Secrets of University Tech Transfer: Navigating IP and Innovation with Jonathan Rosen

medDesign with Jonathan Rosen

Ty Hagler: All right. Hello, Jonathan, and welcome to the MedDesign podcast.

Jonathan Rosen: Thank you for inviting me. I'm excited about being here. Thank you.

Ty Hagler: I'm so tickled that you decided to come and join me for this. And I just, have a lot of admiration for your career as a teacher, as an innovator in the field of biomedical engineering. And one of the things we've been talking about is, through your teaching career, you've worked with a lot of university tech transfer offices, medical centers, working with innovative physicians and you've also prepared engineering students as they've gone through their intellectual property they've created through your course to then go through their office. Could you maybe talk about some of that process and how you've approached I guess that overall, like exit from the university system out into industry with new intellectual property?

Jonathan Rosen: That's a great place to start, Ty, and I'm excited about sharing some of my experiences over the 28 years of my teaching career, which is pretty much the second half of my overall career in biomedical engineering and product development. The first half was related very closely to corporate development, and the creation of new companies and about 25 years ago I decided it was really exciting to work with people that are being prepared to be innovators and how to learn how to develop new products rather than focusing on getting them to develop products during their academic education and training. And so two of our themes and throughout the master's program, where we've had over 250 graduates, both university Virginia and Boston university, that are all out there in the private sector now coming up with fantastic ideas, I'm sure. But the theme was very much not to develop products during your master's, but to learn how products are developed that includes regulatory sensitivity. It includes a careful awareness of validation and verification of the ideas that they come up with to show that they work and also the commercialization process. But that part has really been de-emphasized

A year and a half it's unlikely that they would come up with an idea, develop it and actually prepare it for licensing. Although it's happened, but it's not the focus.

So what we're doing now, or what we've been doing more recently, is inviting our students to spend 50 to 100 hours just watching what happens in the area of medicine that they're particularly interested in. And we've had a wonderful opportunity to work with over 100 clinicians, who have understood the value of an engineer looking at what they do as a clinician and understanding why it's being done that way and how it's being done that way. So that they can identify valuable contributions through focusing on improvement of patient care.

In their training, in, in the program that I developed, we focused really carefully on, emphasizing the value created towards patient care rather than the opportunity for accessing large markets.

Ty Hagler: So maybe for, and I know that wasn't the point of the course and of course in an academic educational environment, it really is about getting your first repetition in and because I think being a good innovator means you've seen this process multiple times. It's very rare that lightning strikes the first time that you go through this process.

You have to do multiple attempts, right? Before you finally get some wins into the marketplace. But for those handful of situations where your students have had lightning strike, then what was that process like? What happened after you capture lightning in a bottle?

Jonathan Rosen: It by definition had to be a partnership between biomedical engineering graduate student and one or more clinicians that served as clinical advisors and mentors during that lightning process. And It has happened a few times where we have agreements with the university because these are students that are paying tuition. and so the relationship within the university's policies, have to be agreed to that these master students would be treated as employees regarding the patent policy at the university. So we got that worked out first and then each university that I've worked with requires an invention disclosure of anything that's created during that employment or during that academic period.

Helped them develop patent disclosures, which basically described the invention. And then the university transfer office had an obligation to pass or take it on. So, they would look at it usually from, two perspectives and I'm not speaking as an official tech transfer, but my impression is that the first question that the department needed to answer was if we file a patent on this and go ahead and hire a patent attorney to develop it, what are the chances that it would be released as an actual patent?

Be patentable. And the second one is if it is patentable, what are the chances that patent would be of interest for potential licensee of that technology? So because there's a lot of costs involved in any of that process. So within a few months of a disclosure, the students found out whether the university was interested in pursuing it. And if the university said, thanks, but no, thanks, we're not interested. It's an add on to an existing patent or some other reason. Then , the students had the opportunity to take possession of that technology and go forward on their own to start a company or to license it on their own, but at their own cost.

If the university decided to go forward with it, and it has happened a few times, the potential for an invention was high enough that it was worth the significant cost on a part of the university to pursue it. And then that would be developed into a patentable technology. And what happens often is the student or the researcher chooses to create a new venture based on their own inventions. And so then they have to step aside from their academic role and take on the role of the licensee of their own technology. And the university policies are very clear about how that works and what role and what percentages will be available. And that's very different for each university. There's no standard or official or legal process of how proceeds are divided to each university.

Ty Hagler: That brings up one topic, which is just conflict of interest.

