Open Commercialization

The Ask - Universities should actively support open commercialization

Universities should create pathways for innovators to commercialize technologies in an open way (without using intellectual property) and provide institutional support for those efforts in the same way they do for traditional commercialization.

Background

Current university policies directs research towards commercialization paths using traditional intellectual property – patents, licenses, and other 'closed' models. Most universities have a Technology Transfer Department which is responsible for commercializing technology generated within the university. TT identifies patent-worthy technologies, secures the intellectual property, and identifies companies which are interested in licensing or (less frequently) buying it.

The Tech Transfer department is, however, a relatively new phenomenon initiated by the Bay-Dohl act in 1980. Prior to Bay-Dohl, all federally funded research remained the property of the federal government. However, the government only actually licensed or used 5% of that work. Bay-Dohl allowed non-profits, for-profits, and universities to elect to keep control of the intellectual property from federal research (with a few caveats). The goal of the 1980 Bay-Dohl act was for universities, non-profits, and for-profits to be more effective at commercializing federally funded research than the federal government.

Though the original focus of Bay-Dohl was to increase the percentage of federally funded research which saw the light of day, frequently the de-facto motivation for universities is to use technology licensing as an income stream, especially as federal and state research and education dollars have dried up.

An argument could be made that more intellectual property is being used today than prior to 1980. In 1999. 32% of disclosures (patents) resulted in licenses (ie were picked up by a company) as compared to only 5% prior to 1980. While this is a large improvement, 70% of applied research remains uncommercialized for a wide variety of reasons: the product market is too small to justify the patent/licensing costs, the patent is too hard to defend (consider software which is easy to copy, for example), the technology is still to early stage and is unclear if a commercial product could result, etc. In addition, Abrams et al reported in 2009 that 52% of 130 responding institutions (90% of respondents were universities and research institutions) tech transfer offices operated at a loss, meaning the service of commercialization technology COST money to the intitution..

Traditional commercialization using the patent-profit-protect model is therefore not sufficient to achieve the greatest impact for taxpayer dollars. New models of commercialization based open access to designs, information, and data with a focus on collaborative development are the next step for universities for three key reasons: greater impact, the inevitability of openness, and the rights of the researcher and the funder.

Increases University Impact

Projects commercialized in an open way can result in greater overall scientific impact and more research opportunities within the university, lead to increased grant revenues, convert a larger % of research outcomes into real-world products, and result in greater name recognition and prestige for the university.

Research Opportunities and Scientific Impact

THIS NEEDS WORK, LINKS, ETC. open communities yield faster innovation (find links/articles) - number of views - collaboration from non-academic sources - ...

Grant Opportunities

Increasing numbers of grant-making institutions, including governments, non-profits, and foundations, are requiring the results of projects to be publicly available. In addition, calls for projects which use crowd-based development and data collection on open platforms are also on the rise. Overall, the political and grant-giving climate is shifting towards a focus on projects which generate technology, data, and results which is placed in the public domain.

• In their 2012 report "The Future of Taxpayer Funded Research: Who will Control the Result", the Committee on Economic Development states that “openness, made possible by the digitization of information and the growth of the Internet, can lead to increased benefits to the society, and how it can improve specific domains such as healthcare and higher education.”
• The US Office of Scientific and Technology Policy announced 100 million dollars in funds to make federally funded research freely available to the public within 1 year. This may help push more companies towards open models because they will not be able to bury the results for several years while they get their intellectual property position secured.
• The Obama administration has created an open source, drupal based platform for it's Open Government and Open Data initiatives.. Also, 'Open Science' and 'Citizen Science' are two new categories for the White House 2013 “Champions of Change” nominations. This indicates a general push towards openness on the part of the White House.
• Many large companies and non-profits are focusing their grant-giving and education-supporting efforts on open source and open technology. Google's Summer of Code funds students to work on open software projects.. The Mozilla Foundation, the James L. Knight Foundation, USAID, Center for Open Science,

Augment/Improve Existing Technology Transfer Efforts

According to page 19 of Leung and Stevens 2010 report on the efficiency of Technology Transfer Departments, the stated goals of the department heads were to "translate research results to the real world" and "provide a faculty service". Only 11.5% of respondents stated "Revenue maximization" as the top driver for the department. Assuming these two are the primary goals of university technology transfer, open commercialization can augment these stated goals in the following ways:

Translating Research Results

Providing a Faculty Service

'Openness' is the natural outcome of technological change

Open innovation is the natural (and inevitable) outcome of our increasingly connected world.

