Tech Transfer Central
Increasingly, directors find willing partners on the international stage

TTOs hunt for investors, new commercialization opportunities in overseas markets

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Virtually every TTO is under constant pressure to find more partnerships and sign more deals that are far from easy to secure. But what if you expanded your territory — and your potential chances for success — by setting up shop on the other side of the globe? That’s the thinking behind a growing number of international initiatives TTOs are spearheading in the hopes that they can eventually leverage new ties overseas into benefits with lasting impact at home.

While many of these forays build on existing relationships a university may have with a like-minded institution in another country, there is no denying the layers of complexity involved when you seek to do business in another cultural, legal and business environment. However, the TTOs engaged in these activities believe their efforts are well worth the up-front investments in time and resources. In fact, some make the case that it is their duty to chase down such opportunities, given the clear trend toward globalization.

Find like-minded partners

It is all about making connections, according to John Flavin, director of the Chicago Innovation Exchange (CIE), a start-up engine/incubator hub at the University of Chicago. “We are an enabler of connectivity of students, faculty and staff to the external ecosystem, whether that be locally or around the globe,” he explains. “In order to build a business in today’s marketplace, particularly a business that involves technology, you need to be aware of the global market from day one.”

Consequently, to build a global strategy for his efforts, Flavin has zeroed in on where the university already has a footprint in emerging markets. “The university has a center in Beijing and a presence in Hong Kong … so China was a first step in this direction, beginning with a partnership with Shandong University.”

The Qingdao, China-based school has similar interests, wanting to develop its entrepreneurship program and to build an innovation college, notes Flavin. “They wanted to learn about some of the activities that we had, and they also wanted an opportunity to expose some of their stakeholders, including investors, to opportunities in the United States emerging from places like Chicago,” he says. “We were interested in connecting our companies to investors and potential markets in China.”

While the relationship is new, it is has begun to pay dividends. Several CIE start-ups have already been to Quindío to compete for prize money as part of the Sino-U.S. Innovation and Entrepreneurship Competition, jointly sponsored by Shandong University and the city of Qingdao, with two of the companies wining prize money.

“What it did was expose companies to the Qingdao opportunities,” explains Flavin. “There were partnership discussions that took place in addition to the opportunity for the teams to compete for investment dollars.”

A low-risk approach

China offers some singular advantages that seem tailor-made for early-stage innovations, according to Flavin. Specifically, Chinese investors seem more willing to take a shot on earlier stage technologies, especially with respect to companies that have an interest in the Chinese markets and “particularly in areas where the Chinese government has a strategic interest such as in the life sciences and biotechnology,” he explains. The Chinese government even provides financial support, in some cases, which serves to mitigate some of the risk of these early-stage investments, adds Flavin.

“When you look at the Chinese market from a pharmaceutical perspective, it is a growing market. The businesses that have historically been manufacturers in the Chinese marketplace are increasing in number, and there is greater attention and focus around early-stage, novel technologies where capital is needed and IP is usually at the heart of those technologies, whether they involve a new drug, a new device or a new diagnostic tool,” he explains. “The need for capital is intense for the development of these types of regulated products, and you are seeing an increased talent pool and an increased set of activities in China that make it an ideal place to develop some of these technologies.”

Flavin emphasizes that Chinese investors are “acutely interested” in developing technologies for the Chinese market, and any TTO or entrepreneur interested in entering the market needs to be aware of the local business and legal environment. “China is continuing to be a lot more sophisticated when it comes to IP protection,” observes Flavin. “It is an emerging market that is providing more protection to developers of drugs, and the regulatory environment is becoming more refined. Therefore, it is becoming a more ideal market within which one can develop a technology and protect it.”

Flavin acknowledges that there are costs involved with doing business internationally, but he contends that it is more costly to ignore a market. “When you are developing certain technologies like a drug, you really can’t choose to ignore the global markets,” he observes. “If you consider it from the standpoint of being able to get access to capital, develop the technologies and pursue a market, those early-stage costs become less daunting.”

