Speaker 1 0:09 Young, hello and welcome to today's autumn webinar. 2025 predictions for tech transfer and IP. My name is donbio Young. I'm a member of Autumn's educate team and today's staff host, All lines have been muted to ensure a high quality audio and today's session is being recorded. If you have a question for the presenters, we encourage you to use the Q and A feature on your zoom toolbar. Should you need closed captioning during today's session, the Zoom live transcript feature is turned on and available on your toolbar. Before we begin, I would like to acknowledge and thank autm online professional development sponsor, Marshall Gerstein, we appreciate your ongoing support, and now I would like to introduce today's session MODERATOR Justin Marco, hello Speaker 2 0:57 everybody. Welcome to our autumn webinar. We will discuss predictions for tech transfer and IP in 2025 Glad to have you all here today. I'm Justin rurkow. I'm the Vice President of Strategy for trade space and IP development and management platform. We have an exciting webinar planned for you today. We have some great materials, thoughtful insights, and a few good personalities as well, that I hope you enjoy. Before we dive in, we have a few housekeeping items. The first is, is that the webinar is being recorded. Everyone will receive the recording afterwards, and it will also be posted in autumns learning management system. Second we have designated last 10 minutes for audience questions. Please use the Q and A box on your zoom console to submit questions. We'll do our best to resolve questions as we can where it makes sense. We'll interrupt the call and try to address your question live, or we might hold it till the end, but either way, we'll do our best to get to it, either now or we'll follow up directly. And now to turn to our panelists. Introduce them. I am excited to introduce first Mary able to Albertson, sorry, Mary. Mary is the Director of Office of Technology licensing at Georgia Tech. In this role, she leads the office in protecting and commercializing technology resulting from the University's $1.4 billion of research expenditures. Previously, Mary served as Senior Director of commercialization at pivot, a University of Utah office, and she was also Associate Director at Stanford, where she worked for more than two decades, supporting research commercialization. Sure she feels especially at home today as a prior autumn President. Welcome Mary. Next, I'd like to introduce Myron casaraba. He is vice president at Mass ventures, where he leads technology transfer and investments in academic spin outs. Myron's career and tech transfer began at MIT's licensing office, and most recently he was director of commercialization at Northeastern University. He serves on both autumns public policy advisory and licensing survey committees. Hello, Myron. Next up is my pleasure. Slow on them. Thanks, Myron. Next, it's my pleasure to introduce Daniel Pendergast. Daniel is the Executive Director of Technology Transfer Office at case, Western University, which happens to be my alma mater. He's responsible for setting the strategy for investment in IP generated from university research. He and his team form relationships with industry partners and create new ventures to commercialize these technologies. Daniel has built his career at Case Western and over the last 20 years, he saw the variety of licensing and operations roles in the office managed technology portfolios that include imaging, medical devices and software. Welcome Daniel. Thank you. And last but not least, Michael poisal, the Executive Director of PCI ventures at the University of Pennsylvania, where they help faculty researchers create and build companies around their technologies. He and his team provide incubation services at Penn's incubator, and as part of these programs, he has participated in the founding of more than 275 companies, which have gone on to raise over 900 million in funding before Penn Michael made investments for new spring capital, Apex partners and GE Capital. Thanks for being here, Michael. And as you see, we have a great panel for you today, folks with a lot of different perspectives, and I really hope you find their their insights useful. And for the conversation today, we have three main sections. The first section is, look back at 2024 talk about some of the key events and learnings from the year. We'll look forward to 2025 and share some predictions and thoughts about what we think are going to be important. And we'll end with the Q and A session. But again, please feel free to interrupt us and share your conversation, your questions as they arise. So now part 120, 24 a year in review. This was a big year with many developments in tech transfer and IP. We'd like to discuss several key things, starting with increasingly complicated grants and contracts. Daniel, I believe you had a couple of good examples this year of dealing with newer types of agreements, like OTAs. Yes, perhaps you could talk about your experience with that for the audience, Speaker 3 5:04 sure. So an OTAs and other transaction agreement, it's not a grant or a contract, it's a form of agreement used by agencies when they have special terms and conditions they'd like to include to meet a specific mandate and they need authorization in order to enter into or be allowed to enter into an OTA case question, was fortunate to be one of the sites selected by ARPA H for a large collaborative award. In that award did use an OTA. The interesting thing about that for us is that the ARPA H team, this was part of the Nitro project to develop a replacement for artificial knees. So this is a living joint. What was interesting is that the team required that we move very quickly to have essentially all of the legal framework in place within the first month of the award being made across a network of 11 different partners, including companies and universities. That was no small feat to kind of get agreements to not only the prime award terms there, but kind of our unique IP framework that we had to build for that, one of the terms that you would never see in a grant or in a contract had to do with a very controversial topic. If you're a member of the Bayh Dole coalition, certainly you see a lot of op eds about this having to do with price controls. So the Nitro program requires that any product that comes out of this award work be made available to the public at 25% or less in the current market solution not 125% but 25% or less. So that's going to create a very interesting challenge for us as we move forward in structuring the IP contributions from all of our partner organizations, folding those into a new startup company and trying to meet this price mandate imposed by the agency, new ground that I certainly had never encountered before and and, you know, It's something that I think a lot of tech transfer offices are starting to see for the first time. I don't know if anyone else from the panel has experience with OTAs or or interesting provisions like this. Speaker 2 7:36 Yeah, Daniel, thank you for sharing