Recently in celebration of the 20th anniversary of the enactment of the Technology Transfer Promotion Law the Science and Technology Policy Institute (STEPI) held a forum to check how well patents resulting from government R&D projects are transferred to the private sector. Summarizing the inspection results in a word the size of technology transfer has increased but it is nominal. There are a lot of reasons why technology transfer is frothy. The forum pointed out that the public technology has low business value and the lack of capabilities of companies that receive and use public technology. In addition the poor technology brokerage company and trading market also played a role. The claim makes sufficient empathy.

The Origin of the Technology Transfer Promotion Law Began in the US in the 1980s

With that said lets look back at the origins of the Technology Transfer Promotion Law. The Technology Transfer Promotion Law benchmarked the “Bayh-Dole Act” named after two US lawmakers Bayh and Dole in 1980. Prior to the enactment of this law it adhered to the policy of allowing anyone to apply and use for patents arising from the results of research by the US government. It was a patent from government tax so anyone could use it freely.

However ironically even though anyone could use it for free there was a phenomenon that no one used it. This phenomenon continued for several decades and then the society of university suggested a solution in the late 70s. If the ownership of patent was handed over to a university the university would actively transfer the patent right to the private sector. This idea was groundbreaking beyond conventional wisdom. In the past decades government patents have been free that is public goods but the claim to make them private has been so shocking that Congress has not been easily accepted. After repeated debate the Congress finally accepted the opinions of universities and others and enacted the Bayh-Dole Act.

When the new act was introduced Stanford University and MIT began investing in technology transfer. From this time on the number of start-ups of universities increased and the phenomenon of clustering of corporate research institutes around universities began to increase markedly. The Economist a British economic magazine celebrated the 20th anniversary of the Bayh-Dole Act in 2002 and evaluated it as the golden goose of innovation.

A representative company born out of this law is Google. Googles founder Larry Page patented a page link while participating in a research project of federal government and Stanford University owned the patent. When Larry Page a young man in his early twenties started his business Stanford University transferred patented technology to him. Since then Page received the investment as we know  and succeeded in commercializing the technology and the Google bacame the one we know today.


In the United States and Japan Universities and Research Institutes Operate Autonomously

When the US enacted the Bayh-Dole Act only the basic policy for technology transfer was presented and the rest was left to the universitys autonomy. For example there are two main ways for universities to transfer patent rights to companies. One is a non-exclusive license which allows several companies to use patents. The other is an exclusive license allowing only one company to use the patent. Stanford University has the autonomy to choose between a non-exclusive license and an exclusive license.

In general exclusive licenses are given to small and medium-sized venture companies and non-exclusive licenses are given to large companies. When a patent generates revenue the university decides how much to allocate to whom. American universities allocate appropriately to inventors departments to which the inventors belong and to university headquarters and technology licensing organizations and the ratio varies from university to university. The reason of this is to create a virtuous cycle of research by reinvesting patent revenues for research expenses and technology transfer.

In Japan similar to the United States research institutes such as universities etc approach technology transfer with autonomy. In recent years technology based startups in the University of Tokyo has increased. Major foreign media call the Hongo area the street around Tokyo University as Japans Silicon Valley so the technology transfer system has been established now.

Meanwhile our university and public research institutes follow the rules set by the sub-enforcement ordinance such as the Technology Transfer Promotion Law the Framework Act on Science and Technology and the Industry-Academic Cooperation Promotion Law. At first glance there may be opinions that it is good to follow unified rules. However the opinions of companies are different.

Sugentechs CEO Son Mi-jin who announced at the forum said It is difficult to obtain an exclusive license when transferring public technology and a non-exclusive license is recommended. It is often meaningless unless it is an exclusive license. And she said It is necessary to do not restrict the license but to empower the negotiating entity so that the transaction is carried out according to the market logic.” As CEO Son mentioned unified rules have a flaw in not reflecting the complex demands and phenomena of supply and demand in the technology market such as the characteristics of the industry the size of the company and the capacity of the negotiator.

Reviewing System is Necessary in the Direction of Giving Autonomy in Technology Transfer to Universities etc.

When the technology transfer system was introduced 20 years ago the public domain had low awareness of patents and technology transfer and the government had to lead it. But now it is different from then. Patents held by public institutions 20 years ago accounted for only a small portion of the total patents but now they are in the range of 20%.

Now rather than the government deciding on the selection of non-exclusive licenses and exclusive licenses compensation and distribution of job inventions etc research institutes should have autonomy and approach appropriately to the market. Recently Korean industry is taking steps to keep up with the era of the 4th industrial revolution such as artificial intelligence. In addition it is said that in the next year the government R&D expenditure will exceed 27 trillion won. Now is the right time to check the technology transfer system again to keep in tune with the times.


Director Jeong Seongchang

-Columnist

-Institute of Intellectual Property and Innovation Ecosystem

-Research on corporate innovation strategy intellectual propertys ecosystem innovation of industry and technology spirit of institution and enterprise research on patent system

-Leading the independence of Korean intellectual property

 

•Technical examination (33rd) worked 21 years as a vice-director of the Korean Intellectual Property Office etc.

•A patent administrator of Embassy of Japan(councilor)

•Visiting professor of University of Science&Technology(current)

•National Intellectual Property Committee KIPnet IP a subcommittee of creations specialist(current)

 

•Graduated from Ajou University Department of Control & Measurement Engineering (Bachelor of Engineering)

•Graduated from Seoul National University Faculty of Economics (Business Economics course)

•Masters course at the Faculty of Law Hokkaido University Japan

 

•Intellectual Property War-Koreas Patent Competitiveness and Response Strategy (2005)

•LED Industry and Patent Dispute-Focused on the pursuit of latecomers (2011)

•A study on the direction of industrial policy in the knowledge-based economy through the analysis of the global patent strategy of the United States (2000 co-author)

•Knowledge and Information Revolution and New Industry in Korea (2001 Seoul National University Lee Geun etc.)

•Analyze the innovation structure of Korea and Taiwan using patent statistics (author)

•Economics of pursuit between companies (2008 Seoul National University Lee Geun etc.)

•Analysis of the innovation structure of POSCO and New Nippon Steel Corporation using knowledge creation theory etc.)