Further, Flavin makes the case that the way CIE is carrying out its global strategy makes good economic sense. “Rather than us setting up a TTO shop in China or setting up an incubator there, this is a step toward being physically present in a more sophisticated way,” he says. “From a technology development standpoint, this is allowing us the opportunity to learn what challenges go along with this in a lower-risk format than expending fixed assets and more significant dollars as we see what the right strategy is.”

Flavin adds that CIE is still in an exploratory phase of what makes the most sense for its strategy in emerging markets. “I think finding the right partner to get you started is critical, and finding ways — without a lot of risk — to establish a presence and iterate from there,” he says. “But if you don’t have the right partner, and you don’t have boots on the ground to begin with, it is really hard to get started.”

Build on natural ties, alliances

The Indiana University Research and Technology Corporation (IURTC) in Bloomington also has its eye on China, and it is hoping to nurture ties there that translate into valuable investments and resources for technology-based start-ups. Marie Kerbeshian, IURTC’s vice president of technology commercialization, wrapped up her third visit to the country this past spring. She took part in the 14th China International Talent Exchange Conference in Shenzhen, as well as an international technology transfer workshop there.

Kerbeshian notes that IURTC’s interest in the country is a natural extension of a larger goal of the university system. “We have a lot of alumni in China, and we have a president of the university system who is really committed to building ties between IU and Asia,” she says. “What we see as our role as a tech transfer office is in helping our start-up companies create research relationships and then hopefully long-term licensing relationships with companies and investors in China.”

She adds: “We are trying to get creative and look at how we can help our start-ups move technologies further along in the development pathway, and working with Chinese companies and Chinese investors is one way we see of doing that.”

There is an opportunity for start-ups to access capital in China, but not in the traditional way, explains Kerbeshian. “One of the things I have picked up on in my visits is there is a lot of investment money in China, especially since it has become more difficult for the Chinese to invest in real estate. So there are investors who want to invest, but they’re very cautious about sending money outside of the country and investing in start-ups in the United States,” she says. “There is a great reluctance to send the money without some level of control … so we are trying to figure out how this money can be deployed within China to help these start-ups.”

Make intentions clear early

Long term, that may involve a start-up opening an office or branch in China and deploying products or services there, but for now IURTC is more focused on technology development. “For example, if you have a start-up that needs to humanize a mouse or a rat antibody or it needs some preclinical data generated, there are some companies in China that can do that,” explains Kerbeshian. “If funds in China could be spent to do that, the value for the company in the United States is that it is getting access to work that it could not otherwise afford to do.”

There are barriers to contend with in China. For example, Kerbeshian observes that the contacts she has interacted with are not familiar with the way early-stage technologies are typically licensed in the U.S. “We typically do a low upfront [fee] and then milestones along the way, and then we are taking a look at whether the technology is successful and whether we will make money off of the royalties,” she says. “The mindset of the people I have talked with in China is they want me to tell them how much the technology is worth, they will write a check, and I can just be on my way. That is difficult.”

When communicating with Chinese investors, Kerbeshian has found that it is very important to establish very early on what you have and what you can do with them versus what you cannot do, again emphasizing that your technology is very early stage. “When people talk about technology transfer in China — for example, at these very large technology transfer conferences — it tends to be the idea of established technologies in the West that can then be readily moved into the Chinese market,” she says. “You don’t want to waste your time or their time if your Chinese counterpart is thinking you have something that is close to the market and you don’t.”

For universities that have not yet done deals in China, Kerbeshian points out, it is important to understand that there are laws, regulations and safeguards used in the U.S. that will not apply in China. “Insurance, indemnification and product liability are going to be completely different or non-existent there,” she says. “We feel more comfortable in helping our small companies and startups do their deals directly in China versus the university doing them directly for that reason.”

