MAX PLANCK INNOVATION_Technology Transfer

Connecting Science and Business

The figures are impressive: To date, some 3,000 inventions have been managed, nearly 1,800 commercialization agreements signed and licensing fees totaling more than 260 million euros recorded on the books. Max Planck Innovation, the technology transfer arm of the , successfully mediates between science and industry.

TEXT TIM SCHRÖDER

he Max Planck Society con- lication and patent application struck Rarely are basic researchers experienced ducts basic research. That is manufacturers of magnetic resonance business professionals. Not all of them its task. At its institutes scat- imaging scanners around the world are familiar with the tough rules of pat- tered throughout Germany, like a thunderbolt. These devices, ab- ent law. That is why, in 1985, Frahm astronomers listen to the breviated MRI scanners, excite hydro- and his colleagues relied on the support T echo of the Big Bang, anthropologists gen atoms in the body and, based on of Garching Innovation, as the Max try to understand the growth of the their echoes, calculate images of the or- Planck Society’s technology transfer Homo erectus brain, and materials sci- gans. In this way, diseases can be iden- company was known at the time. And entists, crack propagation velocity. The tified from outside the body, without a wise move it was. GI – which was re- researchers get to the bottom of things. an operation. named to Max Planck Innovation (MI) They want to explain the world, and in late 2006 – mediates between two sometimes they unearth findings that MOVING PICTURES SHOW worlds, between business enterprises change our view of the world. “Free and THE HEART IN ACTION and basic researchers. In 1985, the in- independent” is how their work is to novation advisors had 15 years of expe- be. That is what the Statutes stipulate. Back then, the usual instruments took rience in technology transfer issues un- And indeed, some research projects more than an hour to image individu- der their belts and had already appear to be so free, independent and, al sections of a patient’s body. Thanks transferred many developments to at the same time, so far removed that to a new measuring method, the Flash companies in the form of licenses. they seem almost ethereal, like the cos- technique cut this time down to just a Flash developed into a patent rights mic dust clouds in which new stars are few minutes and was so fast that, for battle of epic proportions. The major born – which, incidentally, is likewise a the first time, it was possible to capture electronics manufacturers immediately topic for the Max Planck researchers. moving images of the heart – a true recognized the importance of the in- But that is just one side. After all, the sensation. vention. Frahm and GI wanted to make Max Planck Society produces more “This development was so dramatic their technology available to multiple than just concentrated knowledge. It that, from then on, no manufacturer companies and first negotiated partner- also produces numerous patents and could live without it,” says Jens Frahm, ships and rights of use with General inventions with practical value, as well head of the former Flash team at the Electric in the US and Siemens in Ger- as ideas that drive business develop- Max Planck Institute for Biophysical many. At any rate, the agreement with ment and form the basis for new prod- Chemistry in Göttingen, “and of course Siemens initially provided enough ucts that benefit many people. that was an exceptionally good market money to finance patent applications What is probably the most impres- position for us.” But it would be years in the EU, the US, Japan and Israel. sive invention of this kind has since before the scientists would reap the re- But the tide turned when the pat- reached a ripe old age: a patent appli- wards of their development. They first ents were finally granted in 1987 in the cation for Flash (Fast Low-Angle SHot) experienced their very own business US and in 1989 in Europe. General Elec-

was filed in 1985. At the time, the pub- whodunnit with Flash. tric, Siemens and Philips filed opposi- Collage: Franz Pagel – GRG; photos: Heinz Nixdorf Museum, SPL-Agentur Focus

10 MaxPlanckResearch Special | 09 From the first transistor to the modern supercomputer: Innovation is the engine of economic development. Max Planck Innovation is a mediator between the worlds of research and business. Spezial | 09 MaxPlanckForschung 11 MAX PLANCK INNOVATION_Technology Transfer

