Minutes of the May 13, 2009, CoEE Technology Transfer Forum

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Minutes of the May 13, 2009, CoEE Technology Transfer Forum

Agenda Item XIII

South Carolina Centers of Economic Excellence

Minutes of the Technology Transfer Forum

May 13, 2009

Dr. Morrison greeted those present and those attending via teleconference and convened

the South Carolina Centers of Economic Excellence (CoEE) Technology Transfer Forum

meeting at 10:00 a.m. The meeting was held in the CHE Main Conference Room in

Columbia, SC.

Attendants included:

John Raymond, MUSC (via teleconference)

Bart Yancey, MUSC (via teleconference)

Chip Hood, MUSC (via teleconference)

Chris Przirembel, Clemson (via teleconference)

Joe Kolis, Clemson

Lynda Brock, Clemson (via teleconference)

Emily Land, Clemson (via teleconference)

Rose Booze, USC

Chad Hardaway, USC

Dr. Gail Morrison, CHE

Mr. Arik Bjorn, CHE

Dr. Argentini Anderson, CHE

Ms. Laura Belcher, CHE

Mike Randall, Health Sciences SC

Melanie Lux, Lux & Associates

Dr. Morrison asked Mr. Bjorn to present opening remarks. Mr. Bjorn stated that any

discussion related to the formal collection and reporting of CoEE Program metrics should

begin with an understanding of the program’s statutory mandate:

[T]hese endowed professorships should be used to recruit and maintain leading

scientists and engineers at the senior research universities of South Carolina for

the purposes of developing and leveraging the research capabilities of the

universities for the creation of well-paying jobs and enhanced economic

opportunities in knowledge-based industries for all South Carolinians…

[S.C. 2-75-5(B)(2)]

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Agenda Item XIII

Mr. Bjorn continued, “From a statutory perspective, success for the CoEE Program is

measured by the number of new, well-paying jobs which can be attributed to the

program, as well as resultant enhanced economic opportunities. (We understand that

technology transfer data are the means by which most ‘enhanced economic opportunities’

are demonstrated.) The purpose of today’s meeting is twofold: first, to arrive upon a

sound formula and/or method for calculating the number of jobs that have been created as

the result of the program, and second, to revise the institutional annual report template so

that all critical ‘enhanced economic opportunity’ data is reported.”

Mr. Bjorn presented a brief program history of technology transfer data collection and

reporting. For the 2003-2006 CoEE Program Annual Report (the first program annual

report), technology transfer data was not collected from the institutions. For the 2007

CoEE Program Annual Report, technology transfer data was collected, not via the

institutional annual report template, but by telephone conversations and email

communication between CHE staff and the institutional technology transfer offices.

For the 2008 CoEE Program Annual Report, a technology transfer section was formally

introduced into the institutional annual report template. This included a technology

transfer table based partially upon institutional data collected annually by the Association

of University Technology Managers (AUTM). One other new piece of new data

collected in the institutional annual report template was CoEE and CoEE chair extramural

research funding—which were critical pieces of information used by the Washington

Advisory Group (WAG) in its external comprehensive program evaluation (WAG

Report).

Mr. Bjorn recognized that the institutional annual report template remained a work in

progress—especially the technology transfer section. He hoped that the dialogue of the

day’s forum would result in a much-improved institutional annual report template for the

2009 CoEE Program Annual Report.

Agenda Item I: Discussion on CoEE Reporting Boundaries for Technology

Transfer, Extramural Research and Other Programmatic Statistics in Institutional

Annual Reports

Mr. Bjorn asked the participants to turn their attention to the first agenda item:

“Discussion on CoEE Reporting Boundaries for Technology Transfer, Extramural

Research and Other Programmatic Statistics in Institutional Annual Reports.”

Mr. Bjorn explained that currently there was no guideline which limited the number of

faculty members an institution could include in its annual report for a given CoEE. In

2008, the Photonic Materials CoEE (Clemson) reported technology transfer and

extramural research data for a broader “umbrella” center, the Center for Optical Materials

Science and Engineering (COMSET), which has more than a dozen Clemson faculty

associated with it.

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Agenda Item XIII

The original 2008 Photonic Materials CoEE annual report presented a number of metric

incongruities. More than $42 million in extramural research was reported, along with 44

invention disclosures, even though less than $2 million in center expenditures were

reported. Thus, with no CoEE chair yet appointed and no junior faculty members listed

as being hired to work directly for the CoEE, on paper this CoEE appeared to be

superlatively more productive and successful than any other CoEE.

After consulting with all three of the institutional technology transfer directors, plus the

chief economic development officer of Health Sciences South Carolina (HSSC), CHE

staff suggested that statistical information in a CoEE institutional annual report should be

limited to the principal investigator(s), CoEE chair(s), and junior faculty directly hired to

work for a CoEE.

Dr. Przirembel countered that industry standards promoted broad classification and

metrics reporting of academic research centers. Dr. Kolis agreed, “In fact, the National

Science Foundation (NSF) encourages that under the rubric of sustainability. They want

to see those kind of numbers.” Dr. Przirembel suggested that NSF Engineering Research

Center policies be consulted for evidence of this claim, and added that the Office of

Management and Budget, which scrutinized such large programs, does not criticize this

broad method of statistical reporting.

Mr. Bjorn stated he was willing to accept that there was an industry standard for broad

data collecting boundaries for scientific research centers. He suggested there was still a

communication issue with respect to demonstrating the impact of the state award and the

non-state match by including research statistics of junior faculty members who were in

place at an institution well before a CoEE award was granted. He also wondered how the

average legislator would interpret major statistical data for a CoEE which still had not

hired a CoEE chair: “As a member of the General Assembly, the first question I would

ask is, ‘How is that possible?’ Is that a question everyone here is prepared to answer?”