Supports the rights of researchers and funders of research

It is the obligation of the university to provide innovators with an ethical route for sharing and/or commercializing their ideas and to not restrict access to information from those providing the funding (ie taxpayers for public institutions).

Current examples of open commercialization from universities

• Harvard Medical School Cancer Drug - http://www.ted.com/talks/jay_bradner_open_source_cancer_research.html, http://www.sciencecodex.com/new_designer_compound_treats_heart_failure_by_targeting_cell_nucleus-116841
• Sensorica.ca - An Open Value Network
• Photosynq.org - Michigan State University

Historical examples of open commercialization from universities

• World Wide Web - CERN
• Human genome project - Harvard

= open source hardware and/or software projects that have span out of universities as commercial ventures

Concept and research project

Most material collated from draft Google doc from Greg Austic [1]

Description

Greg Austic:

"Open commercialization intends to bring value (products, stories, platforms, etc.) to market without using intellectual property while actively sharing the product's design, concept, and methods.

• Provides consumers with the right to modify, change, or fix their products and engaging them to take part in the development

• The developer gives up direct control over their invention to the public, however, they also prevent a single individual or group from having restrictive control.

• Allows a smoother, less expensive, bootstrap-based path to market allowing the developer more control over the process

• Eliminates intellectual property (maybe think of how to say this in a less “final” way? Intellectual property is a highly-regarded value in academia -- could it be rephrased by saying SHARING of intellectual property? , allowing information to flow freely, and reducing upfront costs of commercialisation.

• Because the information is freely available, finding and modifying a product for a new market can be done by the users themselves which saves the developer money and time. EXAMPLES!!! Arduino. People can modify the plans but Arduino still holds onto the ability to manufacture products themselves. Their factory employs many local citizens to manufacture. Want an original Arduino? Buy from them. Want to hack your own? That is OK, too. (Ooops - now I see below that you discuss Arduino already)

• Product improvements can come from the user community, meaning less upfront development cost for devellopment EXAMPLES!!! Maybe Chris Anderson’s DIY Drones project?"

Greg Austic also writes [2]:

"1) Open Commercialization has more in common with traditional commercialization than you think. [...] A lot of what it means to commercialize (identifying markets, creating a market-ready product, interacting with users... etc) is the same in both cases and we also recognize both the immense value of that process, and that it is in no way easy!

2) Open Commercialization does not require that traditional commercialization disappear. A university could use open commercialization to bring technologies to market which are not appropriate for traditional commercialization. Tech Transfer managers frequently see perfectly good technologies "die on the vine" because the market is too small, it would be too hard to extract value in the market or enforce the patent, etc etc. So commercializing in an open way can add value to your tech portfolio by enabling you have greater impact on otherwise low-performing assets.

3) Open Commercialization and citizen science are both highly dependent on community. Community is the ecosystem which creates value, which members of that community can access. Universities are expert at creating, maintaining, and promoting communities - it's pretty much exactly what a university is. This puts universities in a highly experience position.

4) Successful example of open commercialization from a "peer" institution - usually no one wants to be first. I found that Arduino was a great example - it was very successful largely because it was open and created an effective user/creator community, and it came from the design institute in ivrea in torino - so it was in fact a universty project. It also is a great example of open begetting open - many open science projects have used arduino, and it's good to reinforce the idea that openness spreads. My example was talking about arduino and then the cicada project as an open commercialization and citizen science project which were intertwined.

Another example (which is so big it's not good to give on it's own) is that Tim Berner's Lee created the world wide web while at CERN (a publicly funded institution). Had CERN had policies in place the world would be completely different."

Examples

Originally compiled by Greg Austic:

• Arduino: completely open source and exploded).

• Kitware has been developing BSD-licensed open source frameworks for use in many areas of science and related areas for over 15 years, promoting shared ownership of the projects and the code by making it available to all under the same terms. Examples include VTK, ParaView, ITK, CMake, and many newer projects. These are developed collaboratively, and have opened up new markets to the company, which is privately owned and has been profitable since creation.

• StackExchange network (this one form StackOverflow) - system is proprietary, but all user-created data is CC BY SA and made easy accessible via apis and public database dumps.