that. It is interesting seeing the other panelists not having a lot of experience with this as well. Certainly an emerging certainly an emerging area, and that point about price controls, will imagine create some challenges for you, for certain that the OTA is, I think, is a really good example of emerging challenges, and Myron and Mary, perhaps you could also speak about non OTA based grand challenges that you're seeing in your day to day lives. Speaker 4 8:04 Some of our things are not new. It just seems they're more frequent, which is actually with foundations, their whole issue with getting a share of the royalties and how you account for that, they're all over the place. Like I said, this isn't new, but university groups have been trying to solve this, just from a compliance standpoint, and then there are things like the Gates Foundation that has certain provisions that, from a business perspective, are very difficult for companies to accept. We've done a couple licenses this last year for gates funded work. And it was a challenge. Speaker 2 8:50 Could you maybe comment, I'm sorry, Mary, that was an interesting. Point you made is not to cut you off, Myron, but what are some of those, whether it's gates or anybody anonymously, what are some of those difficult provisions that you're seeing, and maybe some examples of how you are able to navigate that with your licensees? Well, Speaker 4 9:08 just from the get go, before you know, you're even dealing with the terms of the licensee, some of these grants require, as I mentioned, some royalty sharing and their overhead, you know, they're negotiating much more favorable terms than our standard, like 10% or something, and they have huge challenges in compliance, because they'll say, Well, we want 25% of whatever, you know, the portion of the effort that was funded by this foundation. You know, faculty don't PIs don't necessarily have an easy way to track that. I mean, there are accounting issues. But as you know, things get mixed and mingled, and so just from a logistical standpoint, that's a mess we've tried negotiating. And even back when I was back in. Standard Stanford, there was a big coalition of universities. We pulled together to say, hey, foundations, you know, at least be consistent. And obviously that didn't work. Some of the things that gates requires has to do with making the technology available in developing countries. And so there are certain requirements in there that say, you know, you have to have X number of units, or X percent of the units that you are selling. Have to go to this long list of countries. Well, a lot of times the companies need to build out their regular, regularly priced products in order to be able to afford to get the price down, to be able to send it to, you know, other countries who aren't going to pay. So we negotiated two of those licenses this year. One super difficult, because it just didn't work out. AND gates just has these requirements, and it becomes a question of who's negotiating the deal, right? Speaker 2 11:03 And you mentioned that from a compliance perspective, were you referring to if we receive money from one foundation, it's it might be difficult for the PIs to track their research associated with that funding and not commingle that with all their other activities, and Speaker 4 11:18 especially from the perspective that they may be different inventions from that funding. You know, we use $7 million but really, this particular even, we didn't commingle it, but this particular invention was born of only 20% of that 7 million. That's very difficult to track. I mean, from a bookkeeping if they're coming, they're supposed to, you know, code things properly, but a half a person, people coming in and out of the project. So, yeah, Speaker 2 11:49 yeah, I can imagine that's an entire topic for a webinar alone there. But thank you for sharing no Unknown Speaker 11:53 that that would drive me. Well, Speaker 2 11:57 fair point, Myron, finally, I'll give you a chance to talk. Sorry for cutting you off. Oh, no Speaker 5 12:01 worries. No worries. So I just wanted to bring up, you know, one of the things that's been discussed for the last couple of years is a lot of the new NSF funding programs have industry collaborators that are part of those programs, and a lot of those programs also were mandating that every collaborator receive a commercial, non exclusive royalty free license to the intellectual property, which many of us kind of raised our hand and said, you know that that's a huge limit on both spin out potential and on licensing activity, because if 12 companies that are in you know, the telecom business all have access to to this intellectual property. It really, you know, decreases the potential value. So there's been a bunch of discussions with the tip Directorate. And timely, I'll put it in the chat, they have made a few new proposals on how to deal with that, not sure that, you know, putting in rights of first refusal and other types of things is the right way to go, but encourage everybody to take a look at these and and make comments. Because I think at least the recognition is that, you know, taking taking money from NSF should be a good thing, but should also be something that, you know, we'll talk about later, stimulates licensing and spin out activity. And to date, a lot of these funding programs have actually had the opposite effect, which is it just limits it, right? Speaker 2 13:38 And to be clear, you just shared a link to the the request for comment, right? And so that's something that's good for the audience to take note of. This is a chance to have your your opinion be heard. So encourage you to take a look at that link. Justin Speaker 3 13:53 one, one comment off of that is, you know, in addition to NSF, of course, DOE, a couple years ago, started implementing their enhanced manufacturing requirements, and we participated in a GAO survey on the likelihood of enforcement of these provisions to chill patenting of DOE funded technologies. And just basically, you know, is this going to make it so difficult to commercialize that tech transfer offices won't even bother the findings of that geoa GAO report. I'll also drop into the chat here for everyone. Speaker 2 14:36 Great. Thank you for that great point. Any other questions before we move on to our points before we move on to our next topic about licensing processes. Thanks Daniel for proposing that. Okay, moving on to our second of third topics in the first half, which is improving and streamlining licensing processes and. Yeah, Myron, if we could turn to you first to set the stage and discuss, Speaker 5 15:05 sure. So in my new role at Mass ventures, I've been spending an awful lot of time looking at academic spin outs and sort of the impact on economic development. And we currently our portfolio, I think 28 out of our 35 investments are to academic spin outs, and so we spent a lot of time with founders. And not surprisingly, one of the topics that comes up very frequently when talking to spin out founders is the challenges they had in obtaining a license to