Jonathan Rosen: Yeah it sure does.

Ty Hagler: And a lot of that has to do with researchers, right? Who are supposed to be, like accurately representing, the scientific merits of their experiments, but then also have a financial incentive if the experiment goes in a positive direction.

Jonathan Rosen: And also along with that is the opportunity to continue to do research on the same topic academic researcher using NIH or NSF money or other government money. At the same time, they've started a company where they've licensed the first patent, then the company wants to also develop further on technologies and innovations based on those original ideas. It's really a joint sense of responsibility between the innovator and the technology transfer office set up reasonable and fair and equitable arrangements to specifically avoid that conflict. So some universities say, if you want to start your own company, then you have to give up your academic rights to receive part of the benefit from that commercialization.

Ty Hagler: So that swings the pendulum. One direction is probably too far.

Jonathan Rosen: That's right.

Ty Hagler: And then the other way the pendulum could swing.

Jonathan Rosen: Can be that Individual separates themselves from the venture that they've created and are not the CEO or chief technology officer. But there's an arrangement where their future inventions on the same topic can be added to the original patent through follow on licenses. In that case, at least technically there's no conflict and they can continue to do the research. Some researchers choose to leave that topic alone and I'm going to now work on something completely different and that would be another way to avoid potential conflict.

Ty Hagler: Okay.

So conflict of interest is one issue, but then there's, what the Bayh-Dole act of 1980 was that what I guess got this whole like office of tech transfer, like creation in the first place within universities. Was that, is that a fair way to think about that? What did that provoke or inspire or start the tech transfer process?

Jonathan Rosen: Absolutely

Yeah.

Ty Hagler: Yeah, do you mind explaining that? 'cause I've been trying to learn about Bayh-Dole recently and,

Jonathan Rosen: Significantly before 1980, under the Kennedy administration in the sixties and other administrations, there was an awareness and an effort to try to think about how to bring technologies and inventions and breakthrough science that's supported by the federal government back into the private sector so that more people could benefit from that invention. They didn't know how to do it exactly. And before 1980, the government owned all rights, absolutely. The universities couldn't do anything with them.

Ty Hagler: Okay.

Jonathan Rosen: At the time of Bayh-Dole, there were over 1200 inventions that were sitting in universities without tech transfer offices that were just sitting there because the government was unable or uninterested in following up and commercializing, the government really doesn't commercialize private ideas, that's not allowed. My understanding is not allowed. Only 5 percent of the inventions coming out of government supported research were being commercialized. Senator Bob Dole and Birch Bayh said let's see if we can find a better model where the goal is to bring ideas that come out of basic and applied research into the private and public sector so that more people can benefit from it. And now that was the basic motivation behind creating the Bayh-Dole Act in 1980.

.

Jonathan Rosen: And it's gone from zero tech transfer offices to over a thousand in years, 40 plus years since then.

And the number of inventions has gone into the hundreds of thousands. That have been successfully managed through Bayh-Dole and thousands of startup companies around the country and internationally have licensed technology from universities on that basis. So by all reasonable measures, Bayh-Dole has had an incredibly strong impact on innovation, not just in the medical area that I'm focused on, but in all areas.

Ty Hagler: How does that compare, like for US University, like federally funded IP and then transfer. How does that compare to other countries?

Jonathan Rosen: It's innovative in some ways, and it's restrictive in other ways.

Ty Hagler: Okay.

Jonathan Rosen: And so I can't give you the country by country comparison, but that the European Union has their own version of relationship between university research and private sector. I'm not versed in the details of that.

In the U.S., there are two parts of Bayh-Dole that are not often emphasized but are having a greater and greater impact. One is that the Bayh-Dole specifically says, yes, we want to bring that out into the public sector through licensing, but we want you to do it as quickly as possible.

We want it to be commercialized quickly and efficiently. And that's often a challenge for universities, even through licenses. Companies say, I like this and I want to license it, but you have to do more research before I'm ready to license it. And so sometimes it's six months and sometimes it's six years after the patent is issued, before the quality of the innovation is ready to be commercialized.

That often comes up against the requirement of Bayh-Dole to do it quickly and efficiently. If the government potentially has the opinion that you're taking too long, and that it, that somebody else could do it faster, they have the right to, Also license it to someone else, and that's referred to as march in rights. And it's part of the original arrangement and the law, and it has never been used successfully. It's been attempted several times where a small small company or a startup, even of the inventor, licenses it, on an exclusive basis, but it takes them forever to get funding and develop their own research.