Dr. Przirembel responded that such questions could only be answered by explaining the

intricacies of industry standards in private meetings with legislators and their staff.

MR. BJORN SAID HE UNDERSTOOD THE GROUP POSITION TO BE: ALLOW THE INSTITUTIONS

TO SET THE STATISTICAL BOUNDARIES FOR EACH COEE, AND IF QUESTIONS ARISE, DEAL

WITH THEM ON A CASE-BY-CASE BASIS. THE GROUP CONCURRED.

Dr. Randall suggested that it might be wise to formalize that position in the institutional

annual report template. Mr. Bjorn agreed, “It would be helpful to say we have a

guideline, even if we leave it at institutional discretion. Otherwise, we open ourselves to

accusations of having no standards. An open-ended guideline is still a standard.”

Dr. Przirembel asked whether the day’s forum would result in a formal document with

guidelines to be considered by the institutions and other forum participants. Mr. Bjorn

explained that due to the pending 2009 institutional annual report deadline (July 31), he

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Agenda Item XIII

had instead hoped to send all forum participants a revised version of the institutional

annual report template which included the “consensus action items” of the forum

participants. Due to time constraints, the group could then make additional corrections in

the actual template draft, which, when finished, could immediately be distributed to the

institutions. The group concurred that this was an acceptable way to proceed.

Agenda Item II: Discussion and Review of “Economic Development Outcomes” and

Technology Transfer Table” Components of Institutional Annual Report

Template, as well as Other Economic Output Categories

Mr. Bjorn asked the participants to turn their attention to the second agenda item:

“Discussion and Review of ‘Economic Development Outcomes’ and ‘Technology

Transfer Table’ Components of Institutional Annual Report Template, as well as Other

Economic Output Categories.”

Mr. Bjorn stated it was important to resolve whether technology transfer data should be

collected in a cumulative or annual fashion. While the industry standard is collection of

annual data (primarily for institutional benchmarking), CHE staff has always collected

and reported cumulative data for the sake of demonstrating total program output to

program stakeholders and the General Assembly.

Mr. Bjorn recognized that one of the complications of reporting cumulative technology

transfer data is the shifting nature of the statistics. In cumulative reporting, one might

report one patent application and one approved patent, which really are different stages of

the same document: “An application will be an application one year; once it’s a patent,

it’s no longer an application.” He suggested that while there may be some difficulties

with keeping track of cumulative data, it is one of the best ways to demonstrate overall

program success to legislators and program stakeholders.

Dr. Kolis said that it seemed very important to maintain cumulative center expenditure

data, and thus to report cumulative results of those expenditures. Mr. Hardaway endorsed

collecting cumulative and annual data.

Mr. Bjorn asked whether in cumulative reporting, the shifting nature of a document

should be represented; that is, when an application becomes a patent, should one less

application be represented statistically?

Mr. Hardaway replied, “No, it’s always ‘a mark on the wall.’” He added that invention

disclosures are the leading technology transfer indicators: “It’s like the stock market. If

disclosures are growing, then results follow. Disclosures beget patents, and patents beget

licenses and start-up companies.”

Mr. Hood stated that simply adding and totaling numbers does not take into account the

inner relationships between disclosures and patents. He explained that by AUTM

definitions, a single disclosure (technology) typically results in multiple patent

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Agenda Item XIII

applications. Readers are not likely to realize that multiple applications may be

representative of a single technology: “The same with licenses. There may be five

licenses for one technology, or there may be one license for each technology. So the

cumulative data doesn’t give you a precise depth of understanding.”

Mr. Bjorn replied that reporting job headcounts and licensing revenue was simple

compared to explaining the process of how a disclosure ultimately becomes profitable.

He wondered how the group might do a better job of explaining the intricacies of

disclosures as a leading technology transfer economic indicator. Perhaps there were

industry indexes that indicated “X” number of disclosures typically leads to “X” revenue.

Dr. Kolis cautioned against reporting simple ratios: “I would try to educate our

readership. I would rather fight the good fight and explain, explain, explain. Eventually,

people begin to understand.”

Mr. Hardaway stated that he thought it was critical not to report statistics out of context.

A license or the creation of a start-up company ultimately is the result of hiring a CoEE

chair. That interconnectedness should not be lost in statistical reporting: “Stakeholders

say, ‘We give you money, you give us jobs.’ But there’s a lot of sausage to be made in

between. If I could only make one point to the General Assembly, that would be it.”

Mr. Bjorn was reminded of the Schoolhouse Rock Saturday morning cartoon, “How a

Bill Becomes a Law.” The group needed to communicate simply and successfully the

complex process of how a CoEE chair appointment ultimately results in start-up

companies, license agreements and other enhanced economic opportunities.

Dr. Kolis stated that reporting technology transfer data out of its normal context of

institutional benchmarking was problematic. For instance, if it were not possible to

compare the CoEE Program technology transfer data to the technology transfer data of

other similar challenge grant programs (e.g., Bucks for Brains in Kentucky), there was

little good in simply generating ratio figures: “So we have ‘X’ disclosures per dollars

expended. Is that a good or bad number? There’s no way of knowing. The advantage of

cumulative reporting, however, is at least you can say things are building.”

Mr. Bjorn asked the group to examine the Technology Transfer Table in the current

institutional annual report template. Dr. Morrison stated that the table appeared to

provide a sequence of events from expenditures to disclosures to patent applications and

ultimately to patents, licenses, license income and start-up companies.

