Fred Reinhart, MBA, RTTP 

Interview with John Fraser in 2019

• AUTM President, 2015
• First began volunteering with AUTM: After being a member, I waited five to six years.  I wanted to feel like I knew what I was doing. 
• First AUTM Committee position: I think it was Janna Tom’s Government Affairs Committee. 
• First AUTM Leadership position: I believe it was chair of the Government Affairs Committee.
• First AUTM Board position: VP for Finance for two, two-year terms. 

When and how did you find your way into tech transfer?  
In the wake of the passage of Bayh-Dole Act, the University of Michigan (U-M) was expanding its TTO, looking to hire the first non-lawyer to do outreach and proactive marketing. I had just completed an MBA at U-M in marketing and new product development and thought it would be an interesting job but confess I had no idea what it would entail or where it would lead. 

What had you been doing prior to making the leap? 
I was in a sales job relating to coatings and paints and going through an MBA program. Ironically, my undergraduate degree was in fine arts, and I later realized that having a creative background was helpful in synthesizing the three aspects of tech transfer: technology, IP law, and business.

Why did you make the leap? 
Well, first of all, with a wife and three kids, I needed a job. But also, I thought it was a fascinating opportunity to be in a field where you learned something new every day (and it was!). I love business and technology and especially the kind that can help people. It was also a chance to work at my alma mater and avoid moving out of state. 

Tell us about the state of tech transfer at the institution you joined. 
We were learning on the job really, as the profession was still very new. Initially, at U-M we were much too focused on legal aspects: avoiding every conceivable risk or being taken advantage of by evil corporations; over negotiating deals; and filing patents on everything. We only had a couple of income-generating licenses and a modest number of invention disclosures. 

What was your vision of tech transfer back then? 
Really, it was quite immature. I think we hoped to generate a lot of revenue. Good luck with that! I had a limited conception of how industry sourced technology and quite a mistaken idea of licensing to startups or small, high-tech companies. For example, I told the CEO of a small but promising high-tech prospective licensee that we were concerned that they were “operating in the red” (even though they had raised the necessary venture funding). That did not go well. Regarding the tech transfer process, I did learn fast, realizing how companies screen technology licensing opportunities. So I was the first person at U-M to draft non-proprietary descriptions of technology to use as first step licensing tools.  

What were some of the issues you faced in the early days? 
If tech transfer was new for academia and our researchers, it was new for the private sector partners we hoped to attract. There was a real trust issue then. As noted above, our lawyer-led TTO was very concerned about getting tricked or abused by licensees. Meanwhile, companies didn’t know what to make of us. For some time, they treated us like a common “inventor off the street”, mainly concerned about us suing them for stealing our ideas. We were often asked to sign ridiculous, one-sided forms that said we would waive our rights not covered by an issued patent or something like that. Consequently, it could take months to get a routine nondisclosure agreement (NDA) or materials transfer agreement (MTA) signed by the company, and that only after a multi-level corporate review. 

We overspent on patents because we were not yet skilled at assessing the potential of new ideas. 

As now, there were just too many inventions being handled by too few licensing folks. We set things up as a case manager, cradle-to-grave operation which was fine, but all the burden was on the one licensing professional versus separating out various functions. 

We needed to learn to define the role of the lawyers, who sometimes overruled royalty or financial licensing terms to our detriment. 

Progress was slow, and we had limited income with successful hits few and far between. 
We were really at the mercy of upper university leadership. One president did not interfere; another one (I’ll just call him out - Jim Duderstadt) saw no financial prospects for tech transfer and, because he believed the TTO was a bottleneck that added no value, wanted to give away ownership of inventions to the faculty and exclusive option rights to one local, highly conflicted company set up by cronies. 

What were some of your early successes? 
One of the first marketing analysis projects I worked on involved a nasally administrated flu vaccine that, after a tortured path through several companies and failures, became FluMist®.  U-M had a successful football helmet license that generated a steady income. Finally, we had a good software marketing program centered on a very well-regarded ergonomics program. On the startups side, our director succeeded in doing some promising spinouts way before it became fashionable. 

Some of your early failures? 
Too many to count, although I suppose not actual failures per se, just inventions we invested a lot of time and money in that were never licensed. You had to accept that you would handle a lot of cases that never went anywhere and boy, it was hard to drop them because some inventors pointed to abandonment as strong evidence of our incompetence. We had a few failed negotiations with companies that used political connections or truly hard-ball tactics that ended any chance of an agreement. 

