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FORGING SUCCESSFULUNIVERSITY–INDUSTRY COLLABORATIONS
Replacing adversarial dialogue with engagement can bridgethe cultural divide in negotiating research agreements.
Beth Burnside and Lou Witkin
OVERVIEW: In an increasingly global, networkedmarket for R&D it is more important than ever to col-laborate. In the past, intellectual property negotiationshave been formidable barriers to forming effective col-laborative university–industry arrangements. Experi-ence has shown that it is possible to reduce negotiationfrom 20–26 to 1–2 months by using a model to build ateam, agreeing on a pre-determined process, and beingcommitted to finding creative ways to reach agreement.Hewlett-Packard’s experience in using such a modelwith the University of California at Berkeley and the(California) Bay Area Science and Innovation Consor-tium has shown how creativity and insight are essential
to achieving convergence and also helps explain whystandard agreements cannot effectively address the situ-ational challenges.
KEY CONCEPTS: technology transfer, university-industry collaborations, intellectual property, negotia-tion.
In an increasingly competitive global market for researchand development, the United States is falling behind insignificant ways. It lags behind Asia and Europe in pro-duction of technical degrees, scientific papers and high-tech exports:
• Latest figures for science and engineering degrees as apercentage of total new degrees show that in 2004 theU.S. had 14 percent, behind 28 other countries includingChina at 39 percent, Japan at 25 percent, and Ireland at23 percent (1).
• In 2005, the U.S. had fallen to seventh in total R&Dexpenditures as a percentage of GDP, following behindSweden, Japan and Korea. From 1995 to 2005, theU.S. fell to 25th in average annual growth rate ofR&D expenditures as a percentage of GDP, with theU.S. at 3 percent, behind China at 18 percent, Ireland at8 percent, Russia at 6 percent, and the EU at 3.5 percent(1).
• The U.S. share of worldwide high-tech exports hasbeen in a 20-year decline. Since 2001, the trade balancefor high-tech products has fallen into deficit.
In this environment, U.S. industry is beginning to movesponsored research overseas in search of growthpotential, abundant R&D personnel, and more favorableintellectual property (IP) terms from foreign universities.Thus, at a time when the emergence of technological andeconomic competitors requires increased university–industry (U/I) collaboration in the U.S., many informa-tion technology industry and university researchinstitutions agree that the difficulties of negotiating U/Icollaborative research agreements are a barrier toAmerican competitiveness.
Beth Burnside is vice chancellor for research and chan-cellor’s professor of cell and developmental biology atUniversity of California, Berkeley. She is responsible foruniversity/industry relations, research compliance,research communications and research support for theBerkeley campus. Her administrative portfolio includesmanagement of 40 campus research units, 12 researchmuseums and remote field stations, and the offices ofsponsored projects, technology licensing and lab animalcare. She has recently established two new offices tofacilitate and expand the impact of Berkeley research,including the office of university/industry liaison. Shereceived her B.A., M.A. and Ph.D. in biology at the Uni-versity of Texas, Austin. [email protected].
Lou Witkin is a program manager with 35 years experi-ence with Hewlett-Packard. During the past 10 years hehas worked in HP’s university relations group develop-ing several programs that have resulted in successfullong-term collaborations between HP’s businesses anduniversities worldwide, as well as encouraging curricu-lum advances in engineering disciplines. He is alsoexploring factors that contribute to building long-termstrategic partnerships with universities. He received aB.S. and M.S. in electrical engineering from the Univer-sity of Denver. [email protected].
Research � Technology Management260895-6308/08/$5.00 © 2008 Industrial Research Institute, Inc.
The Collaboration Imperative
The “go-it-alone” approach to innovation and develop-ment is no longer viable. Today the complexity ofproblems and the need for multidisciplinary approachesrequires interaction, the flow of ideas and knowledgeexchange. Collaborating and partnering enables innova-tion ecosystem development and new industry creation(2,3).
The U.S. innovation ecosystem has thrived on U/Iresearch collaborations, yet their potential is being com-promised by conflicts over IP issues. Technologytransfer (IP licensing) is not necessarily the mostimportant form of U/I interaction. It is serial, occurs at alate stage in the process, takes a long time (often 20–26months), and may not maximize the flow of ideas. It con-tributes less than research collaborations to the prepara-tion of students for joining the professional workforce.