Dr. Randall wondered whether some of the categories, such as provisional patents, were

really important to include. Perhaps the current categories should continue to be

collected, but some of them should be combined in reporting. For example, all categories

of patent applications would be combined in reporting, as would all categories of patents

issued.

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Agenda Item XIII

Mr. Hood thought this would simultaneously allow better internal scrutiny and broader

reader comprehension. He added that all the data needed to be reported in a readily

understood general overview, “a nice succinct package.”

MR. BJORN SAID HE UNDERSTOOD THE GROUP POSITION TO BE: COLLECT AS MUCH

TECHNOLOGY TRANSFER INFORMATION AS IS NECESSARY, IN AN ANNUAL AND A

CUMULATIVE FASHION, BUT IN REPORTING THIS INFORMATION, COMBINE CERTAIN

CATEGORIES AND CREATE “EASILY UNDERSTOOD” INFORMATION PACKAGES WHENEVER

POSSIBLE. THE GROUP CONCURRED.

Mr. Hood considered it important for the technology transfer office directors to make

certain they maintained consistent definitions for each data point being collected.

Dr. Przirembel asked how “return on investment” is reported to the State annually; that is,

what is the result of the state’s $180 million investment in the CoEE Program? “The

General Assembly wants a dollar figure. You’re not going to have an half-hour with

Senator Leatherman to explain the intricacies of tracking an intellectual property

disclosure.”

Mr. Bjorn suggested that this would be a good moment for him to bring up the subject of

license income. Thus far, CHE staff had not reported CoEE Program license income in

the program annual report, because the total figure is less than $200,000. Showing a rate

of return of $200,000 for $180 million was not very prudent—even if there was a good

explanation, which is that the CoEE Program is a long-term economic development

investment still in its earliest phases. “That said,” he continued, “at some point we have

to start reporting licensing income.” Dr. Morrison agreed.

Mr. Hardaway suggested “couching” license income in its proper context. Although

overall program licensing revenue is small, USC’s portion represented a substantial

percentage of total USC licensing revenue: “In any given year, that number sounds

terrible if you talk about return on investment. I could argue that you won’t see

significant licensing income until year 15 of the program.”

Mr. Bjorn said that while those present at the forum understood the required timeline of

technology transfer success, license income probably should be reported henceforth. He

further noted that CHE staff has already fielded several legislator inquiries regarding

CoEE Program licensing income.

Dr. Morrison liked the idea of reporting licensing income in context with total

institutional licensing income. Mr. Hood also suggested a benchmark of licensing

income compared to research expenditures. Mr. Bjorn noted that reporting $50,000 in

licensing income for $2 million in expenditures does not perceptibly communicate

success.

Mr. Hardaway suggested implementing an internal benchmarking tool whereby the ratio

of expenditures to licensing revenue at the top 20 national institutions would serve as a

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Agenda Item XIII

baseline for marking CoEE Program expenditures-to-licensing revenue statistics. Dr.

Randall applauded this suggestion, and added that for now licensing revenue should be

reported as a trailing rather than a leading indicator. Mr. Hardaway agreed, citing that

federal research investment is about $50 billion annually, with only about $1.2 billion in

annual license revenue reported, a return on investment ratio of about 50:1.

Dr. Raymond inquired about the reporting of extramural research funding. Mr. Bjorn

answered that extramural research funding was reported for the first time in the 2008

CoEE Program Annual Report and accounted for a little less than half ($122 million) of

the quarter-billion dollar non-state investment figure touted in the WAG Report. He

suggested that perhaps the Extramural Grant Table should precede the Technology

Transfer Table in the 2009 CoEE Program Annual Report.

MR. BJORN SAID HE UNDERSTOOD THE GROUP POSITION TO BE: COLLECT AND REPORT

COEE PROGRAM LICENSE REVENUE, BUT DO NOT REPORT IT AS A LEADING INDICATOR.

INSTEAD, REPORT PROGRAM LICENSE REVENUE IN A CREATIVE QUALIFYING MANNER, SUCH

AS COMPARING IT TO OVERALL INSTITUTIONAL LICENSING REVENUE. THE GROUP

CONCURRED.

Mr. Bjorn asked the forum participants to examine collectively the current definitions of

spin-off company and start-up company in the institutional annual report template:

[A] spin-off company is defined as a new or relatively new enterprise in which an

institution has a revenue-based relationship via the licensure of an invention, the

development of a technology/invention or the provision of service using

institutional-derived expertise. This differs from a start-up company, in that while

the enterprise may have a similar business model or goals to a spin-off company,

the institution does not presently maintain a revenue-based relationship (although

other major relationships are likely to exist, such as space sharing or leasing, the

employment or internship of graduate students, etc.).

Mr. Bjorn explained that he had had a difficult time researching universally-accepted

definitions of either type of entity, but noted that none of the institutions had objected to

the definitions he eventually employed in the template.

Mr. Hardaway stated that a spin-off company develops out of a currently existing

commercial organization. This does not include public research universities, which are

not-for-profit entities. He had never seen the term spinoff company applied to a

university-associated entity. Dr. Kolis agreed with this assessment.

MR. BJORN SAID HE UNDERSTOOD THE GROUP POSITION TO BE: CHANGE THE CATEGORY

“SPIN-OFF COMPANY” IN THE TECHNOLOGY TRANSFER TABLE TO “START-UP COMPANY”

AND REMOVE THE DEFINITIONS OF “START-UP COMPANY” AND “SPIN-OFF COMPANY.” THE

GROUP CONCURRED.

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Agenda Item XIII

Mr. Hood added that for the sake of information reporting, a CoEE start-up company

should be defined as a company created as the result of technology/IP generated from the

program.