tions to the patents, but continued to “Flash is currently the most significant use the invention just as before. Agree- technology transfer case in the history ments were ignored. Philips even went of the 39-year-old Max Planck Innova- one step further and requested the in- tion, and not just in financial terms,” validation of the granted patent in the says Jörn Erselius, the new Managing US. For GI and Frahm, there was only Director and 15-year veteran of the one thing they could do: sue the com- Max Planck subsidiary. “In addition, panies for patent infringement. the patent dispute brought us enor- mous international recognition.” For COSTLY WRANGLING example, many industrial companies today view Max Planck Innovation as “I don’t think the companies’ legal de- a competent and influential authority. partments saw that coming,” says Bern- This is important for future inventions hard Hertel, who was Managing Direc- from the labs of the Max Planck Socie- tor of GI until the end of 2005, and the ty. Normally, an idea resulting from ba- driving force behind the defense of the sic research requires investors who are Flash patents. The companies pulled willing to shoulder the risk to nurture out all the stops and dragged out the it until it becomes a mature product. proceedings: sources were cited incor- These investors must be courted. rectly, new apparent counterevidence But Erselius and his colleagues must Jens Frahm, the brains behind the flash method, which revolutionized magnetic submitted time and time again. The also promote their work within their resonance imaging in the 1980s. The battle cost money – a lot of money that own company – to convince research- patent (right) brought the Max Planck was also urgently needed for other GI ers of the importance of technology Society some 155 million euros in projects. Through 1991, the negotia- transfer. This is no easy task, “because revenues through 2006. tions burned through 350,000 euros. many measure the value of their work “In addition, we constantly had to be in terms of publications in renowned on guard and make sure that our attor- magazines, not patents and licenses,” neys actually understood the complex says Erselius. technology in order to be able to argue But things are happening: “Until cogently,” says Frahm. the 1990s, technology transfer in the But GI and Frahm stood firm – de- Max Planck Society had, for the most spite being outnumbered. Everyone part, led a shadowy existence. Now, knew that there was a lot at stake. Just however, many see it differently,” says how much became clear when the the Managing Director. Examples such courts finally handed down their as Flash may have contributed to this. judgment in 1993: the companies had “When it comes down to it, the goal of to pay licensing fees – retroactively. noble, free basic research hasn’t Up to that point, the Max Planck changed – we are simply trying to Society had invested nearly 1.5 mil- make it clear that one can still do oth- lion euros in the legal proceedings. It er things on the side.” Like commer- paid off, because the judgment has cializing inventions. brought the Max Planck Society reve- Max Planck Innovation does this, in nues totaling around 155 million eu- collaboration with the researchers, in ros to date – by far the largest sum in two ways: through licensing agree- the history of GI or Max Planck Inno- ments and spin-offs. The team has 24 vation. The patent has since expired. members – biologists and physicists, However, the technology still forms lawyers, business experts, and a chem- the basis of all new magnetic reso- ist. “Our scientists understand the lan-

nance imaging scanners today. guage of the researchers, but they are Photo: MPI for Biophysical Chemistry – Boettcher

12 MaxPlanckResearch Special | 09 Collage: Designergold, based on material from Jens Frahm

Spezial | 09 MaxPlanckForschung 13 » You need to be able to sell. After all, anyone who sits down with the heads of business development of major companies should be able to persuade them, and to present the invention in an appropriate manner.

A strong partner for the sciences: Max Planck Innovation negotiates contracts, handles licensing matters and helps innovators draw up business plans. The requisite know-how is held by Managing Director Jörn Erselius (top picture, left) and the company‘s author- ized agent Ulrich Mahr (right), and their staff of two dozen (bottom picture, from left to right, Bernd Ctortecka, Wolfgang Tröger and Dieter Treichel).

also trained in matters of patent law and patent and license management,” says Erselius, who himself is a biologist who also has an MBA degree. And one more trait is crucial: they must be able to sell. After all, anyone who sits down with the heads of business development of major companies should be able to persuade them, and to present the in- vention in an appropriate manner.

THE PRODUCT SPECTRUM BOOSTS MARKET OPPORTUNITIES

The Max Planck Innovation team re- lieves scientists of a significant portion of the need to make external contacts: they negotiate commercialization agreements, handle licensing matters, defend patent rights and assist in draw- ing up business plans for spin-offs. Since the collapse of the new market in 2001, venture capital investors have become very cautious. Says Erselius: “Only in exceptional cases will single- product companies likely make it in to- day’s market. Usually they must make it clear that the new technology has broad applications and that it offers promise for other new products, in case one turns out to be a failure.” The business plan must take this into ac- count. But even if this condition is met, the latest financial crisis – after a slight temporary recovery – has

