takuji hara graduate school of business administration kobe university

April 2003Takuji Hara, Kobe

University 1

Roles of Technology Licensing Organizations (TLOs) in the Commercialization of Life

Sciences～ Japan’s Situation and

Problems

Takuji HaraGraduate School of Business

AdministrationKobe University


University 2

Contents

The Process of InnovationThe Bridging ProblemTLO as an Organization for Bridging the Two CulturesThe Area of Life SciencesSome Case StudiesA SurveyConclusions


University 3

The Process of InnovationThe Linear Model

Sciences Technologies Products


University 4

The Interactive Model

Sciences Technologies

Organizations Institutions

Prod

ucts


University 5

The Interactive ModelAn Example: Pharmaceuticals

Compound Application

Organizational Authorization

Market

Hara, T. (2003), Innovation in the pharmaceutical industry, Edward Elgar


University 6

The Two CulturesThe Culture of Academic Research (Universities)　 Pursuing Knowledge

Diverse and Longer-term Perspectives　

The Culture of Market Economy (Business Enterprises)　 Pursuing Profits

Focused and Shorter-term Perspective


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The Two Culture and Innovation

To achieve innovation requires both of the two cultures and their interaction.

Bridging the gap between the two cultures is the key to innovation.


University 8

The Bridging Problem

Research World

Understanding NatureReputation in the Academic Society

Business World

Making ProfitsThe Growth of the Company

The Need of Research Funds　　　　　　　　　　　　 The Need of New ProductsThe Desire for Contribution to Society

Bridging → Innovation


University 9

The GatekeeperReceiving Information and Translating


University 10

The Boundary SpannerReceiving and Sending InformationTranslating and Arranging

Research World Business WorldBoundary Spanner


University 11

The System BuilderLinking Elements

Social ActorsTechnological Components


University 12

TLO as an Organization for Bridging the Two CulturesReceiving and Sending Information about Technology and MarketValuing and Enclosing Technology (Translating)Marketing Technology (Translating and Arranging)Choosing Licensees (Linking Elements)Licensing (Arranging and Linking)Management of Intellectual Properties and Licensing Contracts (Arranging)Consulting (Translating and Arranging)


University 13

TLOs in JapanInstitutionalized in 1998 by so-called Japan’s TLO act.32 Official TLOs in Japan (March 2003)Different Forms

・ Stock Corporations ・ Intra-university Organizations ・ Foundations


University 14

Examples of TLOs in JapanCorporations:

Hokkaido TLO (Hokkaido U. etc.)Tohoku Technoarch (Tohoku U. etc.)Institution of Tsukuba Liaison (Tsukuba U. etc.)CASTI (Tokyo U.)Kansai TLO (Kyoto U. etc.)

Foundations:Osaka TLO (Osaka Prefecture, Osaka City, Osaka U.

etc.)Hyogo TLO (Hyogo Prefecture, Kobe City, Kobe U. etc)

Intra-University Organizations:Keio University Intellectual Property CenterWaseda University Intellectual Property Center


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Innovation in the Area of Life Sciences

Very Long Lead-timeHuge CostsHigh Risk, High ReturnDecisive PatentsExclusive Contracts Are Often Required.　　　↓

Significance of Each Licensing Contract　　→ Finding Excellent Partners Is Crucial.


University 16

Case StudiesOTM, UC San FranciscoOTTL, Harvard Medical SchoolIC Innovations, Imperial College, LondonCASTI, Tokyo University


University 17

OTM， UC San Francisco (Aug 2001)

One of UC’s TLOs (Largest Income Source) 4 PhD Licensing Associates in Life Sciences

２ Associates Have Experience in Technology Transfer in Life Sciences170 Contracts a Year, $(2)77m IncomePersonal Network Is ImportantFocus at First, Then Go OpenBio-network in the Bay Area


University 18

OTL, Harvard Medical School (Feb 2002)

Intra-University Organization 4 PhD Associates in Life Sciences All Have Experience in Technology Transfer or Business. Income $25m Personal Network Is Important Bio-network in Boston


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IC Innovations， Imperial College, London (Jul 2001)

Stock Corporation Owned by Imperial College5 Associates (2 PhDs in Life Sciences)3 of Them Have Experience in Business77 Inventions in Life Sciences32 Patents in Life SciencesHuman Network Is ImportantBio-network in London


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CASTI， Tokyo University (Aug 2001)

Stock Corp. Owned by a Group of Academic Staff at Tokyo University 4 Associates (None Works Biotechnology Only) 2 Have Experience in Business but NOT in Life Sciences10 Contracts (10 More Close to Agreement)Co-marketing with Recruit Co. Ltd., a Human Resource Management Consultant


University 21

A International Comparative Survey on the Situation of TLOs in the Life Science

Area(conducted in October 2001 - March 2002)