What was faculty’s attitude to tech transfer back then? 
There was an extreme range. At one end, some faculty viewed tech transfer as the devil’s work and felt it sullied their and the university’s reputations. At the other extreme, some younger faculty were very aggressive and wanted us to file on everything because it was the best thing since the proverbial sliced bread. For example, I resisted filing a gene-therapy patent application in 1990 because I knew (and was proved right) that any resulting patent would expire long before clinical application. More evidence of our incompetence! We got into a few fights with principal investigators (PIs) who had software or copyrightable technology and started companies we felt should have been licensees paying something. This related to the issue of defined IP versus the knowledge faculty members carried in their heads. We had to learn to manage that conflict. But by and large, most faculty were cooperative and curious to see whether their ideas would be picked up by industry. And that was the main driver for them, not the prospect of royalties. We learned early on that the key relationship was between our faculty member and a scientist or champion inside the company, so one of our roles was to facilitate, nurture, and protect it. 

When did you start to get involved with SUPA / AUTM? 
Right away, in early 1986. I went to a SUPA meeting in Crystal City, Virginia near the U.S. Patent and Trademark Office (USPTO). It was the best thing we ever did for professional training, sharing ideas and challenges and creating long-term friendships that still exist. 

What was the Organization like back then? 
Small and therefore intimate. I think the Crystal City meeting was less than 200 people. We got to know everyone. The profession was young, but people were very inspired and committed to the goals. Also, those with a lot of tech transfer experience were always generous with their time and willing to help or advise newcomers. 

Who were some of the leaders of AUTM then? 
Steve Atkinson, Kathy Ku, Lita Nelsen, Duke Leahey, Niels Reimer, and later, Joyce Brinton, Marv Guthrie, and Teri Willey. SUPA founders like Larry Gilbert and Ralph Davis were early influences. 

What were some of the issues the organization was facing? 
Lots but I recall several:  the appropriateness of the name (SUPA) and image of the organization; the extent to which it should serve international versus U.S. members; the Membership status of industry representatives and service providers; and how to run a growing organization with mostly volunteer labor.

What were some of the issues the profession was facing? 
Everyone had to learn on the job; there were no degrees in tech transfer. There was a shortage of experienced people, so each office was struggling to learn how to be effective (and cost effective).  I think many schools quickly found out that the TTO was a cost center, not a profit center, and that you needed patent money to develop a program. Being too frugal was a non-starter, and many TTO staff were told to first get a licensee then they would be given money to file a patent application.  This was a recipe for failure and frustration of course because of timing. For licensing officers, the more cases you carried, the less value you could add to each, and you were more likely to be seen as a bureaucrat. So you had a growing mountain of cases to handle. It took too much time or it was politically difficult to abandon them. And success, an executed license, brought with it time consuming but critically important oversight and compliance responsibilities. 

Did you decide to get involved with any particular issue? 
I started doing small surveys, e.g., on university policies regarding faculty consulting, conflict of interest, and codes of conduct. Later I added topics like TTO staff compensation and incentives (with Ashley Stevens), software licensing, material transfer and confidential information transfers, bio-material sharing, export regulations, and eventually got heavily involved with public policy and advocacy.  

What were some of the big Issues in your early days? 
For me, primarily those listed in the previous question. For others, finding “speculative” and patent money to run a TTO program and secure IP protection; political interference (e.g., “you will only license the technology to in-state companies”); the severe challenge of running a one-person office; a feeling of isolation which could occur even in larger offices; and, in general, a discouragingly low hit rate requiring you to work on many projects, all of which had potential but extremely few of which panned out. 

Who was on the Board with you? 
Mark Crowell, John Fraser, Pat Jones, Jon Soderstrom and Arun Pradhan as presidents. Other members included: Nikki Borman, Chris Yochim, Kevin Cullen, Dana Bostrom, Polly Murphy, Lee Heiman, Michael Dilling, Kirsten Leute, Bob MacWright, Janna Tom, Sean Flanigan, Paul Liu, Sue Patow, Chuck Valauskas, Mike Batalia, and Andy Cohn.   

What were Board meetings like back then? 
Cooperative with a lot of open and collegial debate even when views differed. I think each president set the tone to some extent. 

What were some of the issues the Boards you were on wrestled with? 
International strategy; AUTM branding; the creation, dormancy, and resurrection of the AUTM Foundation; growing pains and the transition from a one-person support infrastructure (Penny Dalziel) to Sherwood/Kellen; professional certification (CLP and RTTP); elimination of the Regional VP structure; creation of the Cabinet; decision to create and recruit for the AUTM Executive Director (and later CEO) position; creation of high-level marketing and D.C. advocacy positions; disputes about by-law changes, election process and the Leadership Development Committee; strategic planning debates; the relationship between AUTM and other academic organizations Association of American Universities (AAU), Association of Public and Land-grant Universities (APLU), Association of American Medical Colleges (AAMC) and the Council on Governmental Relations (COGR); and financial management (in 2008-09 the value of AUTM’s investments dropped to around $1.6 million versus todays $3.0+ million). I am sure I have left out a lot of issues. 

