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Commercializing University Research in Diverse Settings: Moving Beyond Standardized Intellectual Property Management [Research Technology Management](Research Technology Management Via Acquire Media NewsEdge) More flexible approaches to IP management can help find a path to market for technologies that don't fit standard strategies. OVERVIEW: We discuss the challenges of managing university intellectual property (IP) for applications in diverse settings that are often inadequately served by standard IP management approaches. Strategies focused on profit appropriation through legal mechanisms and control of key resources may work in some industrial settings, but may hinder innovation in others, leaving promising technologies untapped. Open innovation has been proposed as a solution, yet limited research has been conducted in broader contexts. We present four examples illustrating the challenges for university technology transfer offices (TTOs) attempting to commercialize technologies for diverse applications in unique circumstances-when government regulators are the primary users and when applications involve a number of industries with varying motivations and resources for technology adoption. More open approaches to IP management, coupled with value propositions emphasizing cognitive and sociopolitical legitimacy, can lead to more effective diffusion. KEYWORDS: Commercialization, Intellectual property management, Technology legitimization, Technology transfer, Uni- versity research University research has long been recognized as a major source of potentially useful knowledge (Foley 2012; Martin 2007). Much of that knowledge has made its way into the commercial market, mostly through technology transfer of- fices (TTOs). For example, in 2005, US universities generated $40 billion in economic activity, creating 628 startups and 4,932 licenses (Martin 2007), and in 2012, the AUTM Licens- ing Activity Survey (2012) identified 705 startup companies and 5,130 licenses originating from technology invented at US universities. However, although university-originated intellectual prop- erty (IP) has been successfully diffused in some industries-for example, the biomedical, chemistry, and electronics sectors (Cohen et al. 2000; Mowery 2011)-other applications are of- ten inadequately served because they require management approaches that do not fit the "standard" strategies employed by TTOs. Understaffed and burdened with conflicting man- dates, many TTOs pursue strategies focused on profit appro- priation through legal mechanisms and control of key resources (Di Minin and Faems 2013; Hanel 2006; Teece 1986). Under this approach, new technologies must be pat- ented or protected by some other legal mechanism before they can be considered for further development and commercial- ization. Although this kind of standard IP management ap- proach may provide efficiencies for TTOs, they are not suitable for many others. The problem is exacerbated by the fact that TTOs often lack the resources to proactively search for poten- tial users beyond those industries that actively seek them out. They have much less flexibility to pursue alternative arrange- ments than their private-sector counterparts (Burnside and Witkin 2008), and they often lack the capabilities to develop the diverse inventions originating from their many faculties in ways that facilitate diverse applications (Martin 2007). Fur- thermore, as Foley (2012, 13) has noted, TTOs are increasingly under pressure to be self-supporting, an unrealistic goal given that "at no time in the last 30 years has this happened." Open innovation may offer one avenue to improved com- mercialization of university research, but TTOs' focus on in- ventions that fit standardized IP management policies may thwart open innovation by restricting communication be- tween internal and external entities and by introducing ex- cessive bureaucracy into the process. Such restrictions both limit opportunities for productive sharing and undermine the legitimacy of the technology, reducing the likelihood that it will be commercialized or widely adopted. Open innovation approaches can be particularly useful in moving technology off the shelf, where the potential user community is small, fragmented, or not well connected to university research sources. We illustrate this point with four examples. The first, a pathogen detection technology, would have as its most likely primary users government forestry regulators charged with preserving the health of a nation's forests. Although the technology is well defined and well de- veloped, commercialization is complicated both by concerns about its patentability and by the unusual nature of the user base. The other examples draw on a research project devel- oping biocatalysts for transforming lignin to be used as an alternative to petroleum in the production of vanillin, resins, and carbon fibers, illustrating the challenges presented by technologies that may have multiple applications, which re- quire researchers and TTOs to engage with multiple indus- tries that have varying motivations and resources for technology adoption. The particular circumstances of each of these examples illustrate how different industrial settings may call for specific IP strategies, including open innovation approaches, which may not align with typical TTO policies. The Trade-Offs of Standardized IP Management Practices Somaya et al. (2011) and Teece (1986) suggest that garnering the economic benefits of innovation requires rigid IP protec- tion and industry-specific complementary assets, such