brought further cuts, such that even Photos: Max Planck Innovation

14 MaxPlanckResearch Special | 09 MAX PLANCK INNOVATION_Technology Transfer

the existence of young, established would not have existed without the in- apply for patents to protect the find- companies, for example in the biotech fluence of a major pharmaceutical ings they obtain through long years of industry, is threatened. company. Sutent® (or, more accurately, arduous work. He knows that many re- This makes it all the more important to the active ingredient Sunitinib) is a searchers nevertheless hesitate. “For provide support in setting up compa- multikinase inhibitor that simultane- many of them, patents and publication nies, which is why Max Planck Innova- ously flips multiple cellular switches in scientific journals are contradictory tion also helps with putting together that are important for the growth of tu- terms – so the researchers shrink away the right team for the new business. Af- mors and of the blood vessels that sup- from applying for patents.” They fear ter all, a young company can persuade ply the tumors. The active ingredient that the protracted procedure will de- investors only when the top-rate re- blocks receptors on the surface of can- lay publication, as publication is not searchers are accompanied by a capable cer cells. If certain molecules – so- permitted before the patent applica- management team to run the business. called growth factors – dock at these re- tion is filed. “There simply must be expertise on ceptors, the receptors trigger a series of But that is only partly true. “The both sides. We try to bring the two to- fatal signals. Sunitinib prevents this, publication ban,” Erselius explains, gether,” says Jörn Erselius. and the tumor dies. “applies only up until the day on For Axel Ullrich, this cellular metab- which the patent application is sub- 60 PATENTS, 4 COMPANIES – olism mechanism had become clear as mitted – after that, nothing else stands THE LIFE OF A RESEARCHER far back as the early 1990s. It was just in the way of publication.” However, it as clear that he would need support if is important to inform the patent at- Concentrating on research and leaving it was to ever become a drug. “It was torney of the date of the planned pub- business matters to reliable partners – very important to me that I develop the lication. “Ultimately, what it comes that is how Axel Ullrich has always idea into an application myself,” says down to is simply the right sequence done it, too. “My calling is definitely the Max Planck researcher. So licensing of publication and patent application.” not to be an entrepreneur. I prefer to it out wasn’t an option. Ullrich decid- leave that to people who are good at it, ed to set up a company with his col- IDEAS YES, MONEY NO and who also understand my work,” league Joseph Schlessinger. In Germa- says the Director at the Max Planck In- ny, hardly any companies were Erselius urges all scientists, in case of stitute of Biochemistry in Martinsried, interested in biotechnology research at doubt, to protect themselves through near Munich. Nevertheless, the bio- that time. The two thus decided to base technology transfer agencies – just like chemist and developer of cancer drugs their company in the US. New York Max Planck scientists can do at Max is probably one of the most enterpris- University signed on as a cooperation Planck Innovation. And there is one ing scientists in the Max Planck Socie- partner. more thing that is important to him: to ty. In about 30 years of research work, Ullrich wanted to avoid going it eliminate once and for all the contra- he has established 4 companies and alone and inquired at GI. The then diction between publication and pat- filed applications for 60 patents. Managing Director Heinrich Kuhn be- enting, it would make sense to reintro- One of Ullrich’s most successful de- lieved in Ullrich’s idea, backed the duce the so-called novelty grace period velopments is the breast cancer drug company and finally managed to get in Europe. This allows scientists in Herceptin®, which stems from his time the Max Planck Society to co-found the many countries, including the US, to with the American biotech company new company Sugen. Sugen was later file their patent applications even after Genentech, which was founded in the sold to the Swedish company Pharma- publication – of course, only for a lim- late 1970s. In the meantime, Sutent® cia, which was subsequently taken over ited period. “The Max Planck Society (MAXPLANCKRESEARCH 2/2006, p. 81), a by Pfizer. The pharmaceuticals giant and Max Planck Innovation are fight- new cancer drug, has achieved a break- drove the clinical trials forward in ing at the political level for the reintro- through. It may even become a block- record time. However, Max Planck In- duction in Europe,” says Jörn Erselius. buster this year – that is what pharma- novation made sure that the Max However, the greatest obstacle on ceutical companies call drugs that Planck Society and Ullrich retained the path from development to product generate more than a billion dollars in their shares in the Sutent® business. is not usually the patent, but rather the annual sales. Sutent® could thus be- Pfizer, too, remains obligated to pay lack of funds. Only in the rarest of cas- come a success the likes of Flash – and, sales-based licensing fees. For the next es does basic research produce fully fin- like the latter, it is a further example of few years, Sutent® is likely to bring the ished ideas. This is simply how it is. how many years can pass from the time Max Planck Society licensing revenues But investors want mature develop- an idea is developed until it becomes a in the millions. ments, ideally prototypes from which successful product. Sutent® clearly points up how im- they can tell whether they will be a fi- The genesis of a drug takes time and portant it is to safeguard valuable nancial success. culminates in expensive clinical trials knowledge to avoid coming up empty- “There is an innovation gap be- that hardly any research institution handed later. That is why Jörn Erselius tween the two sides,” says Jörn Erselius. can shoulder alone. Sutent®, too, constantly admonishes researchers to “Germany’s federal and state govern-

Special | 09 MaxPlanckResearch 15 MAX PLANCK INNOVATION_Technology Transfer

Axel Ullrich, scientist and businessman with vision, remains modest: “Being an entrepreneur certainly wasn‘t my calling in life,” he says.