Another issue to keep in mind: when speaking with contacts outside of the country be careful not to run afoul of U.S. export control laws, advises Kerbeshian. “If you have a patent application or a patent published you don’t have as many concerns, but once you start talking about technologies that aren’t yet in the public domain, you have to be very careful that you are not violating any U.S. laws.”

Build a network

Rochester, MN-based Mayo Clinic Ventures is itching to do business in Israel. Why? Because Israel has the largest global ecosystem outside of Silicon Valley, observes Timmeko Love, a business development manager at Mayo Clinic Ventures. “What we are looking at is a number of ways to commercialize — not only with established players, but also with emerging companies,” she explains. “Increasingly we see opportunities with start-ups coming out of Israel, and certainly it is a start-up nation.”

Further strengthening the lure of Israel is the fact that Mayo has a benefactor with a specific interest in advancing opportunities with Israeli-based start-ups, explains Love. The Merage Institute, a Newport Beach, CA-based philanthropic organization, provides annual research grants of up to $150,000 annually to Israeli companies that are working with the Mayo Clinic.

As part of this effort, the Mayo Clinic Israeli Startup Initiative has designs on engaging with Israeli-based companies through sponsored research grants as well as co-development opportunities. And the interest certainly goes both ways, according to Love. “Most of these companies are looking at opportunities to work with Mayo Clinic, but get into the U.S. market downstream … [and] there are also some nearer term opportunities in their domestic markets,” she explains.

While this is the first time Mayo Clinic has targeted a specific country for commercialization opportunities, it has been collaborating with international partners for years, and much of this activity has been a natural extension of the cutting-edge research that takes place at the world-renowned institution. “For a number of our investigators, quite honestly, they are used to going to conferences and interacting with collaborators from a research standpoint,” observes Love.

Cultural fluency and understanding the IP protections on an international scale are always challenges, acknowledges Love, but she notes that Mayo has partners in place to help the organization navigate as well as a team that understands the complexities involved. “We have talent from around the world and we have networks around the world,” she says. “We are already doing research with folks internationally, so why not engage in commercialization efforts on a global scale.”

For TTOs that are not as far along as Mayo in mining opportunities abroad, Love’s advice is to begin by building an international network. “It really starts with that business development effort. That will allow you to establish a strong global network. I think that is critical,” she says. “Any collaboration is only as strong as the people involved.”

Make sure benefits go both ways

While there are complexities involved, you don’t necessarily need a large, multifaceted TTO to start nurturing international ties. For instance, the Office of Technology Transfer and Economic Development (TTED) at Missouri University of Science and Technology in Rolla, MO, is actively looking for willing collaborators in Russia, and tech transfer officials are hoping that this is just the first of many such international ventures.

What started TTED down this road was a visit to Russia by Vera Anderson, the senior licensing and business development associate at TTED. In September of 2015 Anderson, who is a native Russian, spoke at a conference on IP and innovation practices that was hosted by Peter the Great St. Petersburg Polytechnic University.

As a result of contacts Anderson made at that conference, Missouri S&T later hosted a delegation that included several representatives from leading research universities in Russia. “What we hope to accomplish, first and foremost, is to expand our network and to understand the market better, including the international market,” explains Anderson. “We hope to have more contacts and more opportunities to promote technologies that are coming from our university.”

Of course, the Russian universities hope to gain from the experience as well, and they have much to learn from an innovation ecosystem that is much more advanced than the environment in Russia. But the learning goes both ways, according to Malcolm Townes, associate director at TTED. “They are facing different challenges, but in communicating and collaborating with them, it helps us gain some insight into the challenges we face, and hopefully it helps us develop more best practices to help us do our jobs better.”

There are some points of commonality with the TTOs from Russia. “We are a smaller TTO, so obviously we don’t have the resources that larger offices have…. We have to be a little bit more creative in how we approach the job,” notes Townes. “Looking at opportunities where we can collaborate with other TTOs, particularly those that resemble ours, even if they are in a different environment, is valuable.”

