The annual meeting for the Association of University Technology Managers (AUTM) kicks off today at the Manchester Grand Hyatt in San Diego, California. The meeting will run through Wednesday, February 17, 2016.
Among the many great programs and festivities that will take place this year at the annual meeting, one important annual right of passage ritual will take place as well. The current AUTM President, Fred Reinhart, will relinquish his Office and pass the mantel onto the President-Elect, David Winwood.
I’ve had the opportunity to go on the record with several past AUTM Presidents (see here and here) to discuss a variety of issues. This year when Fred agreed to an interview I decided to turn this into something of an exit interview. What follows below is part 1 of that exit interview with the soon to be Immediate Past AUTM President Fred Reinhart, who in addition to his responsibilities with AUTM is a Senior Advisor in the Technology Transfer Office (TTO) at the University of Massachusetts Amherst.
During Reinhart’s year as President much changed at AUTM. There was a concerted effort to transition to a a strategic board of directors that would result in more dynamic member engagement, AUTM hired a full-time Executive Director, the organization spent a great deal of time developing more effective relationships with industry, AUTM bolstered it’s relationships with key university organizations, and AUTM began more earnestly working on international initiatives. While more progress was made in some areas than in others, progress has been achieved across the board. All-in-all, Reinhart’s tenure at the helm of AUTM was quite successful and he has helped set the organization up for the challenges that lie ahead.
Without further ado, here is part 1 of my interview with Fred Reinhart. We jump right into our discussion talking about those challenges that lie ahead — namely the ever present calls to repeal Bayh-Dole.
QUINN: Thanks, Fred, for taking the time to chat with me today. I have a lot of ground I’d like to try and cover, so perhaps I’ll just jump right in if that’s alright. It strikes me that one of the key things AUTM has to do year in and year out is fight what I would call just this constant drum beat of call to reform what really has been a golden goose for the last 35 years now. We just celebrated the 35th anniversary of Bayh-Dole which created all of this technology transfer to begin with and yet despite all of the remarkable, tremendous successes, I don’t know that, at least during my career, there’s been a louder drum beat to try and do away with it or cut it back. While the forces of reform haven’t been as successful on the Bayh-Dole front, they certainly have been successful on the patent front on the generic level.
REINHART: Yes, and I think that a continued concern for us, is the – there are people around the country that attempt to make an industry of criticizing AUTM and the technology transfer structure we work within. These criticisms are wildly uninformed and really inconsistent. So, there’s criticism of the patent system to start with, which is, if you ask them, holding back human progress. There’s criticism of technology transfer offices and how they operate and what their goals are. But these charges are being made without any evidence or data to back them upIt can be frustrating because AUTM long ago started collecting data to be able to back up what we say about our successes and performance and when you have last year almost 6,900 agreements completed, option and — license and option agreements, you know, that says something and you have other metrics that just look tremendous in terms of new product introductions by our licensees, new startups, those are factual. So, one example again is patents and universities seeing patents as the road to riches. Now that WARF and Carnegie Mellon have won lawsuits that resulted in multi-million dollar damages, I get a call from a media reporter in California just the week after the WARF-Apple ruling and the question was, “Well, now that WARF has made all this money I suppose a lot of universities are going to jump into this litigation game.” And it’s such an absurd statement because nothing could be further from the truth.
QUINN: Well, explain that. Because I know that to be true, you know that to be true, but why is that?
REINHART: Well, there are several reasons. First, there seems to be a sense that universities have an incentive to litigate. Why do we file patent applications? We don’t file patent applications to get rich. We don’t file patent applications for any reason other than our licensees want something — they want an asset, they want, you know, a protected time period to justify the investment they’re going to make in creating a product or a service. So we only file patent applications because of the market — there’s a market out there for them. We don’t like litigation. There’s nothing great about it. We‘re not set up to engage in it. It’s expensive. It’s time-consuming, distracting and it doesn’t look good for anybody to be involved with litigation and I guess the key point is that when a university has a patent — what it most wants to do is not litigate but to license that patent and transfer the rights to a commercial entity that will use that technology and develop it. So, our first goal is to license, not litigate. Secondly, we — why would you bite the hand that feeds you? If a university has a reputation that is litigious, that university’s partners are companies, they hire our graduates, they sponsor research, they donate and endow chairs of research. We just don’t want to get into fights with these companies so litigation is really a last resort and even getting the permission to litigate is a huge deal at all universities. So it is not that common and people who say it is are not correct– they’re massaging the numbers to make a false case.
QUINN: Right. And the other interesting thing about universities is a university is not going to litigate to try and get somebody to stop doing what they’re doing. A university is going to litigate to try and get a license to get paid a royalty to put that money back into the research and development and high level teaching that goes on in the laboratories. So it’s a very different kind of a situation. A university doesn’t want to stop you from doing what you’re doing. A university wants you to do what you’re doing. And the fundamental thing that I think most people miss is universities are not geared to do commercialization research and that’s why these university/private company partnerships are so critically important and when you hear these people say oh, well, we paid for that research. You created that drug, we paid for that drug already. No, you didn’t. You paid for the very basic science that proved that it could possibly work on an extremely small scale, likely in a mouse or something like that, maybe not even in a mouse. You might not even have gotten that far before you pulled in the private companies and engaged in the partnerships. And I just think the criticism is born out of what I would call a fundamental ignorance and I don’t know how you can break through that fog because the information is out there, the facts are out there, and the critics continue to seem to turn a blind eye to reality.
REINHART: Yeah, absolutely true. If we were selling products and somebody else was selling a similar product and infringed a patent we had, well, yeah, then we’re a company but we’re not like that.