Collaborate or die is the modern imperative. Giving upon industry-sponsored research at U.S. universitieswould be costly for both sides, depriving industry of thecreativity of outstanding university faculty and deprivinguniversities of industry partnerships critical both toresearch and to education of the future industryworkforce. For universities and industry to go theirseparate ways would put U.S. competitiveness at risk.
Challenges and Differences
Although the cultural divide between universities andindustry in negotiating research agreements is real andconsiderable, there are ways to bridge the gap. Universi-ties function in an intricate IP environment due tocomplex third-party IP obligations to federal and stategovernments as well as to academic researchers. Univer-sity negotiators have much less flexibility over IP thantheir private sector counterparts. This situation,combined with the fact that university and industry nego-tiators are sometimes unfamiliar with each other’s per-spectives, leads to what we term a “silent breaking”scenario:
Two researchers wish to work together on a research topic (acrossU/I boundaries). They meet and define an area of mutual interest.Their organizations begin the process of negotiating an agreementframework. The researchers wait for the agreement details to behammered out before commencing the research. Time passes(sometimes 2+ years).
The negotiation parties become increasingly frustrated thatagreement is elusive. The deadline for the grant/funding opportunitypasses. The researchers give up; the ideas become valueless and therelevance of the work expires. The negotiators give up, each blamingthe practices, values or positions of the other as being irresolvableand unreasonable. Both sides conclude that they will not engage eachother in the future. Both sides incur huge legal expenses, more thanwould ever be recovered in licensing fees (this is usually an underap-preciated hidden sunk cost.)
Industry shifts research funding to offshore alternatives (India,China, etc.). Universities focus more on government funding and turn
away from industry collaboration. Executives don’t even want toraise the topic, let alone address the problem or hope for a solution.“Walking away” becomes the de facto accepted practice. The “silentbreaking” continues.
New Models
UC Berkeley’s New Industry Relations Paradigm
In late 2003, IP management at UC Berkeley was restruc-tured to support Berkeley’s reputation as a cutting-edgeresearch institution. The new Intellectual Property andIndustry Research Alliances office (IPIRA) was estab-lished to streamline industry relations by creating a “one-stop shop” for U/I partnerships (see illustration, nextpage), thereby addressing the need for:
• faster, more sophisticated contract negotiation withindustry for “incoming” requests in an era of increasingvolume;
• better service to faculty to support research; and
• elimination of independent (and sometimescompeting!) silos of activity.
IPIRA consists of two peer divisions under commonmanagement: the Office of Industry Alliances and theOffice of Technology Licensing. Its mission is:
• to recognize, establish, nurture, and maintain multifac-eted relationships with both public and privatecompanies;
• to enhance the Berkeley campus research enterprise byfacilitating relationships with companies through cen-tralized management of intellectual property andindustry research alliances;
• to attract and facilitate research support from theprivate sector;
• to develop and strengthen new and more flexible typesof agreements to reflect changing relationships withindustry;
• to support economic development through technologyand knowledge transfer (including entrepreneurship);
• to accomplish the above while upholding the missionand values of a public university.
IPIRA acknowledges the importance of U/I collabora-tion as an innovation accelerator that fosters translationalresearch and fuels economic development. In IPIRA,technology transfer consists of both “incoming” and“outgoing” arrangements. Corporate support forresearch and industry collaboration are valued as highlyas traditional metrics, such as licensing revenue, formeasuring “technology transfer” success.
Success in IPIRA means success in all aspects ofindustry–university partnerships. Thus, in the newmodel, new metrics may be applied for measuring
March—April 2008 27
success. A given outcome, (for example, the grant of aroyalty-free license to IP) no longer detracts from thebottom line of the technology licensing office if itprovides value of another sort to the campus as a whole—such as attracting research funding or corporate collabo-rations.
IPIRA’s realigned metrics and motivations enabled, forthe first time, the employment of a full spectrum of IPmanagement strategies to achieve the goal of maximiz-ing Berkeley’s impact on society. In the first year afterIPIRA’s establishment, corporate-sponsored research atBerkeley nearly tripled, negotiation times for researchand material transfer agreement contracts were dramati-cally reduced, and new contract templates weredeveloped.
