A Special Report from the NYS Assembly Task Force on University-Industry Cooperation

New York State Assembly, Albany, New York 12248
	A Special Report from the NYS Assembly Task Force on University-Industry Cooperation

Sheldon Silver, Speaker William B. Magnarelli, Chair
Summer 2002

Message from the Chair

Dear Friends,

One of the most exciting aspects of our great State is an expansive array of first-rate institutions of higher education. A high energy, innovative and expanding high-technology industry is being nurtured by this academic base, presenting enormous potential for New York’s economy.

In cutting edge fields nano- and bio-technology, biomolecular diagnostics, disease modeling, and high resolution imaging, university-industry collaborative relationships are a driving force. The purpose of the Task Force on University-Industry Cooperation is to determine what the State can do to spur high-tech business ventures.

From diagnosis and treatment of diseases to assuring homeland security, New York State needs to be more aggressive in encouraging university-industry collaboration in high-technology research and development (R&D) that results in business creation and growth providing high-paying jobs for our citizens. If you have questions or would like to raise concerns that you feel we should address, please contact me at the Task Force.

signature
William B. Magnarelli
Chair, New York State Assembly
Task Force on University-Industry Cooperation

NYS Assembly seal
For more information, contact:

Assemblyman
William B. Magnarelli

Chair, Assembly Task Force on University-Industry Cooperation

Room 519 LOB
Albany, New York
12248
518.455.4826

333 East Washington St.
Room 840
Syracuse, New York
13202
315.428.9651

Task Force Background

The Task Force on University-Industry Cooperation, in existence since the 1980s, was re-activated by Speaker Sheldon Silver during the 2001 legislative session, where the Assembly Jobs Agenda included a significant investment in university and technology-based business partnerships. Supporting these collaborations yields both intellectual and economic benefits and the role of the Task Force is to promote existing research and development (R&D) initiatives as well as generate new ideas and goals for academic and high-tech university-industry partnerships.

University-industry cooperation yields benefits for both partners. For industry these include:

recruiting talented employees;
obtaining short-term research to solve specific industry problems;
using university laboratory facilities for research and development;
accessing the results of university research and technology;
contracting with faculty for advice for short- or long-term research; and,
hiring students for part-time work or internships.

And for academic institutions these benefits include:

receiving monetary and equipment donations;
obtaining R&D contracts;
providing opportunities for faculty research and compensation;
using industry expertise for teaching and research; and
attracting and keeping talented students through industry internships and employment opportunities.

Task Force Accomplishments

Formation of Central New York Advisory Committee. On February 1, 2002, the Task Force held its first Regional Advisory Committee meeting in Syracuse, and invited members of the business and academic communities to join in helping to establish an agenda for the Task Force. One of the issues confronted was the fact that while New York State leads the nation in generating income from licensing and is third in attracting federal R&D dollars, it lags behind others in attracting R&D funds from industry and is relatively weak in creating new businesses. ¹

The Task Force and the members of the Advisory Committee are exploring ways in which these rankings can be improved. The following are recommendations from the meeting:

Expedite intellectual property issues to smooth the technology transfer process. While everyone agreed that this was a key element in the success of university-industry relations, members were divided on how to best improve the situation. Some felt that changes could be made to streamline current contracting processes with the State. The consensus was that increased communication between universities and industry could improve the situation by helping to develop more compatible cultures.

Attract more principal investigators to New York. New York lags behind other large states in attracting the best researchers. The State could help by encouraging/supporting investment in facilities, which would involve not only upgrading research laboratories but also making infrastructure improvements, including transportation, to help attract industry.

Improve the "culture of cooperation" between industry and universities. The commitment to high-tech R&D in New York from the federal government, private industry and the State has recently improved. For example, members pointed to the positive experience of the cooperative indoor air quality project in Central New York, but also felt more progress could be made. The Task Force was urged to continue bringing universities and industry together.

Encourage greater small business involvement in university R&D efforts. Steps should be taken to encourage university incubators and further encourage students to develop successful businesses. Internship arrangements between businesses and universities, as well as faculty sabbaticals, were mentioned as ways to facilitate such involvement.

Attract federal money or other resources from outside the region/State. The current large infusion of federal R&D funds was viewed as an important opportunity for New York. The possibility of promoting State or regional "market baskets" was advanced. State officials could help convey to the federal government what is available in New York.