as man- ufacturing facilities, complementary technologies, distribution channels, and service infrastructures. Organizations that have both effective legal protection mechanisms and strong comple- mentary assets can commercialize their inventions themselves. In the absence of such complementary assets, however, inven- tors must rely on legal mechanisms to protect their IP and en- able profitable licensing arrangements that allow others who have such assets to commercialize the invention. Universities fall into this second category. As a result, university TTOs often focus on legal mechanisms to protect IP and enable licensing; patents are the most common such mechanism (Reitzig and Puranam 2009). Perhaps not coin- cidentally, patents are also the main protection mechanism for pharmaceuticals and medical equipment and are impor- tant in special purpose machinery, computers, auto parts, and miscellaneous chemicals (Cohen et al. 2000)-all in- dustries with a long history of proactively seeking out uni- versity research. However, managing patents can be a complex task re- quiring large legal departments, creating high barriers to entry for smaller organizations or overwhelming costs for technologies suitable for smaller markets. Many TTOs lack the resources to manage such complexity, and, as a result, they default to a streamlined, "one-size-fits-all" approach to IP management (Hall, Bachor, and Matos 2014) that does not take into account widely acknowledged differences in the way that different industry sectors approach IP (Alexy et al. 2009; Pavitt 1984). In smaller or more idiosyncratic industries, TTOs' standardized approach will likely not work well, leaving many potential applications underutilized. A standardized approach that limits avenues of communi- cation between researchers and potential technology adopt- ers may also limit the potential for commercialization in other ways, by preventing a technology from acquiring legiti- macy. Legitimacy is defined in two dimensions: cognitive legiti- macy, knowledge of a new activity and what is needed for it to succeed in an industry, on the part of both researchers and potential users, and s ociopolitical legitimacy, the value placed on an activity by cultural norms and political influences (Al- drich and Fiol 1994). Thus, an innovation establishes legiti- macy as its technical performance and social acceptance co-evolve and expand, reducing the uncertainty associated with it (Hall et al. 2011). Standardized IP management approaches tightly focused on IP protection, and thus on nondisclosure, may prevent learning in both directions, leaving potential users unaware of the technology and researchers unaware of users' specific needs, thus hindering the development of cognitive legiti- macy. Similarly, the insistence on reaping sharply defined economic benefits may handicap the development of socio- political legitimacy, particular for technologies whose short- term commercial viability is unclear but whose other characteristics-better environmental ("green") characteris- tics, for instance-may lead to long-term benefits as sociopo- litical legitimacy develops. Although these kinds of value propositions may be a key innovation driver and may align with the mandate of the Bayh-Dole Act that universities use their IP for public good (Martin 2007), they typically do not fit with standardized, profit-focused IP management ap- proaches. A more open approach facilitates the establish- ment of both cognitive and sociopolitical legitimacy, allowing potential users to learn about the technology and its capabili- ties and creating a perception of it as desirable and appropri- ate within societal norms (Suchman 1995). Some universities are taking a more flexible approach, with some success. Penn State's Seven-Point Plan for Reinvigorat- ing the Research Culture reflects that institution's belief that a more flexible approach to IP ownership spurs research growth (Foley 2012), and the policies of the Wisconsin Alumni Re- search Foundation emphasize that TTOs should act as "protec- tor, propagator and influencer" to build legitimacy for novel technology (Jain and George 2007). The University of British Columbia's TTO operates the Global Access Principles pro- gram, which attempts to maximize the societal impact of its IP for medical applications (Levy et al. 2010, 9). However, initiatives like these are not widespread; most university TTOs still struggle to balance their dual responsibilities of commercializing their university's research for the financial benefit of the institution and demonstrating that their publicly funded research produces societal benefits (Foley 2012; Hall, Bachor, and Matos 2014; Jain and George 2007). We provide four examples to examine the challenges of managing university IP for diverse applications, under cir- cumstances typically neglected by standardized approaches. The first example concerns the potential diffusion path of a genome-based forest pathogen detection technology from a university to government regulators. The other examples look at the possible commercialization paths for lignin trans- formation technology that can be applied in the production of vanillin, resins, and carbon fibers. Our analysis of these four examples is based on case study data collected via inter- views with the researchers, TTO personnel, and other stake- holders associated with the given technologies (see "Study Methodology," above.) The projects involved were funded by Genome Canada, a not-for-profit organization mandated by Industry Can- ada to implement a national strategy for supporting Cana- dian genomics and proteomics