BASIC’s University-Industry IP Project
During the time when UC Berkeley was creating IPIRA,a parallel effort was initiated by BASIC, the Bay AreaScience and Innovation Consortium, to improve theuniversity/industry IP relationship. BASIC is an action-oriented collaboration of the region’s major research uni-
versities, national laboratories, independent researchinstitutions, and R&D-driven businesses and organiza-tions. It is dedicated to:
• Developing innovative collaborative programs thattake advantage of the unique capabilities at Bay AreaR&D institutions to provide solutions for criticalnational and regional challenges.
• Demonstrating the critical linkage between the BayArea’s infrastructure and its economic vitality.
For more than three years, Wayne Johnson, HP’s vicepresident of university relations worldwide, led aregional effort sponsored by BASIC to address IP issueswhich were becoming more contentious and complexand interfering with the research collaborations essentialto competitiveness. The BASIC IP team quickly identi-fied improving collaboration as its goal, and focused spe-cifically on IP negotiation problems in the IT industry.
Its mission was to achieve a shared understanding ofgeneral principles, practices and frameworks that wouldmore effectively advance the IP interests of public andprivate research institutions and to enable a more
UC Berkeley established its new Intellectual Property and Industry Research Alliances office (IPIRA) to streamlineindustry relations by creating a “one-stop shop” for university–industry partnerships.
Research � Technology Management28
effective alignment with existing activities at the stateand national level. At the outset, project members agreedthat U/I negotiations frequently fall into a vicious cyclewhich is IP-centric, lacks trust and good will, is destruc-tive of long-term relationships, and takes too much time,effort and money to arrive at convergence.
The BASIC IP team envisioned a U/I negotiating processin which shared principles and constructive procedureswould produce collaborative rather than conflictivepartnerships—a process by which industry and universi-ties could reasonably and easily reach agreement:
• Identify and configure a team (both sides).
• Hold one face-to-face meeting (perhaps over lunch ordinner).
• Hold two conference calls.
• Hold one or two concluding meetings and reachagreement.
• Move forward with the research and collaborate!
Sponsored Research Interaction Process Model
Through a series of these types of efforts, the BASIC IPteam has developed various models, practices and frame-works to enable timely, successful contract negotiations.One example of this work is the Sponsored ResearchInteraction Process (SRIP) model, which is designed tohelp companies and universities navigate the complexlandscape of IP contract negotiations.
This model bears fruit when institutions value the col-laborative relationship more than they do any single col-laboration opportunity, utilize their networks toadvantage, and value research support as highly aslicense revenue. The model is described at http://www.hpl.hp.com/research/ur/collaboration/ip/basic.htm. It charts an overall dynamic process thatbreaks through cultural and negotiation barriers andestablishes a joint process for successfully concludingsponsored research negotiations.
The essence of the SRIP model is:
• Build a team.—Convene teams with the appropriatemembers on both the university and industry sides. Eachteam member should have a clearly identified role. Havea lead person on each team accountable for getting totimely agreement. Have the principals and negotiatorsmeet face-to-face to build relationships and enhancerapport.
• Work from the big picture (model).—Set goals at theright level to gain agreement, and establish metrics, suchas the amount of sponsored research funding, that reflectrelationships and not just transactions.
• Utilize a process that the team commits to use (secure“buy-in”).—Secure strong sponsorship and commit-
ment to making it work. Educate all team members aboutthe process they will use.
• Work the process creatively.—All concerned must beprepared to offer creative insights for getting aroundtough problems and navigating impasses.
• Have an escalation path.—When stuck, leaders mustelevate reasoning to a higher-level of intent, focusing onthe broader collaboration relationship and how theplanned research work will benefit both sides.
Using the Model To Negotiate Successfully
The model described above was recently put to a real-lifetest in the negotiation of a DARPA agreement betweenHP and UC Berkeley. The challenge was to successfullynegotiate an agreement, despite the fact that previousnegotiations had been unpleasant and unsuccessful.Whereas prior negotiations had been the province ofeach organization’s attorneys (who felt that they ownedthe negotiation process) senior executives from eachorganization (directors and vice presidents of engineer-ing on the industry side, and vice chancellor for researchon the university side) led this negotiation. By eliminat-ing the opaque attorney-to-attorney negotiation process,the negotiating team participated in face-to-face gather-ings which built cross-team rapport and “relationshipcurrency” that could be drawn upon later at difficultpoints throughout the process.
