CU Technology Transfer and SBIRs

1. CU Technology Transfer and SBIRs/STTRs David N. Allen Assoc. Vice President for Technology Transfer david.allen@cu.edu 303 7351688

2. 2 The Presentation Today Background on Technology Transfer at CU Some Gating Issues for Determining CU Involvement � Whose Asset? If proposed research relates to CU IP If proposed research relates to Company IP Administrative and contract processes Conflict of Interest issues Three cases for discussion Questions?

3. 3 CU Technology Transfer Office Strategic plan completed in June 2002 Aggressive first year goals were set The strategic plan was well received by university and business communities Annual report chronicles achievements General achievement of goals Well positioned for further improvement and growth Appreciable accomplishments of portfolio companies

4. 4 Technology Transfer Performance

5. 5 Understanding the Culture of a Research University CU ranks in top 10 among all institutions in federal R&D funding. This defines the research culture at CU. Inventions seldom occur within a context of a well defined market problem. Faculty optimize their research for publication and to secure further funding as determined by peer review � not commercial drivers. Typically �raw technology� � incomplete, unrefined, and years from market.

6. 6 Starting Points for Engaging CU Basic questions asked early on Who has initiated the proposal � CU investigator or company? Is a CU investigator a Principal Investigator? Does he/she have an interest in the company? What is the purpose of the proposed research � to advance CU IP or company IP?

7. 7 For CU Owned IP If the IP is owned by CU, i.e. inventor is a CU employee, then this is a conventional license situation and subject to CU IP policy and likely subject to the Bayh-Dole Act. Some characteristics of Bayh-Dole Empowered by the Federal Government as condition of research funding, Bayh-Dole Act of 1980 (Public Law 96-517) The Bayh-Dole Act allows CU to assert title to inventions and license the technology to industry

8. 8 University IP Provisions, cont�d Ownership of IP assigned to CU if: employee of University grant or contract obligation specifies CU ownership substantial use of University resources students exempted (except above or as part of CU IP) must relate to individual�s research endeavors conflict resolution process involving CU�s Principal Technology Transfer Officer and Committee on University Discoveries Inventors and their labs receive 50% of royalty

9. 9 What Does CU Want from a Licensee? A true commitment to further develop and eventually commercialize the technology An understanding of university values and constraints, e.g., publication and Bayh-Dole A fair price, uncomplicated royalty terms and an opportunity to share in the upside Ability to retrieve the IP if licensee doesn�t produce Payment of patent costs and other terms standard to public university licenses

10. 10 Licensing Terms Exclusive versus nonexclusive rights Field(s) of use � geographic, market Economic terms � royalty, sublicense royalty, performance payments, annual fees and/or equity Diligence terms � development and commercial Rights to future and/or joint IP Patent prosecution and control Warranties, termination and dispute resolution See www.cu.edu/techtransfer/campus/forms.html

11. 11 How a Company Receives License Rights to CU IP Terms can be agreed on at proposal stage or during review stage, up to award Typically a time limited option to an exclusive license is granted to the company Terms ranges or agree to agree on terms We expect that any patent fees will be paid by company during this time License becomes more complicated if a CU employee has an interest in the firm.

12. 12 For Company Owned IP What is the proposed research objective (discovery oriented or evaluative oriented) and how critical is CU to the objective? Will any new or improvement IP be developed by CU employees or are significant CU technical resources being used? The licensing reality for us � we want the company to succeed and there are many ways for the company to gain rights to CU IP, e.g. field of use or non-exclusive license or if more substantial, an exclusive license

13. 13 Administrative and Contract Processes CU investigator initiated STTRs routed through Campus Office of Contracts and Grants Treated as sponsored research contracts Facilities and Administrative costs depend on particular campus Separate IP agreement negotiated by TTO CU treated as a sub-contractor in SBIRs routed through OCG at PI�s campus For example, Boulder campus See: www.colorado.edu/ocg/

14. 14 Some Conflict of Interest (COI) Considerations COI management is mandated by Feds if: Compensation of PI exceeds $10K/year Equity interest of PI exceeds $10K or Ownership of PI interest exceeds 5% University�s Obligations Know who these PIs are Assess the COI situation -- manage, reduce or eliminate the source of the conflict (management plan) Educate and adjudicate

15. 15 Potential COI Situations Potential for Conflicts Using SBIR & STTRs Faculty time spent on commercial endeavors (departmental concern) Research sponsorship by faculty�owned firms (OCG Concern) Overreaching consulting arrangements (TTO Concern) Students engaged in faculty-owned firms (departmental concern) Use of University space or resources (departmental concern)

16. 16 Addressing COI Issues Disclosure � The first step To whom? Department Chair, Grants Office, TTO, IRB, Campus Compliance Officer, University Counsel CU groups get together and create a COI Management Plan � The second step Not necessary for all �conflicts� The role of the COI committee The role of the signatories to the management plan

17. 17 Case 1 Company contracts w/ CU to provide (make through known approach) a compound to develop a high throughput screen company is developing under an SBIR. SBIR to develop their IP, no rights by CU to their technology, no license to CU IP needed. Our obligations and concerns met by Full disclosure of IP, project, and commercial intent Clarified company and CU IP ownership and no CU IP mingling

18. 18 Case 2 CU PI initiates a STTR to validate a novel delivery method for a known compound to treat a disease. CU owns the novel use and delivery method IP. CU PI wrote grant application, company submitted application. Company received a limited term exclusive option to new, improved or joint IP created during grant project.

19. 19 Case 3 Entrepreneur approaches TTO and seeks to develop CU IP. Over a few months develops a good business plan. Seeks SBIR for proof of concept. Entrepreneur can serve as Co-PI employee of a company that would be started if SBIR awarded. Due to quality of person and high motivation, CU agrees to address licensing issues if grant is awarded. Industry standard terms would apply.

20. 20 Continuing TTO Growth Trajectory Annual report specifies enhanced activities Job #1 continues to be gaining confidence of faculty inventors Maintaining academic values and enhancing entrepreneurship Improving/streamlining operations Identifying seasoned entrepreneurial management and seed capital for start-ups Nov. 4th � 2nd Annual Technology Transfer awards event

21. 21 Why Choose CU as a Partner? World class research faculty and institutional reputation World class research facilities Colorado�s record of winning SBIR awards can be extended to STTRs The CU TTO knows industry culture and needs and will balance that with university culture and needs Give us a try!

22. 22 Thanks for Your Attention Questions? Visit us at www.cu.edu/techtransfer