their intellectual property. And the good news is, I think there have been a number of efforts to sort of discuss this, whether it's equity terms, whether it's work that's been done with the bold terms, with 10 u so I think that there's an increasing awareness that, first of all, there's more transparency. People are publishing their terms more frequently, and so you can be compared, but also the challenges now with the increased volume in SPIN outs, as to whether it's even feasible to do sort of bespoke negotiations and optimization on every deal. So I think that, you know, we're certainly encouraging the institutions in Massachusetts to try to make it as efficient as possible to form and license a company that we hope, you know, establishes themselves in Massachusetts and grows and succeeds. Speaker 2 16:43 Thank you, Myron, it might be useful if the panelists could talk about specific examples of what they're seeing and maybe even what they're doing in their own offices. And Mary, if we might start with you around perhaps your Express licenses, or anything else you'd like to discuss around efficiencies. Speaker 4 16:58 Sure, I started at Georgia Tech two and a half years ago, and about six months into my tenure, I created an express license. It's not new. There are universities out there have been doing it for like 10 years, but we made our terms based on feedback we get from our inventors. You know, entrepreneurial inventors, attorneys, VC, we had everybody vet it, trying to, like, all express licenses address the hurdles. You know, startups don't have money in the beginning, prior to me coming, the feedback was horrible. Terms are all over the place. It takes forever to negotiate. And we wanted to not just have something that was more streamlined, but that actually encouraged startups. So basically, you know, they don't pay us any money upfront. Past patent expenses aren't due till they do a series a 5% equity and 1% earned royalties. Right now, I do not have two different licenses. You know, one for physical science, life science, or one for software. We're tweaking a little as we go. We haven't had much need to adjust this, but I have a little bit even though it's non negotiable. So we are still trying to train some people that non negotiable means non negotiable. The other thing that's open. And I'm curious how the others have dealt with this in their Express licenses. Is how many texts can be included. Sometimes there's three that are very closely related. And what is closely related mean? We started saying it's just one tech, because I think WashU does that. But curious what others do. I Speaker 5 18:44 yeah, I guess I'll add that, you know, I think that the a lot of people are in the venture community are like, Well, why don't you just make it like a safe, which, you know, is a vehicle for doing early stage funding, kind of like a convertible note. And I don't know if that's realistic. I think that, having been at two different institutions and talked to a lot of folks at other institutions, I think each institution needs to deal with their own risk profile, their own office of general counsel, and come up with with terms that are going to work for them and for their technologies. I think the big issue is transparency. That's what we continually hear from people, which is that, you know, this is confusing. It's, you know, something that is can be expensive from a legal perspective, and so increasing velocity, and, you know, trying to make that process more transparent, more efficient, potentially more deterministic. I won't be surprised if Mark Saddam doesn't have a an AI chat bot that will, you know, generate a license and you know for you, but eventually, I think we need to move in that direction. Yeah. Speaker 2 19:59 Yeah, good. Good point. My Mary didn't prepare you for this question, but I wonder if you might just share a few thoughts about how you actually went about getting feedback. So you mentioned that when you're creating this Express license, you got feedback from attorneys and potential other stakeholders in the process. Maybe you might just talk a little bit about that process too. Please. Speaker 4 20:19 Sure. And the reason why we went to those different, you know, sectors of people is everybody's got a slightly different perspective. But we were able to start, I looked, obviously, at Express licenses at other universities, and again, you know, we may have some different priorities, but the financials, what were easy. I could figure out where I wanted to start with Financials, because I was given permission to basically give it away. And I should mention again, depending upon how the different offices are coupled with their venture groups, you know, I told my boss, you know, my metrics are going to suffer for the startup metrics. I don't care. I just want it on the record, but it's more important. So financials easy through very simple terms out there, which are basically the same as we have. I should mention my boss, who's the VP of the Office of Commercialization, raghupathi, Siva Kumar, but he goes by Siva is an entrepreneurial person. He has started three companies. He's faculty, so his input. Then we went to like, VC, are we even close on financials, and are there any other big hurdles? We went to legal to see, from our perspective, we were really trying to cut this license down from 15 pages to five. It's impossible for us, but we tried to get legal input. To do that, we went back to some of the entrepreneurial people, especially some of the faculty who had already taken licenses, and the feedback we got was hallelujah. You know, this is night and day, and the quickest we've done, I've done a deal in one week, when it takes a lot of time, it's usually because their attorney doesn't understand non negotiable is non negotiable, and they red line the heck out of it. So, yeah, that's why we got that. We're still getting input. The first two deals I did, I got some input from the startups and tweaks and little things. Yeah, Speaker 2 22:17 thank you for sharing that. I think it's always good where we can to share very specific information about how we navigate our institutions to get things like that done. We're talking to another organization recently who combined a bunch of offices, and they have some great insights about managing personalities and expectations. And Mary, you made some good comments about being clear about the financial impacts of this to your organization and what it means. So thank you for that. Speaker 5 22:42 Just gonna, I think that, you know, Mary made a really important point, and, you know, we had an express license that when I was at Northeastern, and it is the education, primarily of the legal community, that non negotiable means non negotiable, right, that you're getting a set of terms that are should be favorable, or at least well defined, and that it's not the, you know, it's not a new starting point for a negotiation, and that, you know, there's another lane, which is a fully negotiated license. But that, and I think that needs to be, that education needs to