research. Over the past decade, Genome Canada has provided $915 million in government funding and drawn an additional $900 mil- lion in co-funding from other organizations to finance ge- nomics research, primarily through universities but increasingly with industry participation. Consistent with the Bayh-Dole Act in the United States, the Canadian gov- ernment has an explicit understanding with universities that public investments in research should result in soci- etal benefits (Langford et al. 2006). Genome Canada's ap- proach, which funds genomic research in a variety of fields, is consistent with Industry Canada's other science and technology initiatives, such as the Canadian Foundation for Innovation and the Canadian Institute for Advanced Re- search, which also emphasize social and economic benefits from public research (Evans 2014). Forest Pathogen Detection Prevention is the best strategy for managing forest health; early detection of potentially damaging pathogens is a key element in this approach. Currently, forestry protection agencies mostly rely on visual inspection for pathogen detec- tion, a limited approach given that pathogens can be present before trees exhibit visible symptoms of disease. Visual in- spections are also unable to identify previously unknown pathogens, as was the case with Sudden Oak Death, which caused widespread devastation after the first outbreak in Cal- ifornia in the mid-1990s (Elliott, Shamoun, and Chastagner 2012, 32). International trade is a major cause of infestation, allow- ing pathogens to travel across oceans and borders to invade new areas. To reduce pest infestation and foster safe trade, the International Plant Protection Convention (IPPC) defines international standards for measures to control the spread of pests; these measures are then implemented through na- tional plant protection agencies for each signatory. In Can- ada, the Canadian Food Inspection Agency (CFIA) fills that role; in the United States, enforcement of IPPC standards is the responsibility of the Animal and Plant Health Inspec- tion Service (APHIS) of the US Department of Agriculture (USDA). Genomics-based tools being developed by the University of British Columbia's (UBC) Tree Aggressors Identification Using Genomics Approaches (TAIGA) Project will improve detection by comparing the genomics of sample materials against a database of known pathogens. TAIGA scientists are also developing a collection of assays to detect three groups of forest and plant pathogens, allowing forestry officials to identify the presence of pathogens within those groups, even if the specific pathogens are as yet unknown.1 Initially, the TAIGA technology will be used to test samples of imported forest products in a lab as part of pre-entry inspection, elimi- nating false negatives and greatly reducing false positives, and next-generation tools will eventually be developed for field assessments. While there are other users who might benefit, the initial users for this technology are national plant protection agen- cies such as the CFIA and APHIS charged with monitoring import and export of plant and forest products and protecting live forests. Interest in the technology is high with these agencies, indicating a high level of cognitive legitimacy for TAIGA's work. Interviewees indicated to us that their agen- cies would welcome such technology, especially for its ability to identify pathogens quickly. As a USDA Forestry Service representative noted, "the advantage for us is that . . . if you can get at it quicker, you might have management policies that can be laid out that would have some impact on it before it gets out of hand." Indeed, the CFIA is a project partner; the head of their testing facilities acts as a research collaborator, providing guidance for technology transfer. Although forest protection is widely supported by all stakeholders, some of the regulators we interviewed ex- pressed concern over how the data provided by the technol- ogy would be used. Thus, while overall sociopolitical legitimacy is high, in practice inappropriate interpretation of the data could erode the technology's legitimacy: "One [danger] is that the tools then end up being used out of context. We don't really know how to interpret the results adequately," a Canadian Forest Service representative told us. If it is widely adopted, the technology would affect vari- ous nonregulatory stakeholders, such as logging companies, nurseries, forestland owners, and import/export firms; these groups are similarly concerned about how the data may be interpreted, particularly if it adds additional admin- istrative costs for companies already operating under tight financial constraints. As an industry representative said, "Our industry . . . [has] other issues to deal with, and I find it quite difficult to sell the whole phytosanitary area." In other words, the impetus to keep costs down trumps the potential social good of the technology for these stakehold- ers. Indeed, most industry interviewees indicated that they believe the technology will become legitimized only if it is first adopted by regulators. However, diffusing the technology through regulators can be particularly challenging for TTOs and easily scuttled under a standard IP approach. The willingness of regulators to pay for the technology, and thus the value of the IP, is difficult to de- termine; forest pathogen testing is only a fraction of most reg- ulators' testing portfolios, which typically include the much larger testing program for agricultural products, and it is gen- erally incorporated into a larger government budget pool. One CFIA