By: Norton Kaplan, Foresight President & COO
I attended the FLC National Meeting this year which was hosted in Chicago. While there, I was engaged in an interesting conversation concerning the shrinking budgets of some of the Government Labs and the effect it has on technology licensing. The conversation included a Government Lab Manager, a Government Lab Technology Transfer Manager, an industry based Technology Transitioning Director, and me. The conversation began with the importance of providing technical support and guidance to the prospective licensee for the technology that is to be the subject of the licensing agreement. Everyone agrees that without this technical support for an immature lab technology the likelihood of a licensing agreement greatly decreases. The Lab Manager has used the goodwill of the innovators and inventors to support this effort. BUT those that manage the funding of the labs have put a stop to this practice as it is not included in the budgeted activities of the lab. This particular agency is not allowed to offer reimbursable services to the private sector so charging for these support services is not considered. The TT Manager also does not have discretionary funds for this important support function. A partial answer comes from the industry based Technology Transitioning Director. Their business model is to license promising technologies from the lab, hire the lab PI, raise VC and angel funding and then create a spinout company. The technical and commercial risks are not fully mitigated in this model although it is a step in the right direction. With the unmitigated risks the outside funding is often difficult to raise and at times costs the spinout company a substantial portion of the ownership stake making it less desirable for the PI to participate. The Foresight “spinup” model addresses the technical risk aspect by utilizing government funding sources (i.e. SBIR) to mature the technology before out licensing the technology to an industry participant. This makes it more viable and attractive from a business perspective with less risk. This model provides a pathway for the Government Technology to enter the private sector, provides a career alternative for the lab PI, supports the research and commercialization objectives of Government and other funding organization, and adds to the growth of the economy. Win, Win, Win!