make it out. You know, as more institutions adopt this type of an approach where there is a an express or a pre predefined license that's ready to sign, that it really means ready to sign. Speaker 4 23:33 One more quick thing out there, this thing about streamlining, there's a whole sector that has nothing to do with startups. So I've worked hard to make sure that we are streamlining the non startup process. Don't squeeze every penny out of it. Listen to them. The whole thing of we've always been supposed to look at deals holistically, more here, less here, but I'm trying to make sure my office knows we're not squeezing every penny out. You know, nickel and diming all along the way earn royalties is where you're going to make your money. But that's to streamline. I'm telling my people don't do wacky terms. Stick with this. We have sections that are in blue, that are non negotiable to try and streamline, you know, if it's Georgia State law, if it's USG policy, if it's GT policy, if it's just practice, you know, don't get sidetracked. Speaker 2 24:33 Yeah, that's a great point. I think everything you just shared is interesting. And Myron, your point about education, non negotiable means non negotiable. And, you know, I think it's, I imagine you probably encounter law firms who don't understand that, you know, and that would certainly, as an attorney myself, would surprise me when somebody says, this is non negotiable. It's like that That breaks my brain. I understand that as an attorney, so, but that's the point of, that's the trade off of that approach. And so, yeah, that certainly makes a lot of sense. Okay? You for sharing that there was a question from the audience where it said it would be interesting to learn more about how this has worked out. More of a longitudinal study, if you have 10 years of experience with these How did it work out? What happened to the startups if they were acquired? How did the acquire respond to the terms and any regrets for minimal terms in the license? You know, I imagine you probably don't have 10 years of data on these things, but, you know, do you have any, you know, anything that you might share for that question immediately in terms of of any lessons learned you might have from actually getting companies up and running and what that looks like from the any implications or unintended consequences of the minimal terms as one example, might be too early to have that data, but, Speaker 4 25:44 I mean, for us, it's obviously too early. But I would say on the education side, educating internally, that's what success does, and doesn't look like. Everybody's got different metrics on number of startups, and you know, are they still there two years later? And a lot of that has nothing to do with the terms, but educating them that this thing of equity taking 5% equity, if we get one hit in 100 that's good. Don't come back and ask me to have a big exit on 50% of my deals. Speaker 5 26:16 Right? Yeah, schools like Cornell, who have been using an express license for a while. I think if you if you speak to them, Alice and others that you know, they've had good success, I think we sometimes, from the tech transfer world, put too much emphasis on on the license. You know, at the end of the day, it's something that's required to get to the next step of funding and formation, but you know, there's other factors that are the ones that are going to influence the success of that company, over and above the license? Speaker 2 26:55 Yeah, great and audience, thank you for that question. Please feel free to keep them coming to continue about the streamlining. Daniel, you might share your experience too. I believe you're looking at streamlining, streamlining some of your contracts as well. Perhaps you could share a little bit about your experience, please. Sure. So Speaker 3 27:10 very similar to Mary, you know, we're fighting a reputation of kind of being all over the place and also kind of being out of market with terms. So I convened a stakeholder panel comprised of some of our friendly VCs, some of our entrepreneurial faculty members, our Vice deans for research, basically any stakeholder I could think of. And we took a look at cases most contentious sections of our license, what we always end up spending the most time arguing about and we, we pulled a couple of other templates from peer institutions, and we also looked Myron, mentioned earlier in the call about the US bolt template, which was a collaborative effort between venture capitalists and universities to come up with a workable, investable license. And what we're what we're going to do is we're going to try to edit the bolt as little as possible to create a case custom template that we think we'll be able to say, look, this is, this is built off of something that that everyone kind of agreed would work to begin with, and we're putting our own spins on it. And here's why. So on the education side, we're going to have a companion document where it kind of walks through in layman's terms. Why are these sections here? And what are the pain points for the university? Kind of like Mary's blue blue text, you know? Here's why this is important to us, and sometimes that can go a long way to avoiding one or two rounds of redlining or a conference call. I will say, Mary, when you said trying to go from 15 pages to five is impossible, I agree, but I think what we're going to do is we're going to cheat, and we're going to do what the IRS did, and just move everything into schedules. So your 1099 is only two pages, right? So we're looking at building the license where we have kind of the core document, and then if you really want to get into the weeds of infringement, enforcement or liability language, that's in Unknown Speaker 29:10 attachment to we Speaker 4 29:12 tried that. So I'm dying to see how it goes. The feedback we got is we still have to read the whole document. Sure, Unknown Speaker 29:18 sure, won't fool everyone. Speaker 2 29:22 Yeah, Daniel, that's really good point. I, I used to be in the Office of General Counsel of a large company. We had a major initiative at one point to create plain English versions of all of our contracts, you know. And I think your point about educating to your your stakeholders, about why these provisions are important to you is that's that's probably incredibly helpful, good on you for thinking about that before we move to our next topic, about spin outs. Anything else anybody would like to add about contract efficiency? Contracting efficiency? Okay, so our next topic is. Just to talk about the increasing volume of university spin outs. And Myron, if we could start with you, perhaps you could just talk about the general trends, what's going on, what we're seeing. Speaker 5 30:10 Well, I think, you know, Mary and I and other and Michael were actually on a panel at the Eastern Regional meeting, and, you know, did a non scientific poll, but you know, most of the people that we're talking to are at least have 50% of their activity now focused on licensing to spin outs and and in some cases, even, even more and so from you