¹Association of University Technology Managers, Annual Report, 2000.

	Task Force on University-Industry Cooperation R&D Dollars by Federal & Industry (Source: AUTM FY 1999)

Roundtable on Patent Policy

James A. Severson of Cornell Research Foundation and Charles Kruzansky of Cornell University joined Assemblyman Bill Magnarelli, Chairman of the Assembly Task Force on University-Industry Cooperation on May 9, 2002, at a roundtable discussion on Patent Policy, attended by leaders from various companies and universities from throughout New York State.

On May 9th the Task Force hosted a Patent Policy Roundtable discussion in Albany. The event was attended by a diverse group of 17 experts in the field — from university researchers and administrators to business/industry representatives to patent attorneys.

As the national economy has become more driven by scientific and technological discoveries, states have become ever more competitive in providing incentives for university-industry research and development and in attracting federal R&D funds. Patent policy is one element that creates the environment for research and development and the value of a 'good' policy cannot be overstated. The latest licensing survey conducted by the Association of University Technology Managers (AUTM) notes that American colleges and universities and the inventors who work at them collected more than $1 billion in royalties, created 368 spin-off companies, and filed for 8,534 U.S. patents in the 2000 fiscal year. According to the AUTM findings for 1999, New York leads the nation in generating income from licensing.

However, while some reports and data show New York in a very positive light, others do not. An example of this is found in a recent report released by the Beacon Hill Institute at Suffolk University [State Competitiveness Report 2001], where New York was found to rank only 14th nationally in new patents issued per capita. An Opinion Survey of selected states designed to gauge perceptions of public and private opinion leaders was also conducted by the Institute and, according to this opinion survey, New York ranked 8th out of 8 selected states — California, Connecticut, Massachusetts, New York, North Carolina, Texas, Vermont and Virginia — regarding leaders’ perceptions of their own states’ competitiveness. New York also ranked lowest in this opinion survey with regard to the ease with which entrepreneurs with innovative business plans can easily find venture capital. Finally, the State ranked last in an opinion regarding the degree of collaboration between companies and local universities.

The role that patent policy plays in these perceptions may indeed be pivotal, and understanding the policies and procedures that lead to significant technology commercialization may be key to improving New York’s economic competitiveness. The meeting focused on the following key issues:

Measuring Success of University Patent Policies. Participant discussion revealed that each university has its own method of assessing 'success' and determines its own measures and goals. Factors varied among participants, as did the weight put on each measure, but usually included the number of disclosures submitted, licensing income, patents issued, leveraged research dollars, and contribution to overall economic development — i.e. business startups and jobs.

Conflict of Interest in the Technology Transfer Process. Participants considered the conflict between a professor’s interest in publishing results of his or her research and the technology transfer office’s interest in obtaining intellectual property rights as promptly as possible to be one of the obstacles to an efficient university technology transfer. The conflict involves industry’s desire to keep potential technologies out of the public knowledge until commercial success is feasible and they become patented. Universities, on the other hand, are inclined to make the results of research available to the public at large earlier in the process. Creating a culture within a university and the surrounding community where administrators, faculty, students, licensing officers, industry, and the State can work in an environment that nurtures the interest of each party is an integral part of technology transfer according to many participants.

Marketing Strategies. When commercializing university technologies, a university technology transfer office has to decide how to market a particular technology. It was noted by many that other states, such as New Jersey, go out of their way to attract business start-ups, including companies currently incubating in New York. New York does not seem to have a coherent strategy to attract and retain new, high-tech businesses. While several participants expressed satisfaction with their respective institutions’ marketing strategies, they noted that the process is very dependent upon staff resources. In some cases, technology transfer offices are simply not adequately equipped to handle all that is required along the concept-to-commercialized-product continuum.

Patent Policy Boards. Patent Policy Boards and Advisory Boards that have a role in commercializing the results of research were acknowledged as crucial to the success of a university technology transfer process. Having successful business people and renowned professors in specific fields of science, medicine, chemistry and physics, for example, to advise universities in pursuing particular technologies for licensing was deemed an invaluable resource.

Funding. Particular attention was paid to the need for the State to match federal funding that targets small technology companies as well as collaborative research efforts between those small companies and research institutions.