Dr. Przirembel suggested that a company such as BMW, which clearly is not a start-up

company, should be included in a separate category called “landing parties”: a company

that started in another state and moved to South Carolina because of the existence of the

CoEE Program. Such a company is attracted to the state because of the existence of a

CoEE. Another “landing party” would be American Titanium Works, which has

committed to move to South Carolina in part because of CU-ICAR.

Mr. Bjorn next led the participants in an analysis of current technology transfer categories

in the institutional annual report template. The group reviewed a list created by Dr.

Randall of additional technology transfer categories that could be added to the

institutional annual report template [see Agenda Item 2b]; among these categories was

the category “landing parties,” which Dr. Przirembel had already mentioned.

Mr. Bjorn suggested two categories for reporting corporate or commercial presence in

South Carolina that is attributable to the CoEE Program: “direct landings” and “indirect

landings.”

Dr. Booze inquired what was meant by “CoEE infrastructure organization” on Agenda

Item 2b. Dr. Randall replied that an “infrastructure organization” is an entity that exists

as the direct result of a CoEE’s research, which will have a positive, direct impact on the

state economy in a way that does not include measurable license income and IP

generation. He cited as an example a statewide clinical trial project which is in initial

stages at the Health Care Quality CoEE. He also cited the SC LightRail. He added,

“There are things that happen that are critical for formation of economic clusters and

economic development in the state that go beyond technology transfer.”

Mr. Hardaway stated that he liked this category. It is necessary “to cast a wide net” to

capture all organizations and entities which are positively impacting the state economy as

the result of the CoEE Program.

Dr. Przirembel cautioned against listing organizations and providing specific information

on “cost reduction” impact to the state economy. He explained that he had participated

with the National Institute of Standards and Technology Manufacturing Extension

Partnership for nearly a decade. They have created a very complex reporting system,

which on the finished end becomes problematic in terms of audit verification of metrics

which are difficult to prove, such as cost savings. He instead suggested simplicity with

respect to metric reporting. Dr. Booze concurred.

Mr. Bjorn returned to his suggestion of the two categories, “direct and indirect landings,”

plus perhaps a third category, “other infrastructure organizations,” with the option for the

institution to report metrics for this final category in an at-will manner. Dr. Przirembel

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Agenda Item XIII

suggested that reporting for a category such as “other infrastructure organization” be

done only in a narrative manner. Mr. Bjorn suggested that the category be widened to

include industry conferences; Dr. Morrison agreed. Dr. Randall was content with a

narrative means of reporting for infrastructure organizations “so long as those stories

convince stakeholders and legislators they are getting a good return on their investment.”

MR. BJORN SAID HE UNDERSTOOD THE GROUP POSITION TO BE: INCLUDE TWO TYPES OF

“LANDINGS” CATEGORIES FOR REPORTING COMMERCIAL ENTERPRISE DATA: DIRECT

LANDINGS AND INDIRECT LANDINGS. ALSO, REVISE THE “OTHER” SECTION OF THE

INSTITUTIONAL ANNUAL REPORT TEMPLATE TO INCLUDE ANECDOTAL AND STATISTICAL

DATA IN A NARRATIVE FRAMEWORK FOR NON-TRADITIONAL ENTERPRISES WHICH HAVE

DIRECT IMPACT ON THE STATE ECONOMY. THE GROUP CONCURRED.

Agenda Item III: Discussion of Data Collection and Accepted Formulae Regarding

CoEE Program Job Creation

Mr. Hardaway led the participants in a discussion of the third agenda item: “Data

Collection and Accepted Formulae Regarding CoEE Program Job Creation.”

He explained that WAG had used a jobs creation formula of 36 jobs per $1 million of

research and development (R&D) expenditures: “However, the problem with the

formula, as Mr. Bjorn has pointed out, is that it does not derive from a primary source.” 1

Mr. Hardaway also presented the issue of determining whether a job is “directly” or

“indirectly” attributable to the CoEE Program. Are all of the CU-ICAR jobs direct CoEE

jobs? Did they all directly result from the state’s CoEE investment?

Dr. Przirembel stated that in his opinion all of the CU-ICAR corporate jobs are directly

attributable to the CoEE Program: “There is a direct correlation.”

Mr. Hardaway suggested that CU-ICAR jobs were, however, distinct from jobs which are

directly funded from the CoEE state award and the non-state match: positions like the

CoEE chairs themselves, technicians and junior faculty whose salaries can be

demonstrably tied to the CoEE state award and the non-state match.

Mr. Hardaway continued, “When you’re counting jobs above and beyond that, what are

the guidelines for how we count those jobs? We don’t want to shortchange ourselves, but

we don’t want to be disingenuous, either.”

1 The WAG formula derives from a October 2008 American Association of State Colleges and

Universities “Higher Education Policy Brief” (written by Daniel Hurley) which states, “According to

methodologies developed by Bureau of Economic Analysis of the U.S. Department of Commerce and

reported by the Wisconsin Technology Council, every $1 million in R&D spending generates 36 jobs.”

However, WAG did not provide veracity of this formula, nor did it identify the primary source. CHE staff

has been unable to identify the primary source.

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Agenda Item XIII

Dr. Przirembel posed a question to the group, “Let me raise a question we at Clemson

have struggled with: What number do we use?” He explained that the S.C. Department

of Commerce uses a term called “announced jobs”—that is, a fixed number that a

company uses in a press release to communicate the number of new jobs it anticipates

will result from a relocation. The announced jobs number never fluctuates, even if that

number eventually ends up being lower. He suggested that the institutions report

“announced jobs” for corporate relocations, and perform an actual headcount of jobs for

start-up companies and within institutions.