representative said, "[I]n a government agency, there isn't really a bottom line . . . it's not based on business decisions really. So I can't increase the cost of my something-or-other to help cover off the cost of this other test." A further issue for this project is that the technology it- self may not be patentable. In June 2013, the US Supreme Court ruled, in Association for Molecular Pathology v. Myriad Genetics, that the isolation of genes without any creation or alteration of genetic information is not an act of invention. The gene sequences isolated by TAIGA's research are thus not patentable, although it may be possible to patent the resulting assays. As a result of these two complications, UBC's TTO had limited interest in pursuing this technology because it did not fall within its standard IP approach. In response, the TAIGA scientists, with support from the funding agency, consulted with a patent lawyer, who advised that patenting the assays would not be worth the cost given the uncertain size of the market and recommended that the computer algorithm used to generate assays remain a trade secret. Rather than wait in "IP limbo," the TAIGA researchers are actively working to broaden both knowledge of the technol- ogy and its appeal. They and the CFIA have drafted a mate- rial transfer agreement to share data and the assays, and the CFIA has procured the necessary equipment to conduct pathogen tests using the process. The TAIGA project leader, who currently holds positions both at the university and with the Canadian Forest Service, is considering starting a consul- tancy centered on the technology, with the mission to define operating procedures and interpretive algorithms for the technology and the data it produces. In addition to empha- sizing the technology's efficiency and effectiveness, this consultancy will ensure that the social benefits of forest protection-that is, the basis of the technology's sociopoliti- cal legitimacy-are consistently and clearly articulated. This work would help facilitate the immediate goal of the project, as agreed between the university and the funding agency, to increase the protection of Canadian forests, which can be achieved through the CFIA without formal IP protection. The researchers, the funders, and the TTO have thus priori- tized technology diffusion over IP protection that would oth- erwise delay the adoption of the assay. Lignin Transformation Technology Renewable forest biomass can be converted into lignin-based feedstock that can replace petroleum in a wide range of ap- plications, reducing or eliminating environmental impacts associated with petroleum use. According to UBC microbiol- ogy and immunology professors Lindsay Eltis and Bill Mohn, the key requirement to allow such use is more efficient methods of lignocellulose degradation. Naturally occurring bacterial strains and enzymes can be used as biocatalysts to transform lignin into materials that can be used in industrial applications from vanillin for the food and fragrance indus- tries, to resins for the construction industry, and to carbon fibers for the automotive industry. Each of these applications brings varying business opportunities that influence how the IP may be most effectively managed. All of these present challenges for the TTO and its standardized IP management approach. Vanillin Vanillin, a flavoring agent, is likely to be an early application of the UBC lignin research. The scientists have genetically altered a bacterium to create a novel mutated strain that pro- duces vanillin when grown on lignin. The invention, a bacte- rial biocatalyst and a protocol to convert lignin to vanillin, is patentable. Although the application has been shown to be technically feasible, its cognitive legitimacy is only partly es- tablished, and initial market studies determined the global market is small, only an estimated $600 million to $800 mil- lion (Wong 2012). On the supply side, an industry represen- tative stated that a large pulp mill could meet the majority of the world's vanillin demand, but would require a substantial investment to reach a relatively small market beyond its nor- mal customer base. The technology thus initially did not meet the TTO's minimum yield threshold, although the TTO informed the scientists that they would reconsider proceed- ing with the IP if a business case could be presented that can meet such a threshold. Further market studies have found that vanillin prices vary considerably, ranging from petroleum-based vanillin at $12/kg to natural vanilla beans at $4,000/kg. The potential lignin-based alternative falls between these extremes, if it could meet regulatory definitions of "natural," which indus- try interviewees estimated would be priced at about $700/kg. However, our interviews with the CFIA indicated that it would probably not qualify as natural unless some changes were made to the process. Alternatively, the research team and/or the TTO could attempt to provide justification to have the CFIA definitions of "natural" reformed so that vanillin produced through the lignin process could qualify as a natu- ral ingredient. This relatively small-scale application illustrates the breadth of knowledge and business issues that must be un- derstood in order to tailor an IP approach. Although the technology is patentable, the small market and lack of in- terest from potential suppliers of lignin would normally mean that it would fail to meet the TTO's threshold for proceeding with the IP process. However, a deeper market analysis uncovered opportunities for differentiation by de- veloping vanillin for the more lucrative natural