Succeeding in a Global Research Community

1
Succeeding in a Global Research Community

• Susan B. Butts
• Director, External Technology
• The Dow Chemical Company

2
What Drives Company Decisions?

• The need to be profitable (i.e., competitive)
  drives RD decisions
• RD spending is viewed as an investment in future
  success and profitability
• Seek to maximize the return on this investment
• Avoid making poor investment decisions
• Generating, protecting, and commercializing IP
  from research is the basis of competitive
  advantage

3
What Do Companies Want in Sponsored Research
Agreements?

• Companies want reasonable control of foreground
  IP resulting from research that they sponsor
  because without this they may
• Be unable to use technology developed with their
  funding (bad research investment)
• Have to pay licensing fees/royalties that make
  commercialization unattractive (bad business
  decision)
• Find that the university decides to license the
  technology to a competitor (worst nightmare
  damages competitive position)
• Reasonable control will vary from project to
  project depends on the sensitivity of the
  technology to the company

4
Some Agreement Statistics from Dow

• Sponsored research agreements from Dows central
  External Technology database
• only includes bilateral agreements with
  universities in the United States in effect
  during the period 1993-2003
• 100 agreements
• 57 universities
• excludes atypical agreements (e.g., where a
  separate license agreement was in effect) and
  agreements for testing services
• only includes agreements administered from the US
  for US-based clients client base includes both
  corporate and business RD groups

5
Reasonable Control is Difficult to Get!
6
Getting to Win-Win

• Understanding of and reasonable accommodation for
  the mission/objectives/constraints of both
  partners
• Take the approach What would it take to make
  this work?
• Flexibility allows partnership over more of the
  project spectrum
• Creativity consider alternatives such as option
  extension fee or technology fee that satisfy
  needs of both parties

7
One Size Doesnt Fit All

• Tailor sponsored research agreements to fit
  project circumstances
• nature of partner institutions
• prior investment in project field
• background IP
• non-financial contributions
• proprietary information
• non-commercial materials
• parallel activities/shared results
• tax issues
• commercialization issues

8
Getting to Win-Win

• Success requires support of senior leadership
• risk/benefit management instead of risk
  minimization
• e.g., Penn State risk-based assessment
  expedited review
• e.g., Dow risk-based assessment - fast track
  agreement
• look a whole range of U/I relationships
• philanthropy, hiring graduates, equipment
  donations, researcher/faculty visits, sponsored
  research, research consortia
• maximize the whole package rather than
  sub-optimizing any component

9
Topics for Discussion

• To what extent do ERCs have foreign partners or
  members?
• Is there a trend (increasing or decreasing
  foreign participation)?
• Do you see any impact from globalization in ERC
  membership and activities?
• Do member companies talk about this?
• Do company members bring up IP issues as a
  negative factor in ERC projects?
• Would you know if companies complained about
  these issues or would this be handled by your
  research administration office?