know, now, with my new hat in you know, we report into the secretary of economic development, and the you know, for us, the creation of companies that that you know, grow and that build and grow within the state and then succeed is and create jobs and wealth. Creation is important. I think that there's increasing demand from the market to and I think others are going to talk about this, to have things more more developed, whether it's on the life sciences side, or whether it's a new material technology. I think that the market wants less risk and is willing to let others venture capital and government funding to come in and try to make those technologies, you know, less risky for, you know, for implementation. And so I think there's a number of different factors, all of which I think are causing this sort of increased focus on spin outs, and also the changing role of the tech transfer office to be more involved in venture development. Speaker 2 31:51 Yeah, that's great. Myron, thanks, and perhaps too in your role with mass ventures, is there anything you can add possibly about the government's interest and maybe growing interest in tech transfer and spin outs as a as an economic development tool for the for regional value. I think Speaker 5 32:09 what's been really interesting is that we've always kind of administered, we've had a state level sort of tech transfer organization, including Mato and mass association of tech transfer offices, but in most cases, the folks that are in government, whether it's the governor or the secretary of economic development, tech transfer was this opaque, mysterious thing that was not well understood, and sort of behind the curtain, and Now by, you know, sort of bringing into the dialog that academic spin outs are an engine that is, in many cases, producing a lot of these startups that are creating that economic development I think has been really useful is just to create greater focus that, and we're using the word now. We're actually changing the name of the mass tech transfer center to be focused on academic spin outs, because it sort of sharpens the focus to say, hey, we've got research dollars that are being spent. We've got institutions that are producing intellectual property, how can we accelerate the translation and conversion of that into companies and jobs? Speaker 2 33:27 Right? I think you also shared with me at one point too, the interesting observation that, from an economic development perspective, we can license our technology to a large company, which could be in some location, very different than ours, but with a startup, we can at least encourage local creation of jobs, as opposed to creation in a jurisdiction that might be less valuable to our immediate stakeholders as well. Yeah, Speaker 5 33:50 certainly in you know Boston, we're, you know Cambridge, you can, you know, walk down the street and take a look at examples of it. But you know an Akamai, which you know, employs 10,000 people and 3000 in Massachusetts, and has a beautiful headquarters on Broadway in Kendall Square. Is a great example of a success in not just transfer of intellectual property from the university, but also commercial and economic success. Speaker 2 34:19 Right? We have one question from the audience, so could you define a spin out versus a normal startup? Yeah, Speaker 6 34:26 maybe Justin, I could take that we're using the term spin out, and everybody here can offer their own definition, but to mean a company that is created specifically for the purpose of commercializing the university IP, and we've made that designation between spin out and startup. I think it's important for a couple reasons, but one mainly being a company is a startup for a certain defined period of time, and then it stops being a startup. But a company can always be a spin out from the university. And so I think for us, it's much easier for us to use that language to say. At, you know, look at Akamai. Akamai was a spin out from a university. It's not a startup, so I think it's, it's good from that standpoint, just to be able to define spin outs as university come, you know, university spin outs as companies created to commercialize the technology. Speaker 2 35:18 Great that that's helpful. Thank you, Michael and audience who asked that question, please feel free to ask a follow up with that if you have more questions. But Michael, while we are on you, if you could perhaps also continue into the trends you on more of the venture capital and investment side, perhaps you could talk about the changing corporate R and D landscape, and really what you're seeing that's driving some of these imperatives around, or not just imperatives, but the volume of of spin out activity you're seeing, please? Yeah, Speaker 6 35:48 I think we saw it here at Penn all the way back in 2010 during the Great Recession, a lot of corporations decided to jettison their research staffs, and they're doing much more today development, rather than research and development. So for us at the university, a lot of our research is very early stage and too early stage to garner the interest of licensing partners. So we need to take on the task of developing it further, and then we need the capital be able to do that. And there aren't a lot of mechanisms for applied research. So basically, the best method for Applied Research is to create a spin out and have that spin out apply for SBIRs and sttrs, early stage capital, whether that's from angels, foundations, family offices or even venture capital, are ways that we can continue to advance the technology so that it gets to the point that a large corporate partner will be interested. The message we've received from the corporate world is that we're willing to pay more for technologies that are further de risked, and so they would rather wait and have us do more of the work. And so if we're going to see our technologies commercialized, we have to take on this task of creating more spin out companies. Speaker 4 37:00 And I want to mention that we are in the midst of having a discussion with a company, an established company, about a different way. I'm not sure we're going to get it through. The company is interested in basically picking a couple projects, paying a certain amount of money for like, 150k or something, not millions to pay for translational work, as opposed to doing a traditional, sponsored research agreement that's more basic research in exchange for having, you know, first right to negotiate at the end of a year. What we're discussing now is how to deal with overhead, you know, in directs, how can we make that more beneficial? But this was a request that just came to us, like four or five months ago, and you're trying to figure out a way to do a better job with translation, so we'll see what happens. Speaker 2 38:02 Yeah, and your point about translation, you know, Daniel, I think you had some comments too about what you're looking at on that perspective, if you might add your perspective there. Speaker 3 38:12 Sure. So we're fortunate to have three separate translational funding programs on