Gerry Turcotte and Jeet Hothi

A Tech Transfer Model that Works

By Gerry Turcotte and Jeet Hothi

T echnology transfer and commercialization are top priorities for the Canadian government. As governments, universities and research labs across the country seek to identify effective technology transfer models, it may be helpful to examine a federal lab whose success rate has made it somewhat of an anomaly in government circles - the Communications Research Centre. (Editor’s Note)

Communications Research Centre Canada’s (CRC) track record for technology transfer is no accident. As an agency of Industry Canada and the leading federal laboratory for R&D in advanced telecommunications, CRC created its own Technology Transfer Office (TTO) in 1991. This was shortly after Canadian Patents and Development Limited was disbanded and science-based departments were left to manage their own intellectual property (IP) portfolios.

Since its formative years, CRC’s reputation has grown steadily among science-based departments for technology transfer. In 2003, CRC was honoured by the Federal Partners in Technology Transfer organization as the best federal laboratory in Canada, and in fact, North America, for technology transfer to industry. The award came after CRC assisted some 80 companies through technology transfer and posted record licensing revenues of $4 million for 2002.

CRC SUCCESS FACTORS

There are several factors that contribute to CRC’s success. First, innovative researchers at CRC are mission-oriented in their R&D, in response to specific government requirements. Having an excellent knowledge of the communications industry ensures that the outputs of its R&D fit with private sector requirements.

Having the TTO physically located on the laboratory premises is also important. At CRC, TTO personnel work directly with R&D staff to identify emerging technologies, develop patent applications and find receptor companies.

Exploiting IP through cross licensing is another success factor. CRC has pursued external business relationships with companies such as United Technologies Corp and Toshiba Corp. By bundling similar patents, the marketing muscle of the large companies is used to maximize benefits from international clients. Meanwhile, CRC can provide a competitive advantage to Canadian companies through considerably reduced licence and royalty fees. These arrangements have generated more than $10 million in licence fees for CRC.

Aggressive and defensive strategies for IP rights are a must. In 1999, a key patent central to CRC’s Fiber Bragg Grating (FBG) portfolio, came under attack from two US-based multinationals – Corning Corp and Lucent Technologies. Perseverance through the US Patent Office and ultimately the US District Court resulted in CRC winning its case. Today, it continues to collect millions of dollars in royalty revenue, while protecting its licensees from external litigation.

Effective IP monitoring and enforcement not only dissuade international companies from infringing upon or using proprietary technology, they also give Canadian companies a competitive advantage. For the FBG portfolio, CRC and its cross-licence partner have engaged an IP law firm to carry out a monitoring and enforcement program. The law firm has already signed several licensing arrangements while some infringing companies have stopped using CRC’s patented technology for fear of legal action.

It’s no secret that providing incentives often helps increase the output of quality work. At CRC, we’ve created a multi-facetted inventors award program that provides financial incentives to inventors for IP transfer to industry. Another effective tactic is the decentralization of decision-making amongst staff. Providing research program managers with a high degree of latitude in managing and running their own R&D projects has resulted in pockets of high innovation output with great potential for commercialization.

Like many other public R&D labs, CRC does not have extensive applied marketing expertise. To compensate, we have hired several specialized IP/technology brokers on a commission basis, including British Technologies Group International, OFT Associates, and Vertex Intellectual Property Strategies Inc to market selected IP.

Through its Innovation Centre, CRC offers Canadian companies the opportunity to locate on campus in order to facilitate interaction with CRC researchers and use laboratory facilities. While the centre accounts for only a small fraction of technology transfer from CRC, it complements other technology transfer mechanisms.

FILLING THE GAPS

It is also important to identify factors that inhibit technology transfer. While there are excellent pockets of research throughout the federal science-based departments whose prime motivation is relevance to their departments, generally there has been no direct incentive for researchers to ensure that the research they do is also relevant to industry. This, in our opinion, is the biggest obstacle to the commercialization of technologies developed in the government labs.

Federal labs do an excellent job of performing R&D but generally do not have applied expertise to market the research outcomes to industry. Our TTO has tried to fill this gap, yet there remains a definite need to develop and/or acquire appropriate IP marketing expertise within the public labs and to commercially exploit IP more fully.

Some early-stage laboratory technologies also need further analysis and study to determine their feasibility for developing a commercial product and application. This is a gap that industry will not fund due to the high risk factor. In the past, CRC used IRAP quite successfully to help companies get funding for further technology development under the IRAP-R program. It may be useful to examine IRAP’s current practices and/or consider the recently announced $25-million commercialization fund to address this gap.

An effective technology transfer office must have a variety of skills and expertise, which is generally in short supply within government. Some skills shortages can be bridged internally. However, we believe there is a large requirement for training.

At CRC, it is our hope that our experience and success rate may assist others striving to reach their technology transfer goals. By working together, we can also address some of the remaining gaps in order to enhance and improve Canada’s score card for technology transfer and commercialization.

Gerry Turcotte is president of CRC, and Jeet Hothi manages CRC’s Technology Transfer Office. FMI: www.crc.ca.