The joint team(s) concentrated on the high-levelconcepts and agreement elements of the negotiationrather than the premature exchange of contract languagedrafts, immediately shifting the emphasis from textualnitpicking and legalistic overreaction to consensusbuilding. The negotiation team set an aggressive timeframe (one month), which created a sense of urgency.(The appropriate timeframe depends on such factors asthe cost of negotiation vs. value of the research outcome,the competitive landscape, and time-to-market.)
Prior contract negotiations tended to be open-ended,often due to impasses on only a single point. Having thekey organizational leadership participate on the teamslessened the possibility that a single person with
Continuallyemphasize
relationships ratherthan transactions.
March—April 2008 29
authority could trump all prior progress by the teams.Strong leadership and adherence to process were neededright up to and through the end in order to have theagreement converge.
What We Learned
Key lessons that emerged from this experience with theSRIP model include:
• A pragmatic discussion to focus attention on situationsthat are likely to occur in practice is a much better use ofthe negotiating team’s time than striving for complete-ness and trying to foresee and account for every eventu-ality in the contract.
• The discussions are much more constructive when IPconsiderations are separated from the more importanttask of defining a mutually productive working relation-ship.
• Broad multi-tier relationships are invariably more suc-cessful than single-point relationships. When a companyand university have deep multi-tier relationships withinteractions among counterparts at several levels,alternate avenues for resolving impasses are opened.When discussions and negotiations between a companyand university are confined to a single set of players, thenegotiations are usually unsuccessful or hopelessly pro-tracted.
• People tend to adopt entrenched positions and arguefor them, focusing on repeating their views rather than onadvancing progress toward agreement. As a result, theyexercise limited creativity in finding a solution, focusinginstead on “we need this because . . .” and stalling on thecomplexity and irresolvability of the situation. Their“can’t do” philosophy focuses on “educating” the otherside rather than engaging in true negotiations.
Key lessons learned from using the process frameworkinside the SRIP model are:
• Negotiators must recognize that the negotiationprocess is parallel and iterative rather than linear.
• Although there are no “cookie cutter” formulas for U/Inegotiations, reasoning from first principles andadapting the practices for the specific situation seems toyield success.
• Selection of the collaboration model and IP positionsshould be driven by business need and academic need.
• Work from the process/pattern level down to thedetails (not the other way).
• Success requires constant shepherding and facilitatingfrom the top leadership on both sides to ensure that theteam members do not work from local points of view andnarrow agendas (e.g., sidebar conversations/emailrenegade battles).
• Work toward a timeframe (e.g., negotiation tocomplete in less than one month).
• The leadership should be prepared to reconfigure theteam if necessary, especially if talks stall, and continu-ally emphasize relationships rather than transactions.
• Use attorneys effectively in the process, protectingtheir time and employing their expertise and insights atthe appropriate points in the negotiation.
Recent Negotiations
We continue to use these frameworks, models, prin-ciples, and practices in negotiating agreements. Usingthe SRIP model, HP and UC Berkeley shortened the timeto negotiate a DARPA subcontract to two months.Building on this success and the relationships that wereestablished, HP has also been able to negotiate otheragreements with UC Davis in less than one month!
Overall, team members much prefer these frameworks tothe chaos of the past. There are fewer disappointments,fewer occasions when the right individuals are notpresent, fewer surprises, more team participation, greatersatisfaction in the outcome because of the precedent,proof of principle and applicability to future negotia-tions. When universities and industry value their ongoingrelationships more than any single transaction and utilizetheir networks to advantage, the overall dynamic is posi-tively changed, making it possible to enable the collabo-rations that are imperative to mutual success ��
Acknowledgement
The description of the IPIRA program was contributed toby Carol Mimura, assistant vice chancellor for IPIRA.
References
1. 2007. OECD Science, Technology and Industry Scoreboard.2. Johnson, Wayne. 2006. The Collaboration Imperative. Universi-ties and Business: Partnering for the Knowledge Society. Glion VColloquium, Economica, Paris, France.3. Burnside, Beth, and Witkin, Lou. 2006. University-Industry Col-laborations: Recent Trends, Challenges, and Advances in MakingThese Work in Successful Engagements. Industrial Research InstituteFall Meeting, October.
HP has been able tonegotiate agreementswith UC Davis in less
than one month!
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