Further, there may be opportunities to package technologies together in order to produce stronger portfolios, and to expand TTED’s network of potential licensees. “Those types of things you don’t always see when you go into these types of activities or collaborations, but once you get into it you start seeing the potential,” adds Townes. “Russia just happened to be the first significant opportunity for us that popped up on the radar.”

Think beyond commercialization

While gaining access to new funding for start-ups would certainly be a welcome development from TTED’s international efforts, administrators are actually thinking in broader terms that go beyond commercialization. “You start getting into larger conversations about entrepreneurship education and bringing in those types of learnings into the research space, and that was certainly one of the topics of interest in this initial meeting we had with the delegation from Russia,” observes Townes. “It was something that they were keenly interested in — this whole aspect of entrepreneurship, lean entrepreneurship and how that ties back to tech transfer.”

The Russian universities see this as an opportunity to learn new best practices and accelerate their learning curve, notes Townes.

Anderson’s advice to other TTOs that are thinking about venturing into international waters is to approach the process with an open mind. “Be ready to listen and not just talk and give advice and assume that people will listen to you,” she says. “Many countries in the world are not as advanced in technology commercialization, not as advanced in the processes, but they have as much to share in talking about their markets and talking about peoples’ perceptions.”

Townes adds that rather trying to make a big splash with a new international partnership, consider starting with a smaller project and more modest goals. “Get to know each other,” he says. “Take the approach of trying to break off smaller chunks that you can get your arms around and focus on implementing those. Look for things that can be done relatively quickly with relatively low resources … and where you can see some type of impact, even if it is a small impact, fairly quickly.”

Tap into joint marketing potential

The Purdue Research Foundation (PRF) in West Lafayette, IN, sees its new collaboration with Seoul, South Korea-based Hanyang University as a continuation of what it has been doing for many years in the states. “We have really seen the benefits of partnering with other universities or other institutions that share the same drive for getting deals done and getting innovations to the marketplace,” explains Emily Najem, corporate counsel and director of strategic communications at PRF. “We have had a few other [arrangements] like this … and they have really shown that collaboration and partnership help drive innovation and commercialization.”

Specifically, PRF and Hanyang have pledged to collaborate on the commercialization of each other’s IP. “The marketing of IP is definitely an interest for us,” observes Najem. “Our goal as a land grant university is to get these technologies to the marketplace … so this is definitely a mechanism that can help us do that, and do that in a foreign market with someone who has boots on the ground, a different type of stakeholder, and [other] interested parties.”

Similar partnerships that PRF has had with universities and research labs in the states have indeed generated interest for Purdue technologies as well as the IP assets of their partnering organizations, notes Najem. “We are both getting more hits, more views and interest in licensing,” she says.

In the case of the Hanyang partnership, select IP assets from each university will be jointly marketed through each institution’s website and other promotional venues, although the universities will retain ownership of their own IP assets. “We will continue to do patent prosecution for our technologies and they will continue to do patent prosecutions for their technologies,” explains Najem.

Beyond the marketing of IP, there may be opportunities to bundle technologies from the two institutions together to produce better products or methods, and there may also be opportunities for joint research, explains Najem, noting that as a leading engineering institute, Hanyang is a “great fit” for Purdue.

The way this partnership came about illustrates the value of staying in touch with alumni. It turns out that a former Purdue graduate now works in the TTO at Hanyang University. “The connection was made between one of our employees and that former Purdue grad,” explains Najem. “He will be a great translator if needed. Luckily, though, our office of technology commercialization is a super diverse group, so we’ve got people who can speak multiple languages and have all different types of cultural backgrounds. That can help a lot with these partnerships.”

Contact Anderson at 573-341-4690 or; Flavin at 773-702-2076 or;Kerbeshian at (317) 274-5904 or; Love at 507-266-0558 or; Najem at 765-588-3489 or; and Townes at u

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