market. Thus, while cognitive legitimacy issues, such as finding suppliers and developing process technologies able to pro- duce vanillin below $700/kg, remain a challenge, sociopoliti- cal attributes-the lucrative natural market niche-provide a useful value proposition as justification for proceeding with technology development. Regulatory definitions for food additives and "natural" market trends are, however, highly complicated, and specialized business issues are be- yond the radar of most TTOs; a standardized IP approach would most likely shelve this technology. A decision to abandon the technology would run counter to Genome Canada's mandate to provide social or economic benefits from publicly funded research. A more effective alterna- tive would be an open, collaborative approach, in which partners with expertise in this market niche and experi- ence with the associated regulatory complexities are ac- tively sought out and included in the development process. Given the scarcity of such industry-specific expertise, the TTO, with support from Genome Canada, has sponsored internships for graduate students to explore these gaps and identify potential partners. Resins Resins used by composite wood construction manufacturers currently use petroleum-based phenol formaldehyde sup- plied by the chemical industry, which provides durability at a low cost. In 2004, the International Agency for Research on Cancer classified formaldehyde as carcinogenic to humans. In response, the California Air Resources Board's Composite Wood Products Airborne Toxic Control Measure was intro- duced to reduce formaldehyde emissions. In spite of heavy opposition from industry (Hajiamiri, Collins, and Graham 2010), the regulation was approved, forcing companies to seek wood adhesives that are low in formaldehyde or com- pletely free of it. The regulatory impetus has been matched by a change in the wider market, as consumers have begun to demand low-formaldehyde or formaldehyde-free prod- ucts. As one industry representative commented to us, "Peo- ple hear the word 'formaldehyde' in the adhesive and get concerned. So some companies have promoted formalde- hyde free in their adhesive." Such pressures thus present a "social good" value proposition for the lignin-based resins be- ing developed by the UBC researchers. Although demand for low-formaldehyde resins provides sociopolitical legitimacy for lignin-based resins, establishing cognitive legitimacy remains a challenge. The resins industry generates $1.2 billion per year, of which about $300 million could be lignin-based, in part because our interviewees indi- cated that there is a desire to be less dependent on fluctuating petroleum prices. Although an initial market study deter- mined that this market is sufficient to meet the TTO's thresh- old for seeking IP protection, the incumbent technology is well established and highly efficient, making it difficult for a new technology to break in. The industry is, however, very price sensitive-"pennies matter," according to one industry representative-and has suffered from poor financial perfor- mance, partly due to the housing downturn in the United States. Companies in this niche also do not operate large R&D departments. Industry Canada has tried to reverse these problems by encouraging more research in the sector, for ex- ample, through targeted Genome Canada funding for the forestry sector, under which this project was supported. To date, there has been no patent application; the TTO's im- mediate difficulty is the length of time until the technology is ready for commercialization, estimated by the scientists to be at least five years. A standardized IP approach, in which the TTO awaits the development of industry interest, would result in the technology's stagnation. Actively seeking out and providing credible value propositions for industry-in this case the technology's value in ensuring compliance with regulatory requirements and meeting consumer demands for low- formaldehyde products (in other words, building sociopolitical legitimacy)-provides a lifeline for this technology. Once the scientists establish legitimacy, the TTO will then be able to de- termine an appropriate IP strategy. In this case, it will likely be most productive to adopt a relatively open approach, given the funder's mandate to increase competitiveness through inno- vation for a financially troubled industry. Lignin-Based Carbon Fiber Lignin-based carbon fiber (LBCF) for the automotive sector, which has an estimated global market of $13 billion, is an- other potential application illustrating the breadth of IP op- portunities and challenges from this one project. LBCF is uniquely positioned to gain sociopolitical legitimacy, as fuel efficiency has become a core concern for consumers. About half a car's steel could be replaced with lighter LBCFs, re- sulting in improved energy efficiency. According to one technology developer we interviewed, LBCF strength char- acteristics are currently inferior to those of competing polyac- rylonitrile-based fiber, but LBCFs have better environmental characteristics because they are not petroleum based. Socio- political legitimacy could thus be used as an initial value proposition to compensate for deficiencies in cognitive legitimacy. However, considerable challenges remain, as described by an LBCF expert we interviewed: "The likelihood of [users] adopting both a new material and a new process all at once is probably pretty low." The solution, according to a carbon fi- ber policy expert, is a collaborative IP strategy: "If you don't get a variety of folks in the room, from lignin