4.2 Starting/Building/Operating a TTO

4.2.1 Elements of the TTO Structure and Function

Tech Transfer Offices (TTOs) range greatly in terms of size, complexity, history and experience. In many PSRIs with a history of IP management and Tech Transfer, the TTO has evolved into an independent unit. In other institutions, typically those with less experience and history with the concept, there is no separate TTO – these functions are within a department that has other responsibilities.

For example, IP management/Tech Transfer is sometimes managed by the institution’s contracts office. However, any unit that manages IP/Tech Transfer for an institution must have certain elements. These elements include the capabilities to:

• receive and manage invention disclosures
• assess inventions and to make strategic decisions about their viability
• manage appropriate IP protection mechanisms
• negotiate appropriate IP license contracts
• monitor contracts and proactive policing of Licensee’s financial obligations
• manage the document exchanges that accompany all these activities.

Institutions vary greatly in how they implement these capabilities. Advanced and larger offices often have considerable specialization, while smaller operations with fewer staff are more multi-skilled and multi-functional.

4.2.2 Operating Models

There are several objectives your institution can establish for the TTO:

• Faculty service: Support the creative and entrepreneurial aspirations of faculty, graduate students and undergraduates
• Revenue maximization: Generate the maximum amount of license income
• Knowledge transfer: Licensing, sponsored research, faculty consulting
• Economic development: Maximize regional/national job creation/retention
• Societal benefit: Meet the needs of society that market forces will not meet

In a perfect world, the institution will have determined their objectives before establishing the TTO. However, it is likely that management hasn’t thought this through in depth and the TTO must determine this with the institution as they go. Additionally, different parts of the institution will have different views and expectations. The view of the Chief Financial Officer (CFO) is likely to be different from that of the Vice President for Research, whose view is likely to in turn be different from that of an individual professor. And while noble goals of disseminating science and benefitting society may be prioritized for 364 days out of the year, views may differ on budget day!

Any choice on the top objective will have organizational implications. Leadership may say “Yes” to all the listed objectives above, which is impossible, as some are completely incompatible.

4.2.3 Budgeting the TTO: Staff, IP, Business Development, Outreach

A TTO budget should be based on the level of invention activity generated by the PSRI personnel. Obviously, a large institution can be expected to generate a larger volume of inventions than a smaller institution. A typical rule is to expect one invention disclosure per year for each US$2 million of research expenditures. Another rule is that a TTP should not have more than 24 new invention disclosures per year to evaluate and manage. From these simple rules, one can project how many TTP staff are needed for effective IP management and Tech Transfer. This number will then be multiplied by the salary and benefits level appropriate for professional staff at the institution.

Any successful TTO requires a director or manager. In very small TTOs, the director will also be the TTP—responsible for TTO management as well as case management. As TTOs grow, the director’s caseload must naturally decrease as the executive responsibilities increase. Once the professional staff requirement is determined, administrative (admin) support staff can be projected. Ideally, each TTP and director would have one support admin staff. As TTOs grow in volume of activity, staff functions also grow so that positions for IP management, tech marketing, and contract monitoring evolve. These staff positions and their number should be based on the throughput of invention/IP/licensing activity.

Typically, growth of activity is almost always just ahead of budgeted staff, causing constant lack of sufficient personnel resources. After personnel budget issues, the next most critical TTO budget item is IP expense. This budgetary figure should be based on the historical, current, and projected number of invention disclosures received by the TTO. In advanced offices, the IP budget typically equals the operating expenses. The TTO can and will (given good management practices) become a net positive revenue generator. But for this to happen, the budget should include business development (for tech marketing) as well as external and internal marketing. These investments will pay off in increased licensing (and revenue generation) and increased quantity and quality of invention disclosures. 

4.2.4 Staff: Roles, Qualifications, Recruitment, Retention

There are three distinct staff functions that are essential for a sustainably successful TTO:  professional, administrative, and managerial. The TTP is the heart of the operation. These individuals are uniquely skilled in technical knowledge, IP, business, product development, markets and marketing, quantitative analysis, negotiation, and contracts. The successful TTP also has people skills and a unique mindset. PSRIs are almost never able to pay the TTP a salary that is equivalent to what they could earn in the private sector. So, finding and retaining qualified TTPs is a challenge.

There is no certain formula for what TTP qualifications look like—however, experience as a TTP is probably the best indicator. Some TTPs come from technical backgrounds, others from business or law. The key is attitude and mindset. While a TTP must exhibit appreciation and awareness of technology, understanding and familiarity with IP, and good interpersonal and negotiation skills, the one skill that may be most valuable is a business development mindset and approach. Most importantly, TTPs must have a positive attitude, and be a resilient and flexible thinker. Retaining such individuals requires sufficient compensation but also a work environment that supports such intelligent and creative people.

Administrative staff are easier to find and retain since the TTO administrative functions are similar to other departments. Certain admin expertise is specialized, particularly in the IP management area, so people with this expertise are particularly valuable. Because the TTO has an unusual level of interaction with the private business sector, admin staff with a “customer service” attitude and experience are highly desirable. This is also true of the TTP.

4.2.5 Database Management Systems, Other Digital Tools

TTOs are information-heavy, with a constant flow of documents going in and out, including invention disclosures and their related documents, IP documents to and from patent offices and law firms, and contracts being negotiated and signed. In small or less-established offices, this information can be managed via simple lists, spreadsheets and filing systems.

These organization tactics are not sufficient for a high-throughput TTO. Thus, the challenge is to find and implement database management systems and other tools that are suitable for the size of the TTO, and cost-effective for current and projected levels of activity. A particular challenge is integrating the different types of information connected to the IP management/Tech Transfer function. Databases for digitizing the management of invention disclosures, and IP management software are both plentiful. Similarly, contract management and account receivable software packages are readily available. The challenge for the TTO is to integrate all these different information domains. One solution is to use unique numbers associated with an invention disclosure that is then linked to all related documents in the several domains (technical, legal, marketing, contract, etc.). 

Some of the specialized TTO management systems used by many TTOs are: Inteum, Wellspring and KSS TechTracs