campus, and we're currently looking at a new position that would span kind of upstream from our office, working hand in hand with the translational programs, advising on what science needs to be invested into, down through docket management and eventually sitting on the board of a new state of Ohio backed Life Sciences venture capital fund that's currently at 20 million. We hope it'll get up to 30 million. So really trying to have a different type of cradle to grave management, right where you're where you're not siloed into the tech transfer office, but you're really trying to shepherd a good technology, all the way through to investment into a startup. Speaker 2 39:07 Great. Thank you. It seems our Michael, your definition sparked some interest in the in the questions, so that the first question that came up was that the autumn licensing survey defines startups, startups as companies established to commercialize University tech, and suggesting that our startups are small companies. Perhaps this is a matter of some fluidity too, you know, and maybe each institution might take a different perspective with the language. Is there anything else you'd like to add about, you know? So you share, I think, some interesting points Michael about that it's a startup insofar as it can be that, or it's a spin out in so far as it can hold that designation forever, whereas a startup will change over time. Is there anything else you'd like to add about startup versus spin outs in terms of company size or otherwise, for this question? Or is this. Something that varies Institute by Institute to some degree. I Speaker 6 40:03 think it is an evolving definition that a lot of people will have opinions about how to define it. I just think it's there is a temporal aspect of it that a startup in this world means a company that is just starting up. And so I think there is a temporal anomaly when you call a company such as, like, just use the example, Akamai, that has 10,000 employees, and try to call it a startup, it clearly isn't, but we can say it's a spin out and so that. So I think from that standpoint, and and, you know, my definition certainly probably comes with the University of Pennsylvania bias, our faculty do not get involved directly in their startups, in SPIN outs, however you want to call it, they can only be advisors to the companies. They can't have fiduciary role in the company. So for us, the PI involvement, as is brought up in the second question, is less of an issue, but I would still in, I think, to make the parlance easier to define, there is a difference to me between a spin out which comes from the University and a startup which comes outside the university. They did follow up with another question about, does it make a difference in licensing for us here at Penn, we do treat what we call spin outs more favorably. If a startup comes to us for a license, they may be requested to pay pass patent costs sooner than one of our spin outs would. So we're we are more lenient to companies that we would consider spin outs. So yeah, there is a difference in licensing for us here at Penn. But again, this is definitely a fluid discussion that you could probably have a whole hour on, just the difference between the two definitions. Yeah, Speaker 5 41:53 one of the we're going to be doing is trying to collect state level data. And you know, there's a bunch of variables. Is it? Is it somebody that's licensed? How about somebody that's optioned? And so I think there's, and the, you know, having been on the survey committee, I think that, you know, there's already 54 questions, and it's, you know, how granular do we need to get? But I do think that we need more clarity. The other thing that's happening now, and I know we're going to maybe talk about it later is there are spin outs that are coming out of labs that are based on open source in like an AI type of environment, where they're not executing a license, but they're, you know, they're, they're researchers, PhDs, postdocs, that are coming out of the lab and and and creating a spin out. So I think, as Michael said, I think it's a emerging area, but as we increasingly focus on spin academic, spin outs, as you know, something that is good and we're trying to encourage, I think having you know better tracking is going to be something that we're certainly going to work on at the state level. Speaker 4 43:03 One other thing addressing this, things coming out of AI and you know what happens with them? And the USPTO still doesn't really have a firm thing on, you know what they're going to issue patents on. We started an experimental program about a year ago. Now we have, like a lot of universities, an AI center, and we have made a deal with them that will hold any tech, you know, things that they are going to patent or copyright, not necessarily open source. We'll hold it for a year and not do anything to give them a time, give them time to get these startups ramped up. And that's something I've never done any place I've been, you know. And you have to analyze, does that violate by Dole and, you know, things like that. But we have one company that's so far going to come out of this. It's just a one year experiment, so I need to look at it now, and you just have to basically say, were there any lost opportunities? And it's pretty unlikely in the first year, Speaker 2 44:10 interesting, and just for the other members of the panel who may not have seen the question, the question was basically, do we manage? How do we think about licensing to a startup versus a spin out, and are there any differences in how we approach it? Michael shared his point about maybe giving some preferential treatment to spin outs regarding patent costs. Mary and Daniel just curious if you have anything else to add about your experience dealing with spin up and startup licenses. Do you handle those two in any meaningfully different way. Speaker 4 44:43 Yeah, I've never really defined spin outs versus startups. I mean, we give our Express license to startups based on, you know, Georgia, solely on Georgia Tech technology. We do have a different metric for what exists. You know, later. And so the question of when is something no longer spin out. Everybody's got a different definition. In our university, the people who start companies, quadrant and I are separate from our OTL, but we're all under the Office commercialization. So we're still trying to figure out who gets to count what? Unknown Speaker 45:22 Yeah, great point. And go ahead. Daniel, Speaker 3 45:25 yes, I just try to encourage our licensing staff to focus on, you know, or to be sensitive to pulling any money out of a startup company. You know, obviously patent expense reimbursement is is important for tto budgets. But any other time you're pulling out money before the you know, when the company has maybe a six month runway, you know, it's you're trying to balance being a license or against being on the cap table. And I think that that fundamentally changes your perspective and your willingness to bend, and you know, again, how thoughtful you are about when you need