friction through the system,” says Schmidt, who, like a growing number of his counterparts at other institutions, has personal experience in private industry and as an entrepreneur. “We’ll be much more agile in responding to industry needs.”

Other universities are going further still. To eliminate the greatest sticking point, the University of Minnesota now gives companies that sponsor research the right to pay a fee up front, equal to the greater of 10 percent of the contract amount or $15,000, for the intellectual property rights. If the research results in a product whose annual sales exceed $20 million, the university gets a royalty of 1 percent.

“Forget how long it took to do a contract,” says Jay Schrankler, director of the university’s Office for Technology Commercialization, who formerly worked at Honeywell. “It was impossible for me to use an invention that I paid for without a lot of haggling.”

Pennsylvania State University has agreed to hand over the intellectual property rights to corporate sponsors of research without charge.

“These negotiations were consuming large amounts of time, both at the universities and in the companies,” says Ron Huss, associate vice president for research and technology transfer at Penn State.

They were also costing more money than the licensing revenue was bringing in, an analysis at Penn State found. “When we looked at revenue that was being generated, it was small, so we were holding onto this intellectual property very tightly for no real benefit,” Huss says.

That’s one of the more worrying reasons hidden behind this otherwise positive trend. Another is that companies that once did their own research and development have sharply cut it back. “Those big companies have gotten out of that overhead of R&D, and now they’re depending on us,” Schrankler of the University of Minnesota says.

Universities, meanwhile—contending with sagging federal spending on research—are eager for corporate money. Industry-sponsored research inched up only 2.4 percent last year, after falling 6 percent the year before, according to the Association of University Technology Managers (AUTM), and accounts for only about $4 billion of the nearly $64 billion provided by all sources for university research. The number of new commercial products created dropped 10 percent last year.

Penn State and the University of Minnesota haven’t yet seen an increase in revenue from easing their contract procedures, but both report a rise in interest, and expect the financial benefits to materialize soon.

There is also broad support from policymakers who see university research as key to the economy.

“These and other similar agreements can increase U.S. economic competitiveness by encouraging U.S.-based companies to fund additional research at our universities,” says Thomas Kalil, deputy director for technology and innovation at the president’s Office of Science and Technology Policy.

Not all is peace and harmony. Some in academia bristle at the idea that it was their side of the table alone that held up negotiations on agreements with the private sector.

“That’s unfair. We can get something done in a week here and when we give it to the corporate lawyers, it will sit there for months,” Schrankler says. “It is a two-way street.”

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