Every year, scholars at UCLA come up with more than 400 scientific inventions that have progressed beyond the stage of pure laboratory science to being ready for commercial development. In years past, it has been left to luck whether these seeds germinate and grow into new companies, new jobs and new possibilities for Southern California and our industry partners, or whether they fall on barren ground where they wait in vain for nourishment until, slowly, they wither and die.
To the scientist who has put his or her life’s work into an invention, a failure to put down roots, send shoots up to the sun and achieve at least some life is discouraging. To the people of California, who count on the University of California and our other great universities to continue to generate new industries, jobs and solutions to the problems of our times, each such failure is intolerable. To the federal agencies that entrust nearly $1 billion of research grants to UCLA each year, the goal is for the university to germinate the most promising of these seeds, give them life and then transfer them to the outside world of business or to the non-profit world, where they can achieve a useful purpose.
Late last month, UCLA took a major step in preparing its campus ecosystem to nourish the seeds of its inventions by launching Westwood Technology Transfer, a non-profit subsidiary wholly owned by the university and run by a board made up of business leaders who have spent their long careers in the business of turning scientific discoveries into commercial realities. These board members have cleansed themselves of conflicts of interest and have been subjected to intense scrutiny by UCLA officials to determine their eligibility under the policies of the state of California and of the university.
Although it may seem counterintuitive, an invention cannot become a practical reality unless it is patented. Without patent protections, no company can prevent copycats from using the new technology for free, and thus no company would make the investment in factories and people necessary to launch the product. Patenting, though, is a legal process and an expensive one, with the legal fees to patent an invention ranging from as little as $50,000 up to $1 million for an invention that must be patented in the United States, Europe, Asia and all of the Americas.
Making decisions
No university can afford to patent all of its interesting inventions, not even all of those inventions that have scientific merit that meet the university’s rigorous tests of scientific discipline. WTT will rely on its flow of funds from past inventions to pay all of its patenting expenses, but while that flow is substantial, it is not infinite. A board made up primarily of university “outsiders” can make the decisions to invest in one invention over another without being exposed to the normal pressures of campus politics, which will be another advantage of WTT.
The business minds on the board of WTT will bring to the university the discipline of business logic and the stern tests that the world of competition will ultimately apply to commercially marketed inventions. The UC regents have granted to WTT and its board the exclusive and final authority to decide which inventions warrant an investment of patenting funds, which should receive investment in proof-of-concept development and what licensing terms WTT will accept. In these ways, the well-anchored disciplines of science at UCLA will be supplemented with the disciplines of business analysis and decision-making.
Creating a business board that has independent decision authority over the commercialization of certain UCLA inventions and that is accountable to UCLA is a step that has succeeded at a few other universities, most notably the University of Wisconsin-Madison. UCLA can take heart that its innovation dovetails with UC President Janet Napolitano’s recent decision to commit $250 million to a new UC Venture Fund for investment in campus inventions, such as those that will emerge from WTT.
What does this mean for Southern California’s business community? UCLA’s vast research laboratories have already produced nearly 700 active patents and 100 active startup companies that collectively employ some 5,000 people and contribute an estimated $1.1 billion to the economy. WTT represents the next stage of development as UCLA continues to act on its belief that the work of a research university is not done when the key experiment is completed and the article has been published, but when the fruits of that invention have produced benefit for the larger community outside of the campus.
William Ouchi is a distinguished professor in corporate renewal at the UCLA Anderson School of Management.