Dr. Kolis wondered whether it would still be necessary to run a jobs formula from

research expenditure data. Dr. Przirembel said the group should search for an industryaccepted

formula. He suggested that the group contact the American Association for the

Advancement of Science and NSF. Dr. Morrison and Dr. Randall volunteered to do so.

Dr. Kolis stated that, in his opinion, a formula for jobs per million-dollar-of-R&Dspending

was somewhat meaningless. Then again, he understood the political

importance of reporting the total number of jobs; he said a formula is at least a

legitimately accepted means of computing jobs.

Mr. Hood doubted whether anyone in the room had the qualifications to conduct an

annual total economic impact analysis for the program. No one disagreed. Mr.

Hardaway thought it might be worthwhile to hire an economist every three years to five

years to conduct a comprehensive economic impact analysis.

Mr. Bjorn said that beyond an external analysis, the only thing which can be done is to

count heads (of direct and indirect jobs), run a new jobs formula based on research

expenditures, and account for duplication between the two methods. He continued, “The

problem with hiring an economist is that this person is going to ask the institutions for

more information that you could ever imagine. You’ll be significantly burdened. But if

everyone agrees that future funding may hinge on the job numbers we report, it might be

worthwhile.”

Mr. Bjorn asked the group whether it preferred a direct head count or a formula-based

approach. Dr. Kolis stated he did not like a formula-based approach. Dr. Przirembel said

that a formula-based approach would be profitable “if we can find one at a respected

organization like AAAS that has identified a formula via a formal study.”

Mr. Bjorn said that a strict formula-based approach would mean no longer counting the

CU-ICAR jobs or jobs at other institutional research parks, such as Innovista; these jobs

accounted for more than half of the 2,040 CoEE jobs in the WAG Report. Dr. Przirembel

conceded the point, noting that the S.C. House Way and Means Committee and even the

governor are in agreement that the CU-ICAR job numbers as reported by Clemson are

directly attributable to the CoEE Program. Thus, he thought it might be possible to

continue using both a direct head count and a formula-based approach.

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Agenda Item XIII

Mr. Bjorn noted that the institutional annual report template does not currently provide

the means for reporting a headcount of jobs; this would have to be added. Mr. Hardaway

stated that the method needed to be defensible for future audits and legislative inquiries.

Dr. Przirembel again suggested using “announced jobs” for corporate relocations (a

method accepted at the S.C. Department of Commerce), and a method for counting actual

jobs at start-up companies and the institutions (headcount, not FTEs).

Mr. Bjorn suggested splitting the “announced jobs” category into corporate relocations

which are directly and indirectly linked to the CoEE Program. Mr. Bjorn added that it

would be at the discretion of the institution to list whether the association was direct or

indirect; the institution ultimately would have to answer inquiries and provide

justification of reported data.

Dr. Przirembel posed a question regarding the relocation of American Titanium Works:

“Do we count 40 jobs or 380 jobs? There are 40 jobs specifically in their R&D center at

CU-ICAR. There are an additional 340 jobs at the manufacturing plant in Laurens

County. But the company says that when it sought a location, it wished to couple its

R&D center with its manufacturing plant.” Mr. Bjorn’s initial thought was to list 40 jobs

in the direct landing category and 340 jobs in the indirect landing category, but that

ultimately the figure would be reported at the institution’s discretion.

Dr. Morrison and Mr. Bjorn expressed concern that calculating jobs using a headcount

method and a expenditure-based formula would result in a certain amount of duplication.

They wondered how the combined methods could account for duplication. Mr.

Hardaway suggested that the headcount method require the listing of actual names so that

any overlapping of positions between and among CoEEs would be reduced; Dr. Booze

concurred with this method.

Drs. Przirembel and Booze said the only way to eliminate duplication completely was to

use only one method. Dr. Przirembel additionally suggested implementing an economic

impact model, which would calculate direct hires plus “ripple effects.” Dr. Morrison said

that running an economic impact model annually would require hiring an external source,

which would create extra data reporting by each institution.

Mr. Hardaway asserted he still thought one could successfully use both methods as

described by Mr. Bjorn.

MR. BJORN SAID HE UNDERSTOOD THE GROUP POSITION TO BE: REPORT TOTAL NEW JOBS

ATTRIBUTABLE TO THE COEE PROGRAM USING A DUAL APPROACH OF DIRECT HEADCOUNT

AND A RESEARCH EXPENDITURE-BASED FORMULA. THE FORMULA, HOWEVER, MUST

DERIVE FROM A NATIONALLY RECOGNIZED R&D LEADER. THE GROUP CONCURRED.

Mr. Bjorn noted that finding a formula could proceed the formal submission of the

revised institutional annual report templates to the institutions. There was some leeway

between now and when work had to begin on the 2009 CoEE Program Annual Report.

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Agenda Item XIII

Agenda Item IV: Discussion of How to Communicate Economic and Innovation

Successes to General Assembly and Other Demographics

Dr. Randall led the participants in a discussion of the fourth agenda item: “How to

Communicate Economic and Innovation Successes to General Assembly and Other

Demographics.”

Dr. Randall stated that while reviewing the 2008 institutional annual reports, he noticed

very few CoEEs had reported data in the final section of the institutional annual report

template, “Summary of Other Outcomes.” To his mind, he thought this section could be

broadened and revised to include key anecdotal information and testimonial vignettes of

individual CoEE success stories, “information we would actually use to communicate

narrative success to the General Assembly and the general populace.”

He reviewed Agenda Item 4 with the group, which included a synopsis handout on the

ongoing projects of the Clinical Effectiveness and Patient Safety CoEE produced by the

Lux and Associates marketing firm: “We use this as an input for basically whoever

wants to do a press release about this center.”