to make yourself whole, Speaker 2 46:07 yeah, yeah, that's a great point. I appreciate that. And we had one more follow up question in that vein, perhaps a little bit ill defined, but the question is, how do the institutions deal with physical sciences versus life sciences. And I suppose there's a when it comes to licensing, perhaps there's a comment. Is there anything you might comment about handling physical versus Life Sciences licensing with regards to spin outs or startups? Any broad stroke observations that you'd like to make there? Yeah, sounds like a fairly complicated topic, but yeah, I Speaker 4 46:40 would say, in my experience, has been life science. That's my background. I'm obviously an engineering school. So for the terms, as I mentioned right now, I just have one set, whether they're life science, physical science. But the big difference, whether it's spin out or not, but especially if it is startup, is the milestones, diligence milestones and whatnot, especially in, you know, the the deep tech area, where they may not even know, you know, they they have no idea what the industry is going to accept. They don't know exactly what the, you know, final product license is going to be. So making those longer term and maybe a little more vague, is the wrong word, but we'll discuss at the point of this or that, as opposed to in life science, where you can have very specific, better defined timelines for milestones. But this has been a big request. Speaker 2 47:37 Yeah, the clarifying question came in is that the question about physical first life sciences is regarding the terms of the licenses. Speaker 6 47:45 I think the question, maybe to ask it more specifically, is that in physical sciences deals, the technology might more often be part of a greater whole. So this, let's say this technology is going into an iPhone. Does that make the license different than a life sciences deal, where the company may be more likely just trying to commercialize that technology in and of itself? Speaker 2 48:13 Yeah, that's a great point. And in that example, anything else that you can add about broad stroke considerations for the terms of of a deal where you're, you're licensing a system of a subsystem of a broader system, versus the standalone product. Speaker 5 48:32 I would just say that I think on life sciences, you know, especially with for therapeutics, there's so many unknowns, and there's so many steps in, multi level distribution and different types of milestones and hurdles, whether it's clinical trials and those types of things, I think just in general, one of my comments both to founders that we're working with, and also to the lawyers that are that are working with them, is, you know, with deep tech, whether it's material technology, whether it's life sciences, for, you know, for a drug or a therapeutic, spending a whole lot of time trying to Perfect the license at, you know, really early, I think, is, is just a lot of potentially wasted effort. And, you know, we always amend license agreements, and the university is not going to, you know, has no interest, especially if they equity holder of standing in the way of that company being successful, either for an exit or doing some sort of a partnership with with a pharma company. And so I think that too, is an educational kind of attitudinal type of thing, which is that sometimes I've had both companies and founders and their lawyers try to, you know, spend a. Awful lot of time and a lot of money on trying to perfect this license based on something that may not be known for, you know, three, five, you know, or more years. Speaker 2 50:12 Yeah, yeah, great. Thank you. And mindful of our time, let's turn to the second half of our topic, where we have less content to cover, but want to make sure we get to it anyway, looking ahead to 2025 trends and challenges and opportunities for the upcoming year. And Michael, if we could turn to you first, perhaps you could just share a few thoughts about your view of the venture capital landscape for 25 and beyond as it'll impact spin out and other commercialization opportunities. Speaker 6 50:40 So I think everyone's experienced a similar state that the last 18 months have been very difficult for funding. Environment with venture capitalists that they a lot of them, have held on their money based on the uncertainty of the public markets and their ability to exit the current portfolio. And so I think they've held on to a lot of their money. But with a venture capital fund, you only have so many years to invest your capital, and so at some point it has to free up, or you have to give the money back to your investors, which obviously venture capitalists are never going to want to do. And so while the market has been very cold for quite some time now, we believe that 2025 will be a much better year that there's going to be a lot more funds trying to make investments to to get the money out there into the market. And we're already seeing, since the election, really a much greater uptick in venture capitalists reaching out to us, wanting to review the portfolio. So it may just be tire kicking yet at this point, but we're definitely seeing a lot more activity, from that standpoint of at least venture capitalists actively reaching out to us. The bigger question is that, that I don't have an answer to, is that once we get beyond 2025 and the VCs exhaust their current funds, what's behind it? I've seen, I've heard some people expressing concern that while companies are having trouble raising money right now, venture capitalists are also having trouble raising money. And so what does that mean for the next round of funds? Will there be fewer venture capitalists because they haven't been able to raise an additional fund off of what they currently have? I think that's a real open question. Because while that is certainly true, because of high interest rates, it is harder for venture capitalists to raise funds, there is also a lot of capital out in the marketplace in which is going to go somewhere. And so I think there's a lot of new venture capital funds being created, so maybe there'll be a churn of the venture capital market, and some will lose out, but I think there might be plenty of new funds to replace some that weren't able to raise. So we'll see what 2026 and 2027 look like. I think it's still very much an open question. Speaker 2 52:56 Great. Thank you for that. And before we turn to our last topic around AI based inventions. Anything else the panel would like to mention about the their expectations around VC? Speaker 5 53:06 Yeah, I guess what I would add Justin is that, you know, I do think that the increased awareness of of spin outs and of venture development is already stimulating increased in both institutional and state gap funding. So whether it's proof of concept or other other vehicles, I think that the emergence of studios as a model for incubating, whether it's venture or whether it's the institution and and so and I do think there's going to be new early stage. I know that that Penn State and a couple of others, and Mary