suppliers to technology licensers to operators to materials manufacturers to end-users, you're not going to build this industry." In fact, the industry appears to be quite open to this sort of collabora- tion. The Chief Technology Officer of a carbon fiber company told us the company often shares assets and "do[es] a great deal of collaborative design work with car companies." As with resin applications, there have not yet been any patent applications for LBCF, although an initial market study has determined that the market size exceeds the TTO's investment threshold. The estimated time before the technology is ready for commercialization is about 10 years. Because cognitive legitimacy has not been established, the TTO has not prioritized this application, and few companies are willing to invest in applied R&D to create specific products at this time. However, in an effort to move their technologies forward, the scientists are actively engaged in a number of applied research networks. One such major collaboration is the Forest Innovation by Research & Educa- tion Network, an organization mandated by Canadian funding agencies to build synergies among eight forest R&D networks to support the priorities of Canada's forest-sector innovation system.2 In addition to scientific research, par- ticipants in the network share their experiences around IP issues, advocacy, industry engagement, training, and com- munications to help identify viable commercialization op- portunities for their research. Thus, the network provides alternative support for technologies facing IP and commer- cialization issues when the TTO's involvement is on hold and cognitive legitimacy is being established. Once the tech- nology is established, the TTO can then develop an appro- priate IP strategy, in this case, most likely IP-transfer agreements among partners. Lessons Learned These four examples represent diverse industrial applications that have challenged the university TTO's standard IP man- agement approach. Each of the technologies involved has its own opportunities and challenges (Table 1). As a result, the scientists have had to develop business cases to support their arguments for further investment in the IP. Although building cognitive legitimacy remains challenging for all four potential applications (albeit to varying degrees), sociopolitical legitimacy in the form of sustainability attributes may stimulate initial interest, attracting key users and industry players. Open innovation approaches can help this process. For the more advanced TAIGA applications, researchers are avoiding IP limbo by sharing the technology with the end user, which will provide legitimacy for other regulators and further applications. For lignin, a sustainability-based value proposition can motivate industry participation, which could help compen- sate for small markets (in the case of vanillin), thin margins (resins), or the need for complex, long-term industry partner- ships to support technology development and establish com- plementary assets (carbon fibers). For example, interviewees from the Oak Ridge Carbon Fiber Composites Consortium, an industry, government, and academic research network devel- oping lignin-based carbon fiber, emphasized that sustainability is a key driver of this innovation and is of interest to industry. While the Canadian government and universities recog- nize the value of increasing innovative capacity in more di- verse industrial settings, the standardized IP management approaches commonly used by TTOs hinder technology dif- fusion. Resource-limited TTOs typically focus their efforts on research activities that are more conducive to their system, leaving potentially useful and socially beneficial technologies to languish in university labs. In our examples, however, the research teams are resisting this outcome by pursuing more open, collaborative IP approaches, deemphasizing rigid IP protection, developing business cases and focusing on how legitimacy can be established. For TAIGA, the technology's cognitive legitimacy can be demonstrated through faster, more reliable detection ca- pabilities and has support from the primary users. The in- creasing importance of forestry protection for governments around the world establishes the foundations for its sociopo- litical legitimacy. However, successfully commercializing the technology will require an in-depth understanding of the nuances of working with regulators, who often lack a clear notion of specific costs. Such problems are exacerbated by the perception in North America that the forestry sector is already financially constrained and thus resistant to addi- tional costs. In this context, an IP management approach fo- cused on patents and cost recovery would fail to capture the potential benefits of the technology. Instead, the TAIGA team is partnering closely with the CFIA, allowing for technology legitimization, which will facilitate diffusion to other regula- tors and later secondary applications for forestry companies, nurseries, and municipalities. Such an approach may not generate immediate revenues, but, in addition to building so- cietal value, it could generate profits for the university or sci- entists through consultancy services. Indeed, our interviewees consistently noted the importance of how data derived from the technology should be interpreted, a concern that could be addressed through a specialized consultancy. Lignin transformation technologies are more conducive to patenting than the TAIGA project, but they are also at an earlier stage of development and competing against incum- bent technologies that are well