• A very common model where a technology is open-source, but the money is made on consulting, examples (random, not necessarily the best): http://www.mongodb.org/

• Where the main engine or company-created content is open:

https://www.khanacademy.org/ (code here: https://github.com/Khan)

• Village Telco - mobile phone mesh networks for the developing world, built on open source protocols.

Discussion

Greg Austic:

"Current day commercialization has not kept up with needs the user, the developer, and the funder:

Users want the ability to change, modify, hack, or fix the items they buy and increasingly have the skills, tools, and spaces to do so.

Rise of the maker movement, backlash against DRM and restrictions on using audio, video, etc., OTHER EXAMPLES!!! For the non-techies to whom you are presenting, it might be helpful to set forth a historic example: we used to buy a TV/car and take it apart and fix it ourselves. Now those devices are increasingly walled-off?

Developers want to maximize the impact of their work in the world, receive credit for that impact, have the money to continue to innovate and invent, and (in some cases) earn a living from the process.

EXAMPLES FROM THE LITERATURE/MEDIA ABOUT DEVELOPER PREFERENCES/MOTIVATIONS?

Perhaps think about the mission of public/state universities to improve the life of citizens in the states that fund them? Ex: U-M mission to “serve the people of MIchigan and the world...” MSU states, “our mission is to advance knowledge and transform lives by … conducting research of the highest caliber that seeks to answer questions and create solutions in order to expand human understanding and make a positive difference, both locally and globally”

Large scale funders (venture capital, investment firms, etc.) want to maximize their return on investment and are the primary beneficiaries of traditional commercialization

Think about other funders to university projects: government agencies, private foundations, etc. They want to see their investment dollars bring the biggest posible impact (you want to think beyond private funders)

HOWEVER, individual funders are much more flexible in what they see as a return, especially with small sums. They want some combination of cash, useful products/services, value to society, value to some cause that is meaningful to them, etc. Individual’s attempts to push these preferences up the chain to institutional investors has been only partly successful.

Good examples: Kickstarter, This American Life, NPR... other things somewhere between donation and paying for a service/product

EXAMPLES FROM THE LITERATURE?

Commercialization assumes that bringing a product to market requires a large upfront investment with a traditional large scale investor, who then requires a significant reward for taking that risk.

Intellectual property ensures that reward by guaranteeing a market advantage over competitors. However, intellectual property can stifle the needs of the consumer and (counterintuitively) often reduces the control of the developer over their product Explain this some more.... how does holding control limit control?, while having a variety of negative secondary effects in the market like:

Patent trolls - [3] ; [4] ; [5]

The logic behind the patent troll:

They systematically sent thousands of letters out saying, "Hey, we own 27,000 patents, and here are some patents we think you infringe." They had a whole licensing group whose job was to monetize these patents, by threatening litigation and in some cases litigating. It didn't actually matter if you did your own analysis and got back to them and said, "Hey guys, we actually think we don't infringe." The response was something to the effect of, well, we have 27,000 patents—and you probably infringe something, so give us a licensing fee.

Patent trolls, are simply engaged in an effort to abuse the legal system to extract payments

This article questions the reasons for traditional commercialization, and the drive towards putting technology directly in the hands of business from universities. [6]

Hurdles:

Open commercialization efforts must address the following issues to be successful:

Reduce trade secrets as a solution for market competition while incentivizing collaboration

Good example: PJRC sells a completely open source piece of hardware called the Teensy. Because he has built such an amazing support system (forum, help, examples, libraries) on his website, consumers are dramatically less likely to purchase a Teensy knock-off from China - both because they are already at his site and the “buy” button is so close, and because they truly appreciate the value that PJRC brings to the market (personal trust).

Chinese knock off is actually more expensive

OTHER EXAMPLES!!! Agree that you need them … but am a bit stumped. Also suggest that you look at other sectors beyond maker-y or DIY. Can you find anything about open-source in health care? Education? Public works? etc. You want to have the widest variety as possible -- you don’t want too much weight to be on the Kickstarter end of things because if someone just doesn’t like DIYish stuff, theyll discount your whole argument.

Ensure a good system of crediting innovators and those who add value to the process

Sensorica.co has created an internal system of credit for distributing value to those who helped create a product.

