UNIVERSITY TECHNOLOGY
COMMERCIALIZATION IN TURKEY
LES TURKEY CONFERENCE 2010
ISTANBUL
Omer Hızıroğlu
Caveat & Contents
• This presentation is not meant to be an
exhaustive presentation of empirical data
• Rather it aims to paint a general picture of
where Turkey stands with regards to
University technologies and their commercial
application/applicability as compared to
other general models with proven track
records else where on the Globe.
Relevant background info
• Inovent: Tech commercialization company, fully owned
subsidiary of Sabanci University. Launched in 2006
• Works with other universities, SMEs, Entrepreneurs.
• Strategic Partnership with Hacettepe Teknopark
• 3 Main areas:
– University tech management & commercialization
• 9 spinouts and 2 start-ups to date. 4 exits, 2 successful (2009)
• 3 spinouts in the pipeline (including two with the Inovent seed
fund)
– Inovent seed fund. Investing up to a max of 250 K on tech
based ventures. Launched in September of 09. 4 Term
sheets , 2 investments in the pipe line to date
– Incubation center at GOSB Teknopark
Technology Commercialization
• What is it?
• Technology transfer vs. technology
commercialization:
– AUTM definition: Technology transfer is a term
used to describe a formal transfer of rights to use
and commercialize new discoveries and
innovations resulting from scientific research to
another party.
http://www.autm.net/FAQs/2186.htm#1
Technology Transfer Office
• Generally a University TTO has the mandate of
achieving commercial value for IP s originating
from within the University.
• TTO, TMO, TCO, OL, OTL, TLO… “a rose by any
other name would smell as sweet*”
– What things are and why they are there matter.
– Distinctions are to be left for another day
* William Shakespeare
Types of TTOs
• Administrative part of the university
• A profit or nonprofit aggregator type entity
– Private, public or a hybrid
• A for profit separate legal entity, subsidiary
– University spin off
– Independent venture
Universal realities
• University and research organization output of
technology tends to be immature, vague
concepts on commercial applications, no
market perspective
• University vs Industry IP
University technology
• University technology is often at embryonic
stage:
•
•
•
•
•
•
•
Non tested, often not even patented
RoI: in most cases long term and unforeseeable
Requires significant investment for feasibility
Requires significant investment for Proof of concept
Valuation difficult at early stage
Market position not considered
Various types of IP s in different fields Tech transfer officers
often lack specialized knowledge / experience
Industry technology
– Industry IP
Results from strategic R&D decision
Target Market/field
Draws on previous experience in the sector
Anticipated value
Allocated funds for further R&D / Proof of concept
Often developed with a commercial intent from its conception
specialized knowledge and cumulative experience of the legal
entity
• CIPO supervision and selected strategic targets
•
•
•
•
•
•
•
Professors' dilemma?
• Potential Conflicts:
– Desire to publish vs. Withhold information until patent application is
filed.
– Inventor’s (researcher) time sharing between the project and his/hers
academic obligations
– Focusing on commercially feasible projects vs. foregoing scientific
interests
– Sharing of income between inventors, university, students etc
– The pain of filling an invention disclosure
– Ethical considerations:
• military applications/military funds, greater good…
• A for profit TTO within a non profit Institution
• Altruistic goals vs. selfish capitalist motivation
How does the system work?
Invention
•Basic
research
•Funded
research
•etc
Evaluation
•Patentability
•Commercial
application
IP Task force:
• Understand the
claimed invention
•Identify potential
commercial
strategies
•Determine
patentability
IP protection
•Who owns?
•Academic
privilge
•Who pays?
Commercial
strategies
Spin out
/licensing?
“Scientific progress goes BOINK?”
Calvin &Hobbs, Bill Watterson 1991
TTO’s in Turkey
• There is about 140 Universities in Turkey
• Around 30 techno parks, 19 of which are active
– Unconfirmed number of start ups launched by professors
• Few TTO examples in Turkey:
– Inovent
– Hacettepe Technology Transfer Center (within Hacettepe Techno Park).