Mr. Bjorn said that he was disappointed that seven years into the program he was not

aware of a single individual success story connected with the CoEE Program, “South

Carolina Resident X who says, ‘I was impacted by this program.’ It’s not information

staff can collect independently. It has to be reported by the institutions.”

Ms. Lux stated that she knew of a number of patient success stories as the result of the

REACH program at the Stroke CoEE. Dr. Randall said, “I think Mr. Bjorn’s point is that

those types of testimonials should be captured in this section. We need to make certain

that CoEEs report the data, and we can do that by updating this ‘other’ section

accordingly.” Dr. Randall added that it might be a good idea to collect anecdotal

information on more than a once-per-year basis.

Dr. Przirembel wondered why such “human interest” success stories aren’t being

collected in press releases throughout the year by the Clare Morris Agency (CMA). Mr.

Bjorn stated that CMA is under contract to do a limited amount of press releases per year,

but that CHE staff has recently requested CMA concentrate more on human interest

stories in the coming year.

Dr. Przirembel was positive a number of human interest success stories could be told

about graduate students at CU-ICAR: “There are several people currently in the graduate

program at CU-ICAR who literally left full-time jobs and moved their families to South

Carolina.”

Dr. Kolis mentioned the NSF Nuggets Program, by which every few months grant project

directors are required to report an interesting anecdote from their research efforts: “NSF

asks for an interesting story, then sifts through them and presents some to Congress.”

S.C. Centers of Economic Excellence Technology Transfer Forum, May 13, 2009

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Agenda Item XIII

Mr. Bjorn suggested calling the “other” section “CoEE Nuggets,” as it is a familiar term

to many researchers.

MR. BJORN SAID HE UNDERSTOOD THE GROUP POSITION TO BE: REVISE THE INSTITUTIONAL

ANNUAL REPORT TEMPLATE SECTION, “SUMMARY OF OTHER OUTCOMES,” BASED ON THE

NSF NUGGETS PROGRAM FOR THE REPORTING OF ANECDOTAL HUMAN INTEREST SUCCESS

STORIES: “INFORMATION THAT COULD BE USED TO COMMUNICATE THE SUCCESS OF THE

COEE PROGRAM TO THE GENERAL ASSEMBLY AND THE GENERAL POPULACE.” THE GROUP

CONCURRED.

Agenda Item V: Discussion of Technology Transfer Recommendations in the

Higher Education Study Commission (HESC) Action Plan Implementation

Dr. Morrison led the participants in a discussion of the fifth agenda item: “Technology

Transfer Recommendations in the HESC Action Plan Implementation.”

Dr. Morrison reviewed highlighted sections related to institutional technology transfer in

“Goal 2: Increasing Research and Innovation in South Carolina” from the HESC Action

Plan Implementation (Agenda Item 5). She noted that Dr. Booze had served as the Goal

2 Committee chair.

Dr. Booze stated that many of the committee members and guests who represented

industry had expressed concerns that the institutional technology transfer offices were not

accommodating and efficient: “They were very concerned with barriers.”

Dr. Morrison explained, “The challenge we have is that CHE is now tasked with an

accountability mechanism. We have to demonstrate progress with respect to the

recommendations in the HESC Action Plan Implementation.”

Mr. Hardaway commented on the third bullet of Recommendation 2.2 (Enact appropriate

regulatory relief to enhance innovation and promote research):

Minimize/eliminate legal barriers to technology transfer.

He stated, “The biggest constraint that we have in technology transfer is staying within

the bounds of the Bayh-Dole Act and the bounds of federal agencies. The USC

technology transfer office is no more strict than those limitations, which are federal and

cannot be overcome at the state level.”

Mr. Hardaway also commented on the fourth bullet of Recommendation of 2.2:

Provide regulatory relief for intellectual property issues; review and revise

intellectual property policies so they do not unnecessarily constrain or restrict

technology transfer.

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Agenda Item XIII

He said, “I’m not sure what that means because none of the institutional technology

transfer directors have any interest in unduly restricting the flow of our technology into

the marketplace. Typically corporations want to take institutional IP for nothing in

return, and when institutions seek value, corporations cry foul, ‘We pay your taxes, and

you’re not going to get anywhere without us.’ I will say that there is an opportunity for

the universities to streamline and improve the interaction process, but it’s a function of

our lack of resources. Right now, I execute industry contracts, but I used to have staff to

do industry contacts. That’s directly related to a lack of resources.”

Mr. Hardaway also commented on the fifth bullet of Recommendation of 2.2:

Provide a clear mechanism for addressing and managing conflict of interest issues

relative to the use of university space to nurture technology transfer.

He continued, “We provide that at all three research institutions. I’m not very aware of

university space problems being a huge issue. I don’t have people saying, ‘You’re killing

me because I don’t have any space.’ We have an incubator in town that we’re sending

people to all the time. We do not have the wet lab incubator, but that’s a resource issue.

I think MUSC and Clemson are doing the same things to address that.

“I came out of industry originally. The problem I have with the corporate side, they

always come to the table with the same arguments. But a lot of institutional constraints

are imposed by the federal agencies that fund our research.”

Dr. Kolis asked whether CHE was tasked with accounting for all of the bullets connected

to each recommendation. He wondered what funding was being set aside for

accomplishing all of the Action Plan Implementation mandates. He inquired why

institutional technology transfer officers had not been formally invited to be members of

the Goal 2 Committee.

Mr. Bjorn posed a question to the technology transfer officers, “If industry tends to be

very protective and hesitant to work with academic institutions, how do any large

licensing deals ever get brokered?”