Licensing Associates in Life SciencesSocial NetworksActivitiesPerformance


University 22

Licensing Associates in Life Sciences

North America Japan

Samples Average Samples Average

t-test *p<.05

Number of Associates 16 3.66 12 2.75

Number of Associates in Life Sciences 16 2.44 12 1.54


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Social NetworksNorth America Japan


t-test *p<.05

Machine Industry 11 2.36 12 4.08 ＊

IT Industry 13 3.15 12 3.75 Chemical Industry 14 3.27 12 3.50

Pharma Industry 14 4.14 12 2.83 ＊ Agri Industry 14 3.14 11 2.73

Machine Engineering 12 2.50 12 4.08 ＊ Chemical Engineering 13 2.77 12 3.67

Electronics 13 3.00 12 3.83 Computer Sciences 13 3.62 12 3.33

Life Sciences 15 4.40 12 2.83 ＊ Faculty of Engineering 13 3.85 11 4.64

Faculty of Sciences 15 4.00 10 3.60 Faculty of Agriculture 11 2.82 9 3.56

Faculty of Medicine 12 4.25 10 3.80 Faculty of Pharmacology 12 3.83 7 2.86

Graduates 13 4.00 11 3.09 Ministry of Industry 12 2.67 11 3.64 ＊

Ministry of Health 13 3.15 10 1.90 ＊ Financial Institutions 15 3.27 10 2.90

5 = V

ery Stron

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Foreign Companies 14 2.43 10 2.10


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ActivitiesNorth America Japan


t-test *p<.05

Finding Technology Seeds 16 3.81 12 4.17

Evaluation of Seeds 16 4.25 12 4.42

Supporting Patent Application 16 4.56 12 4.50

Information Services, Advertisement 16 3.63 12 4.42

Technology Licensing 16 4.56 12 4.33

Management of Royalties 16 4.00 11 4.00

Supports for Research (Grants) 15 3.07 12 2.67

Supports for Spin-offs 16 3.13 12 2.92

Investigation into Technology Needs 15 3.27 12 4.00

Supports for R&D Collaboration 16 3.94 11 3.09 ＊

Supports for Financing after Transfer 14 2.14 11 1.73

Supports for Patent Disputes 16 3.00 9 1.56 ＊

Proposal of Business Plans 16 3.00 11 2.18

Education to Academic Researchers 16 4.06 12 4.00

Education to Potential Licensees 16 4.00 11 3.64

Appeal to Governments 16 2.88 12 3.25

Enlargement of Social Network 16 3.25 12 3.83

Enhancement of Operational Funds 16 3.25 12 3.50

Improvement of Services 16 3.94 11 3.55

5＝Very A

ctive

1＝N

o Activity

Use of Information Technology 16 4.06 12 3.75


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Performance

North America Japan Year 2000


t-test *p<.05

Number of Patents Filed in Total 16 46.50 12 44.83

Number of Patents Filed in Life Sciences 13 30.54 12 11.17

Number of Licensing in Total 15 46.13 12 6.83

Number of Licensing in Life Sciences 12 30.33 12 1.33

Values of Royalties in Total 16 $9.10m 12 $0.05m

Values of Royalties in Life Sciences 11 S7.15m 12 $0.0095m

Note) 1 dollar (Canada) = 0.6 dollar (US), 1 Yen =

0.008 dollar (US)


University 26

ConclusionsTLOs are playing a role of bridging academic and business cultures.In the area of life science, each licensing contract is important.Ability in both life science and business is a key to successful technology transfer.Human network is another key to success.Life science expertise in TLOs is insufficient in Japan.Network in the life science area is underdeveloped in Japan.The linking function of TLOs is weak in Japan.


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Key Tasks for TLOs in Japan

Reinforcement of Expertise in the Life Science Area with Business Experience Development of Social Network in the Life Science AreaActivation of the Linking and Arranging Functions of TLOs


University 28

Recently…The number of experts in life sciences in TLOs is increasing.Social networks and industrial clusters in life sciences are emerging. e.g. The Kobe Medical Industry Development Project

“Saito” life science park, Osaka

More and more university-industry technology transfers in the life science area are achieved.


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Selected ReferencesAllen, T. (1977), Managing the Flow of Technology, Cambridge, MA: MIT Press.Friedman, R. A. and J. Podolny (1992), Differentiation of Boundary Spanning Roles, Administrative Science Quarterly, 37, 28-47.Hara, T. (2003), Innovation in the Pharmaceutical Industry, Cheltenham: Edward ElgarHarmon, B. et al. (1997), Mapping the University Technology Transfer Process, Journal of Business Venturing, 12, 423-434.Hughes, T. P. (1987), The Evolution of Large Technological Systems, in The Social Construction of Technological System (W. E. Bijker et al. eds) , Cambridge, MA: MIT Press, pp. 51-82.Jamison, D. B. (1984), The Importance of Boundary Spanning Roles in Strategic Decision-Making [1], Journal of Management Studies, 21(2), 131-152.Powell, W. W., K. W. Koput and L. Smith-Doerr (1996), Inter-organizational Collaboration and the Locus of Innovation, Administrative Science Quarterly, 41, 116-145.Wiesendanger, H. (2000), A History of OTL, http://otl.stanford.edu.

takuji hara graduate school of business administration kobe university

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