Launched in 2008
• Main focus is on industry –university collaboration and tech transfer
– METUTECH (ODTÜ) TTO. Launched in 2007
• IP filtering, securing IP protection. Incubation services.
– EBILTEM (Ege University). Launched in 1994
• Industry-university, Industry-Industry support. IP and licensing support
services. Two spin offs
– Bilkent cyberpark, Gazi Teknopark, etc
Professor’s dilemma (local
ecosystem)
• Pressure to publish: publish or perish
• Burdensome IP disclosure process
• Very few universities have a TTO with skilled Technology
Managers and Licensing professionals
• Role of TTO or its very existence unknown, misunderstood
or mistrusted
• Despise of commercial gain
• Incompatibility of academic occupation and an
entrepreneur state of mind (sometimes artificially created)
• Very few success stories, culture of entrepreneurship while
not new is at a different level
Background on Turkey
• Patent Law: Decree Law 551 (1995)
• Who is the owner??? (not a great question to ask in technology
transfer)
– Professor’s Privilege: Art 41: It is a general exception to employee
inventions (“work for hire” doctrine). Faculty member (as defined by
Law on Council of Higher Education 2547 -YÖK) own their inventions.
Their sole obligation is to inform the university in writing (ie: invention
disclosure). The university may request to be reimbursed (from
monies received from the invention) its own costs.
– On academic privilege, a notable example: The German case: The
professor’s privilege ended in 03
– Turkey is one of the very few examples left
– Right to publish?
– Know how? And more importantly whose is it?
• Can the University transfer this know how along with or independent from the
patent? What are professor’s rights
Ecosystem(cont)
• General unawareness of IPRs
• Some state funds available to professor not to the university
• 2547 (YOK) restrictions on ownership, employment of academic
personnel outside the institutions
– Exception Tech. Dev. Zones Law 4691: with permission and within
techno parks
– 4691 (2000) led many universities to launch techno parks
• Confusing decentralized incentives packages, funds and programs
available
• Danger of buzz words: “innovation”, “patent”, “IP”
• Some Universities desire to build a patent portfolio regardless of
commercial applicability (not so new high cost invention to
effectively gather dust by remaining stationary in binder on a shelf)
Ecosystem(cont)
• Corporations are less likely to have capacities to absorb/utilize early
stage university technology
• Strangers in the night? University-industry flirt is there but shy.
• Young ventures, SMEs and in particular start up and spin offs are
very few and fewer still are those able or willing to negotiate with
universities to license a technology (x change IP for equity, deferred
royalty)
– Note: Ministry of industry’s SANTEZ programs: the ministry finances
75% of the costs for 25% to be submitted by the industry to r and d
new technologies and in particular their application to industry a
good lead to startup/university interaction
• How to market, how to package, showcase technologies
• Angels? Early stage funds? VC activity
• IPO? Traditional exits?
Ecosystem(cont)
• Quality of IP: Globally competitive
– Pure research perspective does not always lead to
commercial IP
– How far should the Turkish TT Officer go up
stream?
• Beyond the question of should we influence the
researchers with our commercial perspective
– Pedigree of IP?
– Commercialization of diaspora IP? Potential and
credibility
Ecosystem(cont)
• Motivations of main actors?
–
–
–
–
Expectations of stake holders is a stumbling block
It is a lengthy, long term process
Very few universities do actually make money
If major or sole motivation is to make money, the venture
is likely to fail keep the greater perspective in mind
• There must be system (not bureaucracy!). Swift actions
and action plans (not lengthy meetings)
• Uncoordinated efforts by a few, especially on TTOs
• Government involvement? Caution!
