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Bridges between university inventors and companies

Even in times of crisis, clients expect their suppliers to offer new products and new services. The most successful companies are those with the strongest innovation power. In their search for new ideas, life science companies are increasingly resorting to new inventions coming out of universities. For two decades, the Technology Licensing Office (TLB) in Karlsruhe has been the prime contact for patents requested by Baden-Württemberg universities, and, in terms of success, the TLB is Germany’s best patent exploitation office. In the following interview, Thomas Schurr, TLB freelancer in charge of business development, licensing and start-up support, talks about the reservations that science and business have about each other when it comes to inventions.

Thomas Schurr, TLB freelancer in the fields of business development, exploitation and start-up support. © Kratt

Every year, the TLB receives 120 to 150 invention notifications from universities. Are there many notifications from the field of life sciences?

The number of inventions in the life sciences and the physical sciences are almost on a par. And this is also the case for the 40 inventions or so for which patents are filed following thorough investigations. It is important to realise that there are differences between engineering and life sciences inventions: inventions from the engineering sciences usually become profitable quickly; in the life sciences, it takes a very long time to obtain marketing authorisation. However, the profits obtained with life science products can be considerably higher. Pharmaceutical inventions are the most interesting because they have the biggest economic value. Therefore, the majority of exploitations of inventions occur in the areas of pharma and medicine, followed by the fields of medical technology/medical products and chemistry/biotechnology.

What are the biggest challenges with regard to the exploitation of university inventions?

The biggest challenge is to recognise the innovation potential of an invention and find the correct licensees. With regard to inventions in the physical sciences, the biggest challenge is the existence of a fragmented company landscape, in particular with regard to suppliers. In the life sciences, the exploitation of inventions becomes more complicated due to the variable innovation behaviour of companies that are under great economic pressure. This requires us to continuously put flexible exploitation strategies in place. In addition, patent application costs are very high. In order to make pharmaceutical substances interesting for potential licensees, we need to spend a lot of money filing patents in as many countries as possible. And this is only justified when we believe that the demand is high enough. Big pharmaceutical companies are always looking for innovations as a matter of urgency, but they also require preclinical data, which universities or university hospitals often cannot provide. At the TLB, we are increasingly focusing on start-up companies or small- and medium-sized companies that have enough venture capital to advance their products and make them interesting for big pharmaceutical companies.

Has the exploitation of inventions become more complicated over the last few years, especially with regard to a growing number of patent protection laws and an increasing number of inventions in general? 

We work with first-class patent attorneys, who are always up to date with the latest developments, and we also have two attorneys at the TLB, so new patent protection laws are no problem for us. We regard the increasing number of inventions as very positive, since the TLB portfolio is also constantly expanding. This means that we are more likely to be able to form patent families in order to offer companies completely new solutions. With this I mean the combination of patents from completely different technical areas with the aim of finding joint solutions to problems. In this case, technology-related software patents play an important role; and I believe that such patents will increase in future. Software is very interesting for our exploitation activities because it is a cross-sector topic that is relevant to all sectors and businesses.

Patentability and economic potential play a key role in the evaluation of inventions. © DauthKaun

The TLB assesses inventions not only on their patentability with regard to legal specifications, but also in terms of their economic exploitation. What criteria must be fulfilled?

Besides the technical feasibility, we also assess the added value and the market advantage from the perspective of potential licensees. We go out beyond the well-trodden tracks and look for new opportunities and markets which companies themselves would not necessarily think of. The extent of protection, formulated in patent claims and the selection of countries, must also be large enough to be of value. If the extent of protection is too limited or if the patent can easily be got around in the technical sense, this considerably decreases the economic value of an invention. It is also a disadvantage if potential patent violations can only be proven with difficulty. The costs for product development and market introduction must also be covered in an acceptable period of time. In the experience of the TLB, the time required to bring a product to marketability in fields such as mechanical engineering and process engineering is around three to five years. In contrast, pharmaceutical or medical technology inventions that need to be tested in clinical studies, have a development time of up to ten years. Considering that patents are only protected for 20 years, it goes without saying that time is an important factor when assessing an invention. Finally, the costs of patenting need to be in an acceptable proportion to potentially achievable profits. The more progress that has been made with a certain invention and the bigger the market, the greater the expected cost-benefit ratio.

What role does the inventor play in the exploitation of his/her patent?

The continuous and active cooperation of the inventor is a basic prerequisite for the successful exploitation of a filed property right. The inventor, i.e. the person who possesses the necessary know-how, must be prepared to further develop the product in the year following patent application in an application-oriented way. The proof of concept is the minimum requirement of companies, because this helps to better assess the cost-benefit ratio. In many cases, the presentation of a prototype is a major prerequisite for the further commitment of a company. 

Why can innovations be turned into reality more quickly with small- and medium-sized companies than with big companies?

The most important innovations are no longer the exclusive domain of big companies, instead they mainly happen in small- and medium-sized (SME) enterprises. Working with SMEs does not require us to deal with five different departments; we are closer to the actual decision-makers right from the outset, and these are the people with whom we usually discuss the venture from the word go. SMEs are far closer to clients because their marketing, sales, product development and service departments work more closely together. This enables them to quickly recognise trends, client requirements and market potential and hence to better assess the economic potential of an invention. The managers of SMEs are more flexible and more willing to take risks. They are entrepreneurs and not business administrators. That is why the TLB is an attractive partner for SMEs, which often have a backlog demand with regard to their own patent portfolio. For internationally active SMEs, patent-protected inventions are of great importance.

Is there still a gap between science and business with regard to the exploitation of inventions?

In Germany, there is hardly any interchangeability between science and business, something that is already normal in other countries. Professional careers are usually pursued in one system, which cements the existing way of thinking. Generally, the goal of the majority of scientists is not a product but new insights. The perspective of entrepreneurs, i.e. the provision of solutions for a potential market, is often foreign ground to scientists and researchers. Companies that cooperate with universities usually expect quick results. An institute director wants to hire the best scientists - doctoral students, postdoctoral students. This can only be achieved through cooperations that guarantee the long-term financing of such positions. In many cases, universities and companies have contradictory interests. Relations between science and SMEs are often tricky. SMEs very often assume that big companies want to keep the major part of university inventions to themselves, thus blocking the access to these idea sources. One of our major tasks is to bring together inventors and company representatives, and show them how they can benefit from each other.

University start-ups are a very prominent topic. How is the economic crisis affecting the ambition of university graduates to establish their own companies? 

A professor once said: "If the economy is booming, nobody is interested in establishing a company." By opting for a career in industry, scientists are choosing the supposed safety of a permanent position. However, if career options diminish in times of crisis, university graduates tend to think more about establishing a company. In the past, the TLB has utilised patents for start-up companies and also supports inventors who are planning to establish their own companies. Such actions are supported by funding policies designed to boost the economy through a larger number of company foundations. In order to finance such start-up companies, we work closely with the High-Tech Gründerfonds and LBBW Venture. However, if we want to increase the number of start-ups, we need to adopt the American way of thinking, where it is believed that the establishment of start-ups is less an emergency solution but rather an attractive way of life and a good solution for career planning. As one of our business partners in California put it: "Be innovative enough to get founded."

 

Further information:
Thomas Schurr
Exploitation in the Life Sciences and Physical Sciences, establishment of a company contact database
Phone: +49 (0)721/79004-39
Mail: tschurr(at)tlb.de
Website address: https://www.gesundheitsindustrie-bw.de/en/article/news/bridges-between-university-inventors-and-companies