entrenched and highly com- petitive. Establishing cognitive legitimacy will thus be a major task; however, given that these industries are under pressure to address health, safety, and environmental im- pacts, additional sociopolitical legitimacy, in the form of the sustainability value proposition offered by the lignin-based alternatives, may compensate for the difficulties in estab- lishing cognitive legitimacy. The key driver for the vanillin application is the need to understand regulatory definitions and consumer demand for the much more lucrative "natural" market. Thus, in addition to understanding specific industry dynamics in different sec- tors, the TTO must also be aware of emerging societal trends and regulations. However, the small vanillin market would be only a fraction of the TTO's wider portfolio, yet one that will require considerable effort to understand the nuances of regulatory factors. Partnerships in which the IP is shared with firms can provide these complementary capabilities, fa- cilitating commercialization of the technology. One such ex- ample is the Biomaterials and Chemicals Strategic Research Network, which facilitates the development of value-added products from forest-based lignin.3 In contrast to vanillin, composite wood-products manu- facturers are cost driven and thus unwilling to adopt new resin technologies unless cost-performance improvements can be demonstrated. However, in addition to reducing their dependence on fluctuating petroleum prices, they need to find solutions for growing consumer concerns re- garding formaldehyde; this may offer a key value proposition for the IP in this otherwise unattractive market. Researchers are attempting to demonstrate such a value proposition by conducting preliminary environmental impact analysis, comparing petroleum- and lignin-based resins. So far, a life- cycle assessment shows that lignin-based resins offer a 20 percent reduction in global warming impact over petroleum- based products. This kind of assessment, which quantifies the social benefits of the technology, can enhance the value of the IP by building sociopolitical legitimacy. Of the three potential applications, carbon fibers are cur- rently the least competitive when compared to petroleum- based alternatives. However, awareness of societal pressures on automakers to become more environmentally respon- sive could provide an initial value proposition for potential users. Thus, as with resins and vanillin, sociopolitical legiti- macy can induce user interest by providing automakers with a renewable option that can reduce vehicle weight for improved fuel efficiency. Note, however, that the scale of development-and potential market size-is substantially larger in this industry and as a result major industry part- nerships will be required. Conclusion Universities often overestimate the value of patents, some- times using them as a proxy rather than a tool for commer- cialization (Langford et al. 2006). These problems are exacerbated by the fact that IP can be generated at a wide range of faculties, many of which create knowledge whose clearest application may be in what can be called passive in- dustries-those that have limited resources and capabilities to seek out university research-or in less traditional arenas, such as regulatory agencies. As TTOs focus on industries where patents are important for product innovation, passive industries, and the technologies they might use, can easily be overlooked. Exploiting these technologies will require TTO managers to resist their instincts to closely guard IP and con- sider alternative approaches. To make such approaches work, however, the TTO must engage holistically both with the university and with potential partners to develop industry relationships that are longer term, more flexible, and allowed to evolve over time in alignment with the dynamic nature of the technology and its development. Managing IP is a two-way street; while scientists and TTOs should seek out users more aggressively, that ap- proach is feasible only when potential users are willing to partner. Managers in passive industries thus need to de- velop a deeper awareness of the activities of the research community and monitor research developments. Embrac- ing open innovation through collaborative partnerships is a good first step, but it will require a change in the existing university IP management mindset. Managers should, there- fore, look for opportunities to collaborate with universities and support legislative changes, such as appropriate regula- tory changes and tax incentives that support university- industry partnerships. Funding for this research was provided by Genome British Co- lumbia and Genome Canada. The authors would like to thank those who participated in our research; our collaborators, Lindsay Eltis, Marie Claude Fortin, Richard Hamelin, Frank Ko, William Mohn, and Hesther Yueh; and RTM's six anonymous reviewers and its managing editor, MaryAnne Gobble. In smaller or more idiosyncratic industries, TTOs' standardized approach to IP will likely not work well, leading many potential applications to be underutilized. Study Methodology The analysis presented in this paper is part of a broader project that aims to identify commercialization issues and societal ben- efits related to genomic technologies applied in the forestry sector. The examples selected here illustrate technologies that are likely to have economic and social benefits, but are not likely to benefit from the standard IP management practices commonly used by TTOs. Our goal is thus to understand how university research can be more effectively