Getting from a patent to a product is still where many ideas get stuck

Terry Gerton There’s a new report out from the Bayh‑Dole Coalition looking specifically at the Bayh-Dole Act from 1980 and talking about the impact that it’s had on technology transfer. Dr. Fossum, when you think back to that time, what was going on there that the Bayh-Doll Act really was trying to resolve?

Eric Fossum My understanding is that the biggest issue was that the government was not successful at commercializing a lot of the technologies that were developed under federal funding. So they’ve kind of come to the government warehouse as IP and basically go nowhere. And the feeling was that universities, if they had a stake in the IP, would be much more successful at getting those technologies commercialized.

Terry Gerton And Dr. Kemeny, how does letting universities and researchers control their patents actually move an idea closer to the market?

Sabrina Kemeny Yes, there’s much more motivation for a researcher that wants to start their own business if they can have access to the technology that they developed and therefore have some commercial potential from it.

Terry Gerton Does it make it move faster? Does it grow it bigger?

Sabrina Kemeny Well, I think it allows the companies to control what happens to the technology and therefore to stay ahead of the competition. It allows them to get financing more easily because if they have ownership of a patent portfolio, financial sources, whether it’s VCs or industry, are more willing to give it to them.

Terry Gerton Well, the two of you are featured in this report really as sort of a tech startup fairytale, I think, at least from my perspective. It might not have felt that way when you were living in it, but looking back, Dr. Fossum, this work on the CMOS image sensor started actually in a NASA lab. Without the Bayh‑Dole framework, how would your research have been different?

Eric Fossum Well, that work was supported primarily by NASA through Caltech. So presumably, the intellectual property would revert to NASA or be assigned to NASA. And then NASA would, in some likely bureaucratic manner, would try to find a company to license the technology, and probably not exclusively. So exclusive license really motivates people to commercialize it. They feel like they’re going to have other competition with no fences put up by a patent. People are less likely to try hard at doing that. So I think, I mean, Sabrina did an amazing job at negotiating with Caltech to get the license to our startup company, Photobit. And as we’ve often remarked, you know, it’s really the inventors themselves that want to see their baby succeed and are extremely motivated to make that happen. So that increases the chance of success for commercialization too, I think.

Terry Gerton Dr. Kemeny, tell us a little bit about the technology itself and how once you had the rights to it, you could really build a company around it.

Sabrina Kemeny Well, the technology was basically a better image sensor. There were already electronic cameras at that time, camcorders and such, but we were able to develop a technology that was, at the time, faster, better and cheaper, which was the mantra, actually, at JPL at that times. It allowed the miniaturization of cameras. We coined the term camera on the chip because we could actually put all the important electronics along with the actual image sensitive portion together on one chip, which led to miniaturization, about 10 times lower power, and much cheaper eventual manufacturing. So it was just an important way to, it allowed us to be able to commercialize it.

Terry Gerton It’s commercialized everywhere now, everything from cell phone cameras to satellites.

Sabrina Kemeny Correct. So, I mean, what happened with Photobit is that we really did take the technology from the lab to the marketplace. I mean, when we left JPL for instance, we had already proven out the technology, but it was, let’s say, it was all in black and white. It was up to a commercial company like Photobit to figure out how to make it in color so that it could be useful in commercial applications. But yeah, it is the technology that is in all camera phones today, basically.

Terry Gerton Dr. Fossum?

Eric Fossum I think another important aspect is that while the basic idea was covered by the JPL patents or Caltech patents, Photobit itself had to invent a whole lot of other things in order to make it a commercializable product. And so Photobit probably filed for close to 100 patents, perhaps, on the technology after it already left JPL. So other things are half-baked coming out, but they’re not really ready for being a product.

Terry Gerton I’m speaking with Dr. Eric Fossum and Dr. Sabrina Kemeny. Dr. Fossom, let’s go on with that thought because, what are the biggest barriers that still slow the transition from this conceptual discovery, maybe the initial patent onto real use?

Eric Fossum Well, the technology was demonstrated, by the way, at JPL. It wasn’t totally conceptual. But turning something into a real product means that not only does it have to function the way customers expect, but there’s other things in what we call the innovation ecosystem that also have to be ready for it. When we started doing our chips at Photobit, there was no standard for what sizes of chips needed to be. How many pixels by how many pixels, for example. And that feeds directly into how you’re going to store the image and record the image, and display the image ultimately. So a lot of this stuff wasn’t really developed, or wasn’t mature at least, and a standard at that time. So that was an obstacle to commercialization. Had nothing to do with the technology itself. That had to do with the innovation ecosystem being ready or not ready.

Terry Gerton And is that still a challenge today across all kinds of different technologies, I would assume?

Eric Fossum Oh yeah, it’s something that when they teach innovation, I teach innovation even, that we talk about is the fact that it’s not just you alone against the world. It is you and all your future partners that have to make the product successful.

Terry Gerton And Dr. Kemeny, this report ties the system to broader outcomes. It talks about jobs and startups and entire industries, as Dr. Fossum was just talking about. From your perspective, where has the Bayh‑Dole model maybe had the biggest impact beyond individual inventions?

Sabrina Kemeny Well, I think it has been incredibly important for the country in terms of staying ahead in technology and just allowing us to have all of these incredible industrial engineering successes that we, I mean, all of Silicon Valley is based really on so much of these kinds of designs and being able to have the inventors actually commercialize their own products and create companies is in large part what’s created some of the high tech success that the United States has had.

Terry Gerton This framework is almost 50 years old. Is it still responsive to the tech environment today? Are there changes that would need to be made to make it more impactful?

Sabrina Kemeny I think maybe I would let Dr. Fossum, because he’s more in the university space that could answer that. I’m not close enough to know what would be specific improvements. I think, I mean, one of the things that’s thankfully has happened is many of the universities have created commercialization programs that didn’t once have them. And so there are paths for scientists and engineers to basically transfer their technology. But as far as further impediments, I’m not as well versed. Do you have anything, Eric?

Eric Fossum Actually, I think the Bayh-Dole Act was pretty well formulated and it stood the test of time. I think it’s so successful that even the government’s looking at it thinking, oh, maybe we should somehow participate in those monetary rewards that universities are reaping from the success of the Bayh-Dole Act. And this is, you know, controversial. I can’t say I’m for or against at what level, but it’s certainly taxpayers typically fund all this technology, initial conception. But at what point do we give back directly to the taxpayers? There’s indirect, of course, because you create the company, the companies pay taxes, the employees pay taxes. The economy grows. A rising tide floats all ships, as they like to say. Whether it goes direct to the taxpayer or not is something that is currently being debated, I think. I’m kind of curious to see how that goes.