Ecosystem(cont)
• Generally speaking ecosystem is not build yet
• Few technology out there (not yet mined)
– Better more focused triage needed
– Create awareness
• Few skilled Licensing professionals with
Universities as with major corporations
• Importance of IA managment underestimated
Few numbers
• Sabanci University is one of the most active universities in the field of tech
transfer and commercialization of University IP in Turkey
• 2009 Q3 numbers:
–
–
–
–
–
–
–
•
•
•
•
•
Total research budget 60 million TL
%15 commercial funds
%30 TÜBİTAK (S and T research Council)
%30 EU commission
%12 other national funds(DPT, San Bak. )
%10 other international
%3 SU internal
2000-2005: 14 Invention disclosures
2005-2009: 26
Of a total of 40 Inv. Disc 16 applications
1.5 million TL (aprox 1 million USD) per application
AUTM numbers for 2007 suggest 2.5 mil per application
A patent that sells
What we are doing
• Key issues:
– Not the size of the portfolio but the quality of it
• More selective and informed triage process
– But increase budget (beyond maintenance costs) with the expectation of
increasing promising IP disclosures
– Streamline disclosure process
– Down grade expectations (to reality): No overnight success!
– Clean up ownership structure of IP and create transparent and foreseeable
TTO process that is attractive to faculty
– University focused drafting, agents who understand the academia
– Start marketing efforts from the IP disclosure day: start “packaging”, identify
potential partners, review network and prepare a due diligence folder
– Increase network reach
– Promote IPR, promote industry cooperation
– Respect basic research and not get involved to upstream
– Increase HR abilities in TT Management
The goal
• To harness the innovative potential of Turkey
• Encourage, motivate & educate
• Get better at mining but
– Help create the ecosystem (win-win for all) that
generates diamond in the rough:
•
•
•
•
•
Cooperate with other private, public actors
Cooperate and assist government efforts
Build cooperative platforms and networks
Attract, create venture funds
Focus on the greater good
• We need to build the field before we can play ball
THANK YOU!
Omer.hiziroglu@inovent.com.tr
UNIVERSITY TECHNOLOGY
COMMERCIALIZATION IN TURKEY
LES TURKEY CONFERENCE 2010
ISTANBUL
Omer Hızıroğlu
Caveat & Contents
• This presentation is not meant to be an
exhaustive presentation of empirical data
• Rather it aims to paint a general picture of
where Turkey stands with regards to
University technologies and their commercial
application/applicability as compared to
other general models with proven track
records else where on the Globe.
Relevant background info
• Inovent: Tech commercialization company, fully owned
subsidiary of Sabanci University. Launched in 2006
• Works with other universities, SMEs, Entrepreneurs.
• Strategic Partnership with Hacettepe Teknopark
• 3 Main areas:
– University tech management & commercialization
• 9 spinouts and 2 start-ups to date. 4 exits, 2 successful (2009)
• 3 spinouts in the pipeline (including two with the Inovent seed
fund)
– Inovent seed fund. Investing up to a max of 250 K on tech
based ventures. Launched in September of 09. 4 Term
sheets , 2 investments in the pipe line to date
– Incubation center at GOSB Teknopark
Technology Commercialization
• What is it?
• Technology transfer vs. technology
commercialization:
– AUTM definition: Technology transfer is a term
used to describe a formal transfer of rights to use
and commercialize new discoveries and
innovations resulting from scientific research to
another party.
http://www.autm.net/FAQs/2186.htm#1
Technology Transfer Office
• Generally a University TTO has the mandate of
achieving commercial value for IP s originating
from within the University.
• TTO, TMO, TCO, OL, OTL, TLO… “a rose by any
other name would smell as sweet*”
– What things are and why they are there matter.
