Q&A With Linden Rhoads: UW TechTransfer Leader Brings VC Revolution to Campus (Part 2)

2/11/09Follow @xconomy

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a really prolific researcher, churning out incredibly important work. Ed Lazowska’s efforts in the area of what he calls e-science, I think of it as computationally intensive science, are part of what will make this university over the next dozen years a very productive place in terms of relevant innovation. When you think of David Baker and what he’s doing with protein folding, and distributed science. I call it democratic science, with a little “d,” that will enable us to harness all of our efforts. That’s the type of project we want to see more of.

Then there are so many projects within the School of Medicine, too numerous to name, that could significantly impact the health of Americans and Washingtonians. I’m really impressed with the work that Jim Stout is doing with respect to asthma and pediatric anesthesia. We have a pair of researchers working on an oral form of testosterone, which today can only be injected or applied topically. There’s a lot of good work being done.

X: What are your goals for 2009 and beyond?

LR: My goals for now are to put the right people in place, and some of the right programs in place, so we can mature into a world-class commercialization organization and a reason why researchers come here.

X: Do the venture capitalists embrace this?

LR: They’re really excited. I’ve made some changes on the licensing front that demonstrate good faith. Their participation and assistance will be rewarded with responsiveness and real-world flexibility.

I’ll give an example. Many tech transfer offices have a bright line rule that says they won’t prospectively license anything, won’t forward-license. What that means to them is even in a case when a UW researcher is starting a company around their research, in which they will continue to do similar research here at the university with their grad students, we tend to say to the VCs, here’s the deal: The company, of which the researcher is a part, can license the technology up to the point it exists today. But anything they do going forward here, we could never, heaven forbid, prospectively license that. So you’ll have to come back and license it at another time and place when it is disclosed and understood.

Of course, this doesn’t give a lot of comfort to any venture capitalist or investor or corporate licensee, who is thinking about stepping up to the plate and investing millions of dollars into development of a technology or therapy. Then we attempt to talk them out of a heart attack, saying ‘Don’t worry, we’ll let you be the first in line to negotiate for that, or ‘We’ll do it in good faith.’ We also create the potential for a researcher to be in a difficult position. Think about it, the researcher now has helped start a company, and chances are he’s a scientific advisor. He’s allowed to give 20 percent of his time to the company, maybe a day each week, so the company hires 20 biologists to work on things, it’s hard to say when the researcher is going back and forth to the lab, it’s really hard to say where the intellectual property originated. It could have been here at the university, or it could have been at the startup. There’s a revolving door.

So by saying we won’t forward-license anything, and insisting we negotiate a new license, we create a difficult position for the researcher. We create consternation for the company by saying they will have to prove somehow that the innovation didn’t come out of the university. So I think it’s very reasonable to eliminate that entire line of inquiry, and not worry about which side of the revolving door it came from, by licensing a project versus a discrete patent application. I think it’s completely fair and appropriate to say ‘You know what, we’re licensing this project. We can come up with some reasonable outer bounds, maybe a period of years, or everything discovered under a certain research grant, up to this set of possible research outcomes, and all of it is in the license.”’ So we don’t actually care at this point, because it’s licensed to you anyway, whether it comes from the university or the company. The researcher is encouraged to be as helpful to you as an investor as they possibly can be, because we have licensed this technology to the company. The university has a tremendous vested interest in it being successful. The last thing we want to do is cause stress or anxiety. That’s a position that VCs and attorneys in the area have let me know they are thrilled to hear.

X: Do any other universities do this?

LR: I really couldn’t say. I think for the most part, no. Universities are generally really hard to work with.

X: So are people in the Bay Area starting to pay more notice to what’s going on here? Will you attract a more broad diversity of Silicon Valley VCs here?

LR: Definitely. Janis and I are phoning them and setting up meetings there and here. We see a lot more attention. And you’re not just seeing Bay Area VCs, but Boston VCs and New York VCs, and frankly, we’re also looking outside the country.

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