Mr. Hardaway answered Mr. Bjorn, citing Recommendation 2.7 as context:

Create a state model for formal agreements between institutions of higher

education and the state’s business and industry to facilitate shared research and

reduce barriers to the commercialization of resulting discoveries and inventions.

He stated, “Let me talk about BASF in relationship to Recommendation 2.7. USC has

agreements in the forms of Sponsored Research Agreements, CEAs, MTAs and licenses.

BASF had dealt previously with CoEE Chair Dr. Benicewicz at Rensselaer. They knew

how to deal with him in a university framework. The agreement they pushed across the

table to USC was perfect. It said, ‘We’re going to do research. We’re going to give you

S.C. Centers of Economic Excellence Technology Transfer Forum, May 13, 2009

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Agenda Item XIII

money. If IP is developed, this is how we want it handled.’ Typically industry comes in

and offers to pay for the research and then wants all the IP generated out of it. My

argument back is, ‘When you pay for the research, that’s what you’re paying for, the

research. You’re not paying for the IP. If you want to pay for IP, I’m putting a separate

line item in for that.’ But BASF knew how to deal with us. It was a great agreement for

both sides.

“I have other companies that come to USC and say, ‘We must own everything. And, by

the way, we also want non-exclusive rights to all the IP that you have that’s related, as

well, even if it’s stuff you haven’t formally shown us yet.’ The difference, in my

opinion, is the individual company.”

Mr. Bjorn noted that it seemed success in brokering technology transfer agreements was

partially based on the relationship which a corporation develops or cultivates with a

faculty member. In Mr. Hardaway’s example, BASF wanted to work with Dr.

Benicewicz. However, a company that doesn’t have such a relationship with a faculty

member “comes in loaded for bear.”

Dr. Kolis replied, “Almost exclusively, corporations come to the table when they’re

interested in a faculty member. They’re not coming to Clemson or to an institution per

se. They’re coming to a particular faculty member.” Mr. Hood added, “Or a core of

strength, a research center, or several faculty members.”

In response to Recommendation 2.7, Dr. Kolis stated, “First ask the businesses in the

state to form a standard license between themselves and then bring the universities in at

the end. They’ll say it’s impossible. And we’ll say, it’s equally impossible.”

Mr. Hood countered, “We can streamline some things and we can always improve. But

ultimately it’s about resources. Can we respond faster to requests to negotiate licenses?

Sure, we can have more people and more funding, but this is not the time to expand our

office by five people when our universities are having to cut folks.” He noted that he also

began in industry: “I used to represent industry. It’s the same story across the country.

There’s only so much you can do to accommodate industry when they really want simple

agreements where they don’t have to pay much and don’t have to pay anything until the

university sells the product and gives them all the rights.”

Mr. Bjorn suggested, “Unless the faculty member is such that he or she leverages

negotiations to the university’s advantage. In other words, industry is so interested in

working with a faculty member that it’s willing to give.”

Dr. Kolis again wondered why the technology transfer officers were not involved in the

creation of the Goal 2 recommendations. Mr. Hood agreed, “Business was at the table,

and we weren’t. Clearly, we all agree that we can improve, but there is not a magic bullet

to any of this.”

S.C. Centers of Economic Excellence Technology Transfer Forum, May 13, 2009

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Agenda Item XIII

Mr. Hardaway noted that as the institutions appoint the CoEE chairs with renown

expertise in applied research, he surmised that industry would gradually change some of

its negotiating patterns. He again cited the partnership between Dr. Benicewicz and

BASF.

Dr. Morrison asked for an institutional response to Recommendation 2.7.

Dr. Przirembel suggested contacting Mr. Anthony Boccanfuso (formerly at USC), who

now leads a national organization out of the National Academies called the Government-

University-Industry Research Roundtable. 2 The goal of this organization is a national

focus on issues of technology transfer. He suggested Mr. Boccanfuso might be able to

furnish CHE staff with some national licensing templates.

He added that Clemson has had considerable experience dealing with small, medium and

large companies, and along the way has developed umbrella agreements for each type of

company. He also explained the ardor of the original negotiation with BMW; it took

nearly two and a half years to negotiate the CU-ICAR agreement, which is now highly

profitable for both sides. He concluded, “That said, to say there is one template and one

boilerplate, that’s just unrealistic.”

Dr. Morrison asked for the group to consider Recommendation 2.8:

Review and/or revise Intellectual Property (IP) policies based upon successful

models at other research institutions (e.g., Georgia Tech, North Carolina State

University, and the University of Kentucky).

Mr. Hardaway commented, “I’m not aware of any other processes or agreements that I

could implement to make our technology transfer ‘model’ work better.” He added that he

doubted that the policies of the three institutions cited in the recommendation were really

different than South Carolina research institution policies: “At the heart of most

technology transfer policies are federal requirements which emanate from the Bayh-Dole

Act.”

Dr. Kolis asked for specific information about what was better about the policies at the

three institutions listed in the recommendation. Dr. Morrison said that the Committee

members and guests had not elaborated.

Mr. Hood asked whether the technology transfer directors were being asked for

commentary in order to revise the recommendations or to implement them. Dr. Morrison

replied that the HESC Action Plan was a formal finished document: “We need to

respond with some sort of action.”

Mr. Hood repeated the earlier statement by Dr. Kolis that it was unfortunate the

institutional technology transfer officers had not been invited to participate in the process.

2 See http://www7.nationalacademies.org/guirr/index.html .

S.C. Centers of Economic Excellence Technology Transfer Forum, May 13, 2009

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Agenda Item XIII

As to Recommendation 2.8, he stated that the recommendation had major textual issues:

“IP policy is an employment agreement between the university and faculty.” Dr. Kolis

agreed that creation and administration of IP policy had nothing to do with the

technology transfer offices.