– Distinctions are to be left for another day
* William Shakespeare
Types of TTOs
• Administrative part of the university
• A profit or nonprofit aggregator type entity
– Private, public or a hybrid
• A for profit separate legal entity, subsidiary
– University spin off
– Independent venture
Universal realities
• University and research organization output of
technology tends to be immature, vague
concepts on commercial applications, no
market perspective
• University vs Industry IP
University technology
• University technology is often at embryonic
stage:
•
•
•
•
•
•
•
Non tested, often not even patented
RoI: in most cases long term and unforeseeable
Requires significant investment for feasibility
Requires significant investment for Proof of concept
Valuation difficult at early stage
Market position not considered
Various types of IP s in different fields Tech transfer officers
often lack specialized knowledge / experience
Industry technology
– Industry IP
Results from strategic R&D decision
Target Market/field
Draws on previous experience in the sector
Anticipated value
Allocated funds for further R&D / Proof of concept
Often developed with a commercial intent from its conception
specialized knowledge and cumulative experience of the legal
entity
• CIPO supervision and selected strategic targets
•
•
•
•
•
•
•
Professors' dilemma?
• Potential Conflicts:
– Desire to publish vs. Withhold information until patent application is
filed.
– Inventor’s (researcher) time sharing between the project and his/hers
academic obligations
– Focusing on commercially feasible projects vs. foregoing scientific
interests
– Sharing of income between inventors, university, students etc
– The pain of filling an invention disclosure
– Ethical considerations:
• military applications/military funds, greater good…
• A for profit TTO within a non profit Institution
• Altruistic goals vs. selfish capitalist motivation
How does the system work?
Invention
•Basic
research
•Funded
research
•etc
Evaluation
•Patentability
•Commercial
application
IP Task force:
• Understand the
claimed invention
•Identify potential
commercial
strategies
•Determine
patentability
IP protection
•Who owns?
•Academic
privilge
•Who pays?
Commercial
strategies
Spin out
/licensing?
“Scientific progress goes BOINK?”
Calvin &Hobbs, Bill Watterson 1991
TTO’s in Turkey
• There is about 140 Universities in Turkey
• Around 30 techno parks, 19 of which are active
– Unconfirmed number of start ups launched by professors
• Few TTO examples in Turkey:
– Inovent
– Hacettepe Technology Transfer Center (within Hacettepe Techno Park).
Launched in 2008
• Main focus is on industry –university collaboration and tech transfer
– METUTECH (ODTÜ) TTO. Launched in 2007
• IP filtering, securing IP protection. Incubation services.
– EBILTEM (Ege University). Launched in 1994
• Industry-university, Industry-Industry support. IP and licensing support
services. Two spin offs
– Bilkent cyberpark, Gazi Teknopark, etc
Professor’s dilemma (local
ecosystem)
• Pressure to publish: publish or perish
• Burdensome IP disclosure process
• Very few universities have a TTO with skilled Technology
Managers and Licensing professionals
• Role of TTO or its very existence unknown, misunderstood
or mistrusted
• Despise of commercial gain
• Incompatibility of academic occupation and an
entrepreneur state of mind (sometimes artificially created)
• Very few success stories, culture of entrepreneurship while
not new is at a different level
Background on Turkey
• Patent Law: Decree Law 551 (1995)
• Who is the owner??? (not a great question to ask in technology
transfer)
– Professor’s Privilege: Art 41: It is a general exception to employee
inventions (“work for hire” doctrine). Faculty member (as defined by
Law on Council of Higher Education 2547 -YÖK) own their inventions.
Their sole obligation is to inform the university in writing (ie: invention
disclosure). The university may request to be reimbursed (from
monies received from the invention) its own costs.
– On academic privilege, a notable example: The German case: The
professor’s privilege ended in 03
– Turkey is one of the very few examples left
– Right to publish?
– Know how? And more importantly whose is it?