The internet itself acts almost as a time-stamp for projects. Once something is on the web, it’s hard to argue who came up with something first!

OTHER EXAMPLES!!!

Train the market to recognize success by supporting it, both by buying products and by investing in it. NPR and affiliated shows (this american life, radiolab, etc.) have done an amazing job at this. Kickstarter has had similar effects.

Public expectation that publicy funded research will be publicly available

OTHER EXAMPLES!!!

Maybe you can look at how government-funded projects now require that articles (one form of intellectual property) written about them be in open-access journals to maximize reach?

Why is open commercialization possible now?

Enabling Communities:

1. Maker spaces, Hacker spaces, open science labs
2. Crowd-funding sites
3. Wikipedia and open access to learning resources

Lessons and models from 15+ years of open source software and also from years of funded projects that go dormant once funding to academia for them expires. A lot of good stuff gets abandoned … and could be, instead, built on by another group of “amateurs” or “experts”

Enabling Technologies:

Simplify collaborative development: Gitorious/Github, opendesignengine.net, google docs/Etherpad, etc.

Dramatic decrease in cost of electronics: LEDs, arduino, raspberry pi, etc.

Low cost prototyping tools: 3D printers, rep rap, laser cutters, etc.

Professional quality free software: Blender, Libre Office, Simple CV, free accounting tools, etc.

Innovators are simply opting out: Arduino, Limor Freid, PJRC, etc.

How do Universities fit in?

The core tenets of universities, especially publicly funded ones, are more consistent with open commercialization. The perceived problem is that Universities will lose money if they do not commercialize products using the traditional process.

Open Commercialization can also generate revenue streams for the university (for many universities this is going to be the only relevant argument :( )

Let’s assume that patenting a technology costs 40k for a typical university. An open technology would save that 40k IN ADDITION to any further fees required to maintain the license, enforce licenses, enforce the patent

EXAMPLES

Actual data about how much money is made through traditional commercialization at Universities

Here’s the data for Michigan public universities (MSU, UofM, Wayne State, etc.) [7]

Michigan State received 25 million in patent revenues in yr 2000 (most recent data I could find), of which one drug carboplatin was likely a majority of that value.

EXAMPLES

What are other benefits of open commercialization?

Technology which previously fell through the cracks because it was not a good fit for traditional commercialization will see the light of day.

Open data is an increasingly important component to access grants and further funding

Sets the university up as an innovator and leader

More consistent with the basic tenets of a university (especially for public and land grant universities)

May have jumped the gun when I inserted similar ideas earlier, but I think that if you can appeal to the fundamental mission of a state university, that’s the most powerful argument of all, so don’t bury it!

MORE!!!

What is the cost of traditional versus open commercialization for a similar project?

EXAMPLES AND DATA!!!

What are the skills, tools, and resources needed to commercialize a product in an open way?

Marketing (social networking)

Access to a large community who is interested in engaging the problem and The ability to build and maintain a community

Tools, space, and resources for development

Access to a wide-ranging skills

What are some examples of existing projects from universities which were commercialized in an open way?

EXAMPLES!!! Is MaKey MaKey an example??????

How could a university take part?

Change the basic agreements with professors to enable them to choose to commercialize in an open way, either immediately or after a prescribed period of time

Provide support through tech transfer or another department for their commercialization efforts Examples of universities taking organized actions to support open commercialization

EXAMPLES!!!

MORE??? WHAT ELSE?

Common arguments by tech transfer folks against open commercialization

The current system has been around for a long time, has lots of examples, and is well understood by Universities and supported by the government (Bay Dohl, STTR/SBIR, etc. etc.). This is a risky strategy that could not only result in less impact but could lose revenue for universities.

Loss of Revenue: 2009 study which suggests that tech transfer over half the times loses more than it makes, and only 14% are net revenue generators after payments to inventors. [8]

Other successful examples:

Provide support through tech transfer or another department for their commercialization efforts

Research Project

A research project by Greg Austic ([email protected]), of Kramer Lab, MSU

Greg Austic describes the provisional aim:

"An elegant, efficient, powerful but broad argument which is both effectively summarized but includes the ability to drill down into details, in support of open commercialization at universities or similar institutions. From this, anyone should be able to easily and quickly create their own presentations, letters, or local editorial pieces about this subject without having to comb the web for hours and hours."