What are the biggest changes you’ve seen in the profession since you entered it? 
First, the aggregate knowledge base, recognized standards of good practice and operational experience are awe inspiring. Tech transfer has truly become a profession with AUTM Membership growing from under 200 to more than 3,300 and represented by many countries besides the U.S.  Second, AUTM and the profession are the recognized global leaders and have a seat at the policy table with more influence than ever before. Third, for better or worse, entrepreneurship and startups now have a dominant influence on TTO activities. Fourth, AUTM has a highly developed and beneficial network of cooperative partners in government, industry, and academia, including internationally. Fifth, the set of responsibilities of many AUTM Members has evolved and broadened to include entrepreneurship and startups, economic development, conflict of interest (COI) committee work, industry relations, institutional development, and running technology parks, incubators and gap/investment funds. 

What do you wish might have turned out differently? 
One of the most unfortunate trends that developed in the early days, and it has been hard to overcome, was the focus by some institutions and even AUTM, on licensing revenue as a measure of success. At times, that has generated criticism of AUTM, its Members and its Members’ employers. In a similar manner, litigation or efforts to extend a lucrative patent monopoly by certain schools or teaching hospitals reflected poorly on technology transfer and even Bayh-Dole.  Meanwhile, what was ignored has been the reality that the vast majority of TTOs are losing money or, at best, barely breaking even if all costs are figured in. With regard to policy, I wish the Bayh-Dole Act had included clauses stating, once and for all, that march-in is not to be invoked as a price control mechanism. 

Where do you see the profession in the next ten years? 
I think it will be unrecognizable in some ways because new models will emerge based on creating more startups and more viable startups as a result of smart integration of training, incubation, funding, and staffing. Tech transfer will continue to be woven more intelligently into the institution’s strategic engagement efforts with external partners. There will be more effective partnerships between academia and companies, foundations, and government players. The corollary for AUTM is how to address the needs of its Members without becoming an unfocused organization that tries to be all things to everyone. The push to change the name of AUTM to “ARIA” was strongly opposed by almost all past presidents for this and other reasons. AUTM services must meet the needs of an evolving constituency, but I believe IP management, licensing, whether to existing companies or startups, and licensee and research sponsor relationships are still at the core of AUTM Members’ activities, and it would be a mistake to stray too far from that core. 

What is the biggest challenge on the horizon you see for our profession? 
Global trade friction and the likely emergence of China as the first- or second-largest economy will have a major effect on the practice of tech transfer. Another (possible) challenge which relates to political polarization will be trends involving opposition to patents and a corresponding undermining of needed incentives to develop new ideas. 
 
Describe the main challenges either internal or external to the Association. 
Internally, challenges included: decisions relating to an appropriate international strategy; AUTM branding; resurrecting the AUTM Foundation; the transition to Sherwood/Kellen; creating and hiring an AUTM Executive Director; disputes about by-law changes, our election process and the Leadership Development Committee; and strategic planning debates. Externally, challenges included: attacks by the Kauffman Foundation as they advocated for “free agency” and continuous calls for inappropriate use of Bayh-Dole march-in rights. Also, at times, AUTM veered close to a divergence of opinion with other university-related associations on some issues. Finally, while certain critics did not make headway, charges that academic tech transfer was nothing but a “tax on innovation” and its success was highly exaggerated were a distraction. 

Is there an existing document (s) which describes the situation and the responses? 
Yes, Office of the President call minutes and various Board documents (e.g., guidelines, standard operation procedures [SOPs] and minutes). 

Were there particular people/viewpoint/mechanisms that were important to frame the Issues and offer options for responses? 
Absolutely. If you agree on strategy, goals, objectives, and tactics and use them to guide your decisions, investments, SOPs and other operating framework, you will not go far wrong. It’s a bit of a pain, but revisiting and updating the strategic plan every five years is important because things change. Some “contrary” board members had ideas or pushed for decisions that were markedly different from the majority of the Board, but their opinions, even if extreme, always helped us make a good decision because they forced us to consider many options. 

What was the outcome? 
Good decisions and consensus (more or less!). A sound strategic plan keeps the ship moving in the right direction. 

What advice would you give future Boards if the Issue arose again? 
Always rely on your strategic plan.