• Can the University transfer this know how along with or independent from the
patent? What are professor’s rights
Ecosystem(cont)
• General unawareness of IPRs
• Some state funds available to professor not to the university
• 2547 (YOK) restrictions on ownership, employment of academic
personnel outside the institutions
– Exception Tech. Dev. Zones Law 4691: with permission and within
techno parks
– 4691 (2000) led many universities to launch techno parks
• Confusing decentralized incentives packages, funds and programs
available
• Danger of buzz words: “innovation”, “patent”, “IP”
• Some Universities desire to build a patent portfolio regardless of
commercial applicability (not so new high cost invention to
effectively gather dust by remaining stationary in binder on a shelf)
Ecosystem(cont)
• Corporations are less likely to have capacities to absorb/utilize early
stage university technology
• Strangers in the night? University-industry flirt is there but shy.
• Young ventures, SMEs and in particular start up and spin offs are
very few and fewer still are those able or willing to negotiate with
universities to license a technology (x change IP for equity, deferred
royalty)
– Note: Ministry of industry’s SANTEZ programs: the ministry finances
75% of the costs for 25% to be submitted by the industry to r and d
new technologies and in particular their application to industry a
good lead to startup/university interaction
• How to market, how to package, showcase technologies
• Angels? Early stage funds? VC activity
• IPO? Traditional exits?
Ecosystem(cont)
• Quality of IP: Globally competitive
– Pure research perspective does not always lead to
commercial IP
– How far should the Turkish TT Officer go up
stream?
• Beyond the question of should we influence the
researchers with our commercial perspective
– Pedigree of IP?
– Commercialization of diaspora IP? Potential and
credibility
Ecosystem(cont)
• Motivations of main actors?
–
–
–
–
Expectations of stake holders is a stumbling block
It is a lengthy, long term process
Very few universities do actually make money
If major or sole motivation is to make money, the venture
is likely to fail keep the greater perspective in mind
• There must be system (not bureaucracy!). Swift actions
and action plans (not lengthy meetings)
• Uncoordinated efforts by a few, especially on TTOs
• Government involvement? Caution!
Ecosystem(cont)
• Generally speaking ecosystem is not build yet
• Few technology out there (not yet mined)
– Better more focused triage needed
– Create awareness
• Few skilled Licensing professionals with
Universities as with major corporations
• Importance of IA managment underestimated
Few numbers
• Sabanci University is one of the most active universities in the field of tech
transfer and commercialization of University IP in Turkey
• 2009 Q3 numbers:
–
–
–
–
–
–
–
•
•
•
•
•
Total research budget 60 million TL
%15 commercial funds
%30 TÜBİTAK (S and T research Council)
%30 EU commission
%12 other national funds(DPT, San Bak. )
%10 other international
%3 SU internal
2000-2005: 14 Invention disclosures
2005-2009: 26
Of a total of 40 Inv. Disc 16 applications
1.5 million TL (aprox 1 million USD) per application
AUTM numbers for 2007 suggest 2.5 mil per application
A patent that sells
What we are doing
• Key issues:
– Not the size of the portfolio but the quality of it
• More selective and informed triage process
– But increase budget (beyond maintenance costs) with the expectation of
increasing promising IP disclosures
– Streamline disclosure process
– Down grade expectations (to reality): No overnight success!
– Clean up ownership structure of IP and create transparent and foreseeable
TTO process that is attractive to faculty
– University focused drafting, agents who understand the academia
– Start marketing efforts from the IP disclosure day: start “packaging”, identify
potential partners, review network and prepare a due diligence folder
– Increase network reach
– Promote IPR, promote industry cooperation
– Respect basic research and not get involved to upstream
– Increase HR abilities in TT Management
The goal
• To harness the innovative potential of Turkey
• Encourage, motivate & educate
• Get better at mining but
– Help create the ecosystem (win-win for all) that
generates diamond in the rough:
•
•
•
•
•
Cooperate with other private, public actors
Cooperate and assist government efforts
Build cooperative platforms and networks
Attract, create venture funds
Focus on the greater good
• We need to build the field before we can play ball
THANK YOU!
Omer.hiziroglu@inovent.com.tr