Leveraging Federal Funds for High-Tech R&D

The Task Force sponsored a hearing in Albany on June 6 to ascertain what the State might do to help high tech industry and research institutions leverage federal dollars for research and development, especially as it relates to counter-terrorism, or, as it is commonly called now, homeland security. Homeland security, covering everything from the stability of infrastructure to the safety of plant life, is an expanding industry. The potential for states to access R&D funds for this purpose is almost limitless, and can be enhanced with the proper information and support.

In response to the terrorist attacks of September 11, as well as anthrax attacks through the U.S. mail since that time, Congress and the President approved $1.5 billion for counter-terrorism-related R&D in FY 2002, an almost 157% increase over fiscal year 2001’s $579 million.

Federal homeland security R&D is funded by 11 different federal agencies. It is important to know what the State can do to help leverage these funds. One small step taken in the State’s FY 2002 budget is $5 million for the Security Through Advanced Research and Technology Program to help colleges and universities leverage federal counter-terrorism and other research funding.

Federal Counter-Terrorism R&D Funds in millions²

Agency FY 2001 FY 2002 Percent Change

Agriculture 52 195 276.4%

Commerce 4 10 151.8%

Dept. of Defense 235 353 50.1%

Dept. of Energy 68 194 184.7%

EPA 0 70 -

HHS 116 451 288.2%

Justice 43 71 65.3%

NASA 0 33 -

State 5 6 24.0%

Transportation 55 101 85.2%

Treasury 1 1 0.0%

Total 579 1,484 156.5%

² Office of Management and Budget, Annual Report to Congress on Combating Terrorism, December 26, 2001, as reported in American Association for the Advancement of Science R&D Budget and Policy Program, January 2, 2002.

At the hearing, twenty-three witnesses — representing public and private universities, research organizations and labs, business and industry associations, Centers for Advanced Technology, and the National Council of State Legislatures — presented testimony. Witnesses called for flexible funding to universities for initiatives such as incentive packages to retain faculty who are being lured away to out-of-state universities. Awarding flexible funding — to support as-needed staff and specialized equipment — was also encouraged, as was "seed" funding that would enable researchers to move concepts into the product development stage. Most importantly, it was stressed that institutions need financial commitments from the State for a federal grant proposal to be considered. Here are just a few examples of the testimony:

Dr. Robert Richardson, Nobel Prize Winner and Vice Provost for Research at Cornell University, stressed that good faculty are fundamental to the success of research and development and we need to do whatever we can to attract and retain the "best and the brightest."

On June 7, 2002, Assemblyman Bill Magnarelli, Chairman of the Assembly Task Force on University-Industry Cooperation, led a legislative hearing to explore what the State could do to assist universities and businesses throughout New York in attracting federal research dollars, especially for counter-terrorism research.

Dr. Gina Lee Glauser, Executive Director of the Office of Sponsored Programs at Syracuse University, called for pre-seed money to demonstrate "feasibility of proof of concept," and called for an expansion of the use of peer review for projects funded by the State.

Dr. Thomas Triscari, Sr. Technology Program Manager of the National Center for Information and Infrastructure Assurance, Rome Air Force Research Lab, called for creating non-profit industry-academic partnerships.

Dr. Harry Stephanou, Director of the Center for Advanced Technology at Rensselaer Polytechnic Institute and Ed Reinfurt, Vice-President of the Business Council of New York State, stated that we need to build on our own institutions’ strengths, not just import recipes used in other states decades ago.

Legislation

Two Task Force-related bills were introduced during this session:

A. 11130 would establish criteria for the awarding of State funds for the purpose of matching federal research funds in medicine, science or engineering.

A. 11131 would establish an annual patent fair to commercialize New York university patents for licensing. This bill was passed by the Assembly on June 19.

Looking Ahead...

The Task Force will continue to examine the feasibility of leveraging federal dollars for research and development, and explore ways the State can assist researchers and entrepreneurs develop and commercialize new technologies. Additional regional advisory committees attuned to the needs of different geographic areas may be established, and the Task Force will continue exploring ways to encourage university-industry cooperation. Finding ways that the State can retain top-notch students and faculty and persuade new talent to come to New York universities to conduct cutting-edge research in such vital areas as biotechnology and homeland security will also be a top priority. The Task Force will continue to promote and enhance the existing and emerging strengths in university-industry collaborations throughout New York to strengthen the State’s economy and provide quality jobs for New Yorkers.

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