Mr. Hood added a comment about the bullet point for Recommendation 2.8:

Establish a network of programs to encourage statewide technology transfer of

South Carolina-derived technologies/patents (e.g., Maryland technology transfer

consortium).

He noted that the bullet had no relation whatsoever to IP policy, which, again, is an

institution-faculty agreement and has nothing to do with industry. Mr. Hardaway thought

that this bullet point more properly belonged in Recommendation 2.9: 3

Broaden the scope of the South Carolina Research Authority (SCRA) and SC

Launch! to encourage and support research and technology transfer across all

South Carolina institutions.

All three technology transfer directors thought that there was a legitimate role for SCRA

and SCLaunch! in terms of marketing or perhaps providing advisory services to small or

midsize businesses; e.g., assisting businesses with applying for Small Business

Innovation Research (SBIR) and Small Business Technology Transfer Program (STTR)

grants. Dr. Kolis cited the success of the North Carolina Small Business and Technology

Development Center operated by North Carolina State University on behalf of mid-sized

businesses, emerging entrepreneurs and local leaders in North Carolina.

However, the three technology transfer directors were adamant that they thought it would

be harmful for SCRA or another outside entity to participate actively in the industry

negotiation process, the patent application process and IP development process.

At this point, Dr. Raymond announced he need to leave the meeting for an NIH

conference call.

Dr. Booze commented, “The Goal 2 Committee was not just represented by the research

universities. It included representatives from the technical colleges and the

3 Staff separately notes that the bullet point for Recommendation 2.7 and the fifth bullet point of

Recommendation 2.9 are very similar, and that the footnotes connected to each bullet point are virtually

identical. Thus, the Recommendation 2.7 bullet point may in fact have been a scrivener’s error:

Recommendation 2.7 Bullet Point: Establish a network of programs to encourage statewide

technology transfer of South Carolina-derived technologies/patents (e.g., Maryland technology

transfer consortium22).

Recommendation 2.9 Fifth Bullet Point: Encourage the development of formalized consortia,

advisory networks, or councils that will optimize the process of technology transfer and

connections with industry at the institutional level (e.g., Maryland technology transfer

consortium).

S.C. Centers of Economic Excellence Technology Transfer Forum, May 13, 2009

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Agenda Item XIII

comprehensive universities. There was a strong feeling among that sector that certainly

the enterprise campuses had a lot to offer.”

Mr. Hood stated that the research institutions are positioned to help other South Carolina

public institutions of higher education with technology transfer. However, the IP that

typically emerges from these institutions is along the lines ofthe sole inventor” variety.

Mr. Hardaway offered commentary on the sixth bullet of Recommendation 2.11

(Encourage increased communication, shared programs, and formal partnerships among

institutions of higher education):

Sponsor an annual technology transfer conference for all universities to attend in

order to foster further communication between and among institutions; to identify

new technologies statewide; and to attract the attention of business, industry and

venture capital entities.

He continued, “I would love to see such a conference. We informally do that every year

at Innoventure and other events such as CoEE chair Dr. Richard Swaja’s Biotechnology

Symposium.”

Mr. Bjorn asked for suggestions about forums for such a conference, “Would it be helpful

to have a panel discussion with big business and the institutions together talking?”

Dr. Kolis responded, “Each company is different. A big pharmaceutical company versus

a small materials company versus an IT company. Their needs are different.” Mr. Hood

mentioned the annual Florida Innovation Showcase 4 as an example of a successful

technology transfer conference: “Remember, Florida has a critical mass to attract

participants. We’ve had more success going to national conferences which showcase

technology transfer, such as the Licensing Executive Society, rather than convincing

people to travel here. A conference meeting would be a good idea where we invite state

industry to sit down with the technology transfer officers for half a day to discuss ways

we can work together and collaborate and help educate them about university policy.”

Other Business

Mr. Bjorn thanked all the participants for their contributions to what had been a very

successful meeting, in his opinion. He asked for closing remarks from any participants.

Mr. Yancey voiced MUSC’s support for an annual external economic impact assessment:

“We struggle with having 20 CoEEs and trying to manage all the nuances of gathering

information and collecting the bits and pieces from the PIs. Anything that would help us

facilitate that would be helpful.”

4 See www.floridaresearch.org/index.php?src=gendocs&ref=fl_innov_08_FRClink&category=TT2 .

S.C. Centers of Economic Excellence Technology Transfer Forum, May 13, 2009

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Agenda Item XIII

Mr. Bjorn pointed out that this is not something CHE staff could conduct on its own. An

external team would have to be contracted, and such a team would gather even more

information from all of the institutions. Dr. Morrison added that the extra administrative

burden would not just fall on the institutions, but would require extra work for CHE staff

as well.

Mr. Hardaway posited the idea of an external consultant, “someone who could be a

thought leader, someone who could go to the legislature and say, ‘I’m an expert in this

field, and it is okay to count jobs in these sectors in this manner.’ Someone who shapes

the way we present information and metrics.”

Mr. Bjorn wondered whether a third party expert in these matters would offer more

credibility, and even a sense of protection, with respect to data justification. The

technology transfer officers concurred it would. Mr. Hood added that the USC and

Clemson business schools should be sought for the recommendation of such an external

source. Dr. Morrison stated CHE staff would make those contacts.

Mr. Bjorn again thanked all the participants for their contributions and time.

The meeting concluded at 12:51 p.m.

S.C. Centers of Economic Excellence Technology Transfer Forum, May 13, 2009

19

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