QUINN: Yeah. It always just surprises me. The other thing that surprises me, too, and I’m sure you’ve heard this and since you brought up WARF, I mean, they’re one of the most successful entities in the technology transfer space and they win this verdict against Apple. I would say whenever a university sues somebody the university gets forced into litigation. The university does not want to litigate. That was thrust upon them because there was no deal that could be made and universities have obligations to the other people that have licensed these technologies in good faith just like any licensor would so this litigation is thrust on them, Apple loses, Apple loses big and then all of a sudden WARF is a patent troll? That’s just comical. I mean, when you hear WARF is a patent troll and you read that in these nationally recognized, supposedly mainstream business publications, what do you think?
REINHART: Yes, I think we need to keep trying to educate people because it’s so far from the truth it’s just — it’s almost dishonest.
QUINN: Yes. It is frustrating. So your time here as president is about to end. When it does wind up, is the frustration for you over or are you just going to wear a different hat and get frustrated in different ways? And maybe a different way to ask this is how much more involved with AUTM are you going to stay? I suppose you’re going to go back and be much more involved in your normal day to day job?
REINHART: Well —
QUINN: And, actually, before you even answer that let me explain why I’m asking the question that way. I have some experience with law firms and attorneys taking on these roles as president or an industry organization and it’s not just an individual taking the role, it really has to be an institution or a firm that gives tremendous support. So I’m just guessing that your institution has been behind you and has realized that you have these other responsibilities that are very important for the entire industry for a year and they’ve been very understanding, but they’re going to want you back full time, 100% of your attention at some point here, right?
REINHART: Yeah, and I have to say the University of Massachusetts Amherst has been incredibly supportive about this. They must recognize that they’re paying me for work that I’m really doing for AUTM on many days and yet, you know, they’re looking at the big picture and they recognize that AUTM is helping all universities in the US and around the world to accomplish things that are going to be beneficial to the society in so many different ways. So, it’s been a really stimulating year. There areso many moving parts right now. I’ve always loved this profession because it’s so complicated and it’s fun to sort it out. I mean, it’s a profession for people that actually are energized by that and so it’s been a really stimulating year. It’s been a great growth experience. I think that I would be like most of the previous AUTM presidents after you’re done. You’re just not going to quit helping out. I think the nice thing about AUTM is that what you’ll see sometimes is a Vice President for Communications or Finance or whatever, when they step down they go back on the committee and they become part of the corporate memory that is so helpful to the new leadership of that particular group. So I will continue to do things with AUTM. And there may be some areas where I feel like I can make a more substantial contribution just because everybody has their strengths and skills and I will decide where I can make the most impact and whether it’s helping out — I really am interested in the public policy advocacy space. Also, I love the professional development training that AUTM does. I like going to other countries and giving very basic talks to people. One of the things AUTM does is help train policymakers in other countries because they’re really looking for guidance on how they can set up practical policies but you have to go over there and look at what they are dealing with, what is their ecosystem like and you don’t just try to impose the US model on them; you try to help them figure out something that’s going to work.
QUINN: But don’t you find it interesting that at a time that we in the US or at least some, are discussing whether we want to really have this Bayh-Dole system and on a broader level, whether we want to have software or genes or medical diagnostics even be patent-eligible, that the rest of the world is so interested in learning what we have done to become so dominant in the innovation space that they’re trying to learn from our past so they can adopt the best practices that we seem interested in throwing away?
REINHART: It’s absolutely true. I was at a AIPLA meeting and somebody said, gee, what’s going to become of our diagnostics industry after the Mayo and Myriad rulings? And yet so many other developed countries are not taking this approach, they’re going to be able to have an industry that is based on intellectual property to support investments. And, yeah — if I can just comment on one thing that I feel is going to be an issue that David Winwood (AUTM’s President-elect) will be facing and that is there seems to be an unresolved question of how new drugs are developed or should be developed and there’s so much misinformation floating around about that, that patents are what’s causing high drug prices. And when universities get dragged into that we’re uncomfortable because we have nothing to do with that. We give a company the basic foundation to build on and we get a royalty if a product succeeds but, you know, bio and pharma will rightly tell you that pharmaceutical and biologics are not what’s contributing to the high costs of our medical system.
The other thing that we’re hearing is that — and this is incredible to me — that university patents are standing in the way of improving global health in poorer countries, which is so uninformed because we don’t file patent applications in developing countries very often. We actually have a principle that we’ve endorsed at both universities and AUTM and we have a whole toolkit of licensing terms that address global health and our principle is to not stand in the way of that or collect royalties on sales in developing countries. And then we still get people saying that patents are hindering the free exchange of scientific information, which has been disproven over and over. Or they say that patents are simply a tax that people are forced to pay. I doubt if 6,900 agreements would have been concluded last year if patents were just a tax. The latest thing from Brookings, which I really feel is terribly uninformed, is that patents are just a defense – that the main reason people license patents is because they’re a defense against infringement. They claim that is the only reason.
QUINN: Well, that’s pretty ignorant. I mean, that’s the only way to say it. That’s just somebody who’s not paying attention to the market at the moment, right? How else could you say that, right? Because everybody is complaining about patent trolls and having a patent license doesn’t defend you against the patent troll. That’s just the craziest thing I think I’ve ever heard.
REINHART: It is.
QUINN: But that’s the type of analysis that’s out there that passes as thoughtful.
REINHART: And even if you wanted to play devil’s advocate and say okay, so patents are a defense against litigation, well, some companies would say that’s a legitimate business strategy and so, therefore, patents and licenses have value.