was talking about, you know, more, more interesting models for providing some of this early stage de risking can't really comment on the, you know, sort of overall, and we're seeing the same trends in in venture there is money sitting on the sidelines that I think needs to be deployed. But whether there's going to be these giant, multi billion dollar mega funds and smaller funds, I think, remains to be seen. Yeah, Speaker 2 54:12 that's great. Thank you. And so our last topic for the day is handling and working with AI based inventions. And we only have a few minutes left, and we've, we've tried to address audience comments as they've come in. But if each of you, to the extent you have a perspective on the topic, if maybe you could share up, you know, a minute or two perspective about, you know, maybe the the challenges that you're facing in addressing AI based inventions for commercialization. Now, whatever you like to say, you know, fundamentally, I believe there's a perspective that AI is clearly growing as a, as a, as a topic, seeing more and more disclosures around inventions that use AI in some capacity. And so, you know, how are you thinking about AI based inventions from a commercialization and investment perspective? And I think none of you, equally. AI based inventions, and so those on the panel who have dealt with this, please feel free to share a short perspective. Speaker 4 55:08 I would say for us, the biggest challenge is just figuring out the best way to do it and figuring out the range of ways to approach it. I mean, it's going to be trial and error, and you don't want to leave things on the table, but we're very early stage, but yeah, we have a fair amount of AI, Speaker 2 55:26 great. Thanks, Michael, or Myron, Michael, I think you've had a couple of perspectives in your investment perspective, as you think about that the business model of these companies. So a key part of your typical diligence is, is this an organization that can make money? Does it have a long term prospect? Is it protected? You know, what are a couple of the things that maybe you think about as you're looking at AI based inventions? Yeah, Speaker 6 55:51 we've, we've seen an influx of AI based initiatives, and we've created spin out companies around them, but our challenge is the business model. How are these companies going to get make money, you know, in the short order, and how are they going to defend themselves? So while some of them may say, Oh, we're different than everyone else today, for investors looking at the company, they're going to want to know, how are you different five years from now, and how are you going to sustain your differentiation? And with AI changing so rapidly, I think that's a big unknown, and so it's difficult to raise money for these companies, because the differentiation isn't necessarily there. I was talking to a company recently that is trying to bring AI to the legal industry, and they said, you know, we've got a whole different way of doing this. And with a simple Google search, we found 200 other companies that are trying to bring AI to the legal industry. So I think that's a big challenge for spin out companies in this area, is, how do they differentiate themselves, and how do they make money? Right? Speaker 5 56:56 By what I think you'd like to add? Well, yeah, I think everybody's commented the unknowns around protection of Do you patent? Do you keep things as proprietary? Do you open source? I do think we've seen increasing number of AI, kind of applied AI companies getting funded with not in consequential amounts of early funding, like $15 million and I think a lot of the investors are basically saying, Well, you know, it's, if it doesn't work, I can always sell the the researchers in an Acqui hire, you know, type of, type of scenario. So lots, lots of unknowns, I think, lots of potential. But, yeah, there's, I don't think anybody's kind of figured out what the what the right model is, either on the protection side or on the business side. Yeah, the protection Speaker 2 57:49 side is interesting, as I know in private industry, trade secrets is often relied on as a key form of protection for AI based inventions. But that is a difficult proposition at best in academia and so given our time, would like to turn to closing remarks. And for each of you, is there one call to action you'd like to share with the audience? Looking forward to 2025? Daniel will put you on the spot. Why don't we start with you? What's one thing that you think the audience should be thinking most about or a lot about. So I would Speaker 3 58:23 say that as your as your, if your institution encounters one of these new, complicated consortium, OTAs or grants, don't try to reinvent the wheel. There's a whole community within autumn, and there's a lot of us that have had to deal with this, and we have made great strides by leveraging what other institutions have done with these, with these agreements. So I would say, get engaged with with autumn and and recognize that you're not going through this alone. Unknown Speaker 58:55 Great Mary, if we could turn to you, Speaker 4 59:00 yeah, I was going to say basically something Daniel has said, because we raised more questions than answers here, and different panelists have said, Oh, and so and so's trying this and so use your user network. That's what we're here for. We are very collegial. We are not competitors. So we need everybody's idea and experience. Unknown Speaker 59:24 Great. Myron, Speaker 5 59:26 yeah, I think again, to kind of build on top of what Mary and Daniel said, I think that more dialog. You know, the experience I think that the folks in the UK have had about equity and spin outs is people are coming back and saying, Well, you know what? At least we got it out in the open and we discussed it. And so I think I'm excited that, you know, collectively, making it easier to form and license to spin outs is something that I'm hoping that that continues. Because I think. Everybody, whether it's investors or people in the ecosystem, or, you know, state, state and local governments, wants to get this flywheel going at a, you know, at a higher pace. So looking forward to that. Speaker 2 1:00:16 Thank you. And Michael, if you could share yours, ideally in a few seconds, Speaker 6 1:00:21 I think everyone should double down on their efforts to encourage more spin outs and help their faculty create more spin outs, if not for economic development, getting the technology out to providing more resources. There's so many reasons why this is an important aspect of tech transfer offices. Speaker 2 1:00:40 Great. Well. Thank you everyone. Really appreciate everyone taking the time to join today's webinar. We hope you learned something useful, and thank you autumn for allowing us to host this session and have a great day. Everyone. If you have any questions, please feel free to reach out to us. We'll do our best to get them answered for you, and don't hesitate to reach out. But thank you for joining us today. Unknown Speaker 1:00:58 Thank you, bye. Bye. Transcribed by https://otter.ai