And a large corporation that could do it in a few months says, I want to be able to license that also. So they petition the government to march in and require that an additional license be granted. Each time that's been requested, it's been turned down.

There have been between six and twelve attempts to encourage march in. None of them have resulted in actual march in rights. On the pharmaceutical side, it's much more relevant currently, and it's a very hot topic because march in rights also could be used to control the price of pharmaceuticals after they're commercialized. And they can say you have exclusive right, but you can't, have excessive profits based on government supported research. We're going to give that license non-exclusively to you and give it to other people to make a more competitive environment. Pharmaceutical response to that is that would have a negative impact on their incentives to be innovative and to support commercialization if they can't control exclusive rights to develop that and charge whatever price they're able to in the marketplace. So that's what's happening right now.

Ty Hagler: There's there's what federal subsidies that then go into a, a new drug development and to a certain degree, there's an enormous amount of cost associated with that, but then the entirety of society bears the, the reward to the pharmaceutical company that then is delivering the solution to the market.

Jonathan Rosen: And so there, there's an attempt to balance what's in the public's best interest. Which would be the lowest prices possible for healthcare. And what's in the best interest of corporations and the private sector who are required by their shareholders to maximize profits.

.

Jonathan Rosen: When those two objectives are in conflict. which they are right at the moment,

So in conflict, then it has a direct impact on what is funded at the university level. And one of the requirements of Bayh-Dole is that not just one contributing patent, but all of the patents are based on federally funded research. Related to, let's say, a specific drug. There are only, of all the drugs that are out there, out of thousands, literally thousands of drugs, only 22 meet that requirement. And so those are the only ones that would be eligible for march in. It's not something that could be used very broadly, unless Bayh-Dole is revised and replaced with a different model. So that may happen in future administrations. We don't know.

Ty Hagler: You could see if that gets enforced, it puts more of an incentive on the pharmaceutical companies to not accept federal funding for their R & D efforts so that there's not a upper limit on, or a more balanced approach to what the, upper level of profitability could be for what they develop.

Jonathan Rosen: And the starting point of all of that is how much government money is dedicated to science. NIH, NSF, and many other departments. If they're not supporting research at the university, Bayh-Dole is irrelevant.

Would be no potential to use it. And when in certain administrations have been very forward in encouraging and doubling or tripling commitments to NIH and other agencies. and the number of patents that came out of those peaks went up dramatically as well. It's a direct correlation. more research that's supported the more innovation that occurs. That's obvious, but true. on the other hand if the government chooses to decrease its commitment to research and science. And stops funding university research or significantly reduces it. Then the question is who's going to take up the support instead of the government. The private sector would be obvious, but then basically universities are doing contract research instead of basic research.

Possibility is that the universities themselves could use their endowments or other sources that are not government based to support basic research at the university level. And maybe both will happen. there's no indication now that there's been any decrease in basic research because of Bayh-Dole. But it's because there's also been a tremendous amount of support behind it. As long as that stays true, I think the next thing that'll happen is there'll be a revision of the basic model behind Bayh-Dole to make it more currently relevant in 1980, there wasn't even an internet yet. Everything like artificial intelligence and software in general has to be considered in a new light in terms of how that technology is made available to the public.

Ty Hagler: I'm curious if you had any advice for maybe either a medical innovator who say is working at a medical center within a university or from a commercial startup who is looking to collaborate with a medical innovator to commercialize the outputs of their ideas and the advice for how to navigate, we've talked about of intellectual property to the tech transfer office, conflict of interest, what's the best way to, those are some tricky issues that can tank your initiative

Jonathan Rosen: Absolutely.

Ty Hagler: add a whole lot more friction to a process that already has a lot

Jonathan Rosen: It's asking me what advice I could give about minimizing your taxes. The first answer is talk to the IRS.

And in, in this context, Absolutely the best mechanism for creating a constructive collaboration within a university structure is to work very closely with your tech transfer office. And quality and expertise housed within technology transfer offices has also increased dramatically, until about 10 years ago, tech transfer was mostly a cost. They would pay for things, but would hardly ever get anything licensed. And so it was considered by the university administrations mostly to be a service to their researchers. If you come up with something, yeah, we'll pay for a patent with very low expectations of any return to the university. Then there were a couple of vaccines and a couple of drugs that reduced to commercial applications that produced 100 million dollars in lawyer royalties. And then the universe has said, wait a minute, maybe this isn't a lost cause. And if we had more of those successful licenses, we could actually not just pay for tech transfer, but actually make it a positive contributor to university funding. and so there's more of that happening now than there was and they become more efficient at the process. Most universities also provide in university training on what it means to get a license, to get a patent and how it's licensed also how regulatory affairs impact that on the medical side. And I would encourage both physicians and engineers that are not already well versed to really use the opportunities provided by the university and outside to understand the process as well as they can. And I know Trig has worked very hard on the education side, and I totally applaud your efforts and others to make people understand what the process is. And then work in a collaborative way rather than a confrontational way with their own universities.