commercialized in the context of diverse market and industry settings. Data were collected between 2011 and 2013. We started with consultations with 12 scientists involved in developing the technologies to identify preliminary issues that may affect the technologies' diffusion. Secondary sources, such as gov- ernment documents, the academic literature, and the popu- lar press, were then analyzed. We conducted interviews with 121 representatives from industry, government, nongovern- mental organizations, trade associations, academia, and TTOs that have a stake in the technology; these interviewees were identified from the desk research and through the snowball technique (Berg 1988) , in which participants suggest others who should take part in the study. We used different sources of data and interviewed stakeholders with varying perspec- tives to ensure data triangulation (Yin 1993). A semistructured interview guide was used to investigate innovation manage- ment, IP approaches, public policy, stakeholder relations, and strategy issues and perspectives. Interviews averaged an hour and were recorded and transcribed. Throughout the duration of the study, we consulted with the scientists developing the subject technologies, providing feedback from the interviews and literature, resulting in the identification of additional issues that were then researched. Both deductive and inductive approaches were applied during data analysis. Following Miles and Huberman (1994), the deductive approach included categorizing data into themes (for instance, IP protection, potential beneficiaries, and government regulations). We then inductively identified other themes raised by interviewees, such as industrial applications, diffusion pathways, IP issues, and key legitimacy issues. These themes were used to conduct a systematic cross-data analysis to identify commonalities, differences, patterns, and structures in the data using text analysis software. To ensure internal reli- ability, two researchers coded the data (Rolfe 2006). Diffusing technology through regulators can be particularly challenging for TTOs and easily scuttled under a standard IP approach. Regulatory definitions for food additives and "natural" market trends are highly complicated, and specialized business issues are off the radar of most TTOs. Sociopolitical legitimacy could be used as an initial value proposition to compensate for deficiencies in cognitive legitimacy. The scientists have had to develop business cases to support their arguments for further investment in the IP. 1 The technical details of this project are available at http://taigaforesthealth.com/ ResearchActivities/PathogenicGroups.aspx. 2 See http://www.fibrenetwork.org. 3 See http://www.lignoworks.ca. References Aldrich, H., and Fiol, M. 1994. Fools rush in? The institutional context of industry creation. Academy of Management Review 19(4): 645-670. Alexy, O., Criscuolo, P., and Salter, A. 2009. Does IP strategy have to cripple open innovation? 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Jeremy Hall, Stelvia Matos, Vernon Bachor, and Robin Downey Jeremy Hall is a professor at the Beedie School of Business, Simon Fraser University, and editor-in-chief of the Journal of Engineering and Technology Management. His research interests include innovation dynamics and the social impacts of innovation and entrepreneurship. His recent work has been published in Business Strategy and the Environment, California Man- agement Review, Ecological Economics, Energy Policy, Journal of Cleaner Production, I nternational Journal of Production Research, Journal of Busi- ness Ethics, Journal of Business Venturing, Journal of Management Studies, Journal of Operations Management, MIT Sloan Management Review, Re- search Policy, Technological Forecasting & Social Change, and Technova- tion. [email protected] Stelvia Matos is an adjunct professor at the Beedie School of Business and the Centre for Policy Research on Science and Technology at Simon Fraser Univer- sity. Her research areas include life-cycle assessment, environmental manage- ment tools, sustainable innovation, and the social aspects of innovation. She has published in Harvard Business Review (Latin American edition), I nterna- tional Journal of Physical Distribution and Logistics Management, International Journal of Production Research, Journal of Business Ethics, Journal of Cleaner Production, Journal of Management Studies, Journal of Operations Manage- ment, Research Policy, Technovation, and others. She holds a PhD in civil engi- neering from the University of São Paulo, Brazil. [email protected] Vernon Bachor is a senior research associate and lecturer at Simon Fraser University, managing editor for the Journal of Engineering and Technology Management, and a management consultant specializing in the strategic impact of research-based technology and innovation management on mul- tinational enterprises. His recent work has been published in California Management Review, Management International Review, and Technova- tion. He received his PhD from the Haskayne School of Business, University of Calgary. [email protected] Robin Downey is an associate of the Centre for Policy Research on Science and Technology at Simon Fraser University. She is also a research associate in the Department of Communications at the University of Calgary. Prior to working in academia, Robin was a grants officer at Genome British Colum- bia. She received her PhD from the Faculty of Communications and Culture at the University of Calgary. [email protected] DOI: 10.5437/08956308X5705250 (c) 2014 Industrial Research Institute, Inc |