Ty Hagler: Exactly. It doesn't do anybody any good to just set I don't know, I guess just battle lines and start attacking each other. Cause that's not going to go anywhere constructive. It has to be something that, you know, if everybody's adding value into this commercialization process.

And making sure that there's appropriate incentives for each party who adds value along that, along the way,

Jonathan Rosen: And just a few months ago I had the opportunity and took advantage of retiring from teaching after 28 years. Thank you from the University of Virginia. And this is a good time to put in a small appreciation to the incredible efforts within University of Virginia to create working collaborations and create a collegial environment that encourages people to work together, to work across platforms, to solve problems that are introduced through the commercialization problem process successfully and it has really been a great milestone in my teaching career to work with the biomedical engineering department at UVA, and the tech transfer offices at the university.

Ty Hagler: You have just quite a legacy and I've certainly enjoyed learning from you as you've invited me to come in and either be part of some of your education teaching and get to be a guest lecturer from time to time. So I've certainly appreciated our collaboration over the years.

Jonathan Rosen: Now I've learned a tremendous amount from you and my students can't wait for your visits to our classes.

Ty Hagler: Those are always a lot of fun, particularly if we can do a skydiving T Rex's and teaching dogs to play baseball and all kinds of fun exercises to get kids to open up their thinking a bit.

Jonathan Rosen: I hope that continues. It's, we've had our collaboration for over 10 years now and I hope we can find new adventures to work on together.

Ty Hagler: Absolutely. There's always more innovation to discover and to talk about and to try to educate and help there be more effective medical innovators out there to solve meaningful problems. Absolutely.

Jonathan Rosen: I'm excited about that. It's the most exciting time in the history of medicine where engineering, gets to move from palliative care therapeutic and preventive care through technologies that were never available before. And so the opportunities now for innovation and their impact directly on patient care is higher than it's ever been.

So I encourage people to get into this field and come up with really great ideas because we need them.

Ty Hagler: Jonathan is there a book you might have read that could be helpful for an aspiring medical innovator aspiring biomedical engineer that has been helpful for you as you've either referenced or referred for somebody on that journey.

Jonathan Rosen: I would recommend two books. One that is really the most definitive description of the, idea creation and development, prototyping, and commercialization which is the book that came out of the Stanford group called bio design, and it's been revised at least once, maybe twice now.

It's the Bible and it tells you exactly what's involved in the work at Stanford remains one of the high points of what we can do nationally. So I would certainly recommend that as a basic reference, if you're interested in developing commercial models specifically, then any references related to creating a business model canvas. Which is about 10 year old idea, but you can put a whole design business plan on one page. And I have all my students do that to understand the connections between their idea and how to get it into the public sector. And so I would recommend that series of books. And finally, one of the ones that's had the biggest impact on me, is Clay Christensen's approach as a deceased, but now honored as a legend at Harvard Business School and his concept of people wanting to get jobs done rather than just being customers. And that's had a huge impact on my own commercialization. And I would, if you had those three books in your library, you'd be off to a good start. And the last one is to hire Trig.

Ty Hagler: That's not a book. But I think to have a conversation with me, you get more book references than anything else. Very good.

Jonathan for people that are looking to reach out to you and connect with you, what's the best way for our listeners to to find you?

Jonathan Rosen: They can write to me directly on my university email, which is still active, it's jrmg@virginia.edu.

Am pretty good at responding to them. So I'm happy to do that. the most active networking that I do is through LinkedIn and you can reach me directly in my LinkedIn account. And if you invite me to connect. and reference podcast or anything else, then I'd be happy to accept your invitation and then you would have access to my 4, 000 first level contacts there. I'd be happy to do that.

Ty Hagler: Wonderful. All right. Jonathan, it's always good to see you and talk with you. Thanks so much for taking the time to join me today.

Jonathan Rosen: It's been a great pleasure. Thanks for the invitation.

‍