ments spend some 20 billion euros in istry of Education and Research is tionary innovations.” This requires a support of science each year, of which considering a validation fund that leap of faith. Frahm criticizes the tra- about half goes toward basic research. would, as a central institution, provide ditional funding policy, the tedious A fraction of this amount would be suf- resources for scientists from research “over-evaluation” of applications. ficient to develop many discoveries and facilities, universities and polytechnic “Applications have since reached book inventions to the point that they could institutes. However, unlike traditional format. Who can even process them be picked up by industry. But there has, applications – for example to the Ger- anymore?” as yet, been too little funding, and the man Research Foundation – here, not findings of basic research are not being only the scientific basis would be as- APPLIED RESEARCH WAS LONG turned into innovations to the extent sessed, but also the future market and CONSIDERED A SLEAZY BUSINESS that would be possible. competition. Approval needs to be This is a great loss, because it is pre- quick and unbureaucratic. There are now a few support programs cisely these findings that form the ba- In this way, the fund would satisfy available for young researchers who sis for new top-ranking products. In a condition that researchers like Jens want to set up their own companies to the field of biotechnology, the Life Sci- Frahm have long been calling for: “We market their findings, such as the Fed- ence Inkubator at the caesar research need a fund that supports projects eral Ministry of Economics and Tech- center, and the MI-founded Lead Dis- spontaneously and unbureaucratically nology’s EXIST-Forschungstransfer, the covery Center in Dortmund (see p. 46) across geographic regions and disci- Kreditanstalt für Wiederaufbau’s High- are now helping to close the innova- plines – especially unconventional Tech Startup Fund and the Federal tion gap. For inventions that go be- projects, because it is often precisely Ministry of Education and Research’s

yond biotechnology, the Federal Min- the bizarre theories that yield revolu- ExistGo-Bio program. Photo: Pfizer Germany

16 MaxPlanckResearch Special | 09 » There are also examples of basic knowledge that have found their way into earthly applications from very distant places – like outer space.

Some 20 years ago, there were hardly ing at in New scientists use mathematical methods to any such programs in place – nor was York. Tuschl is one of the scientists describe the distribution of galaxy clus- there much demand for them. Natural- who, in the late 1990s, discovered and ters and the arrangement of matter in ly, Max Planck Institutes already exist- established RNA interference – a com- the vast expanse of the black firma- ed back then – such as the one for iron pletely new method for silencing ment. research in Düsseldorf – and conduct- that cause disease. A few years ago, the researchers ed research that was directly relevant met with medical specialists from the to industry. “On the whole, however, ONCE-NEGLECTED MOLECULES Technical University Munich and dis- science was driven by hypotheses rath- NOW SILENCE GENES cussed the question of whether their er than by technology. Applied re- mathematical model might not also be search was considered distasteful,” says The scientists noticed that activ- suitable for studying the human body: Frahm. But the world has changed. ity in a cell is determined in part by galaxies are not evenly distributed Now, it is expected that the major re- small RNA molecules that research throughout space, but are organized search institutions that receive govern- had, until then, largely neglected. into structures that resemble those of ment funding give back more to socie- Tuschl analyzed the structure of these a sponge, which contains many hol- ty than just scientific results. double-stranded RNA molecules (si- low chambers separated by thin walls. As for Max Planck Innovation, it , small interfering RNAs) and, for Human bones also have a very similar has already given back a lot. In 39 the first time, succeeded in demon- structure. years, it has accompanied some 3,000 strating their impact in mammalian Together, the astronomers and med- inventions on their path to market and cells. By using siRNAs, genes can be ical experts came up with the key idea: concluded nearly 1,800 commerciali- systematically silenced. The RNA inter- could the programs be used to describe zation agreements. To date, it has post- ference (RNAi) method is now used in bone density distribution? It quickly ed licensing revenues totaling more labs throughout the world to study the became clear that it works: the equa- than 260 million euros – three-quarters function of genes in cell cultures and tions for characterizing the spacious of them owing to Flash alone. Since lab animals. A therapeutic effect has al- cosmic structures can now determine, 1990, the company has advised start- ready been proven in various clinical based on computer tomography imag- up founders and has so far helped studies. It is quite possible that future es, whether a patient is suffering from nearly 90 companies get off the RNAi drugs will be as promising as osteoporosis. The development is cur- ground. Based on its licensing reve- Sutent®. Axel Ullrich is hardly sur- rently in clinical trials. Max Planck In- nues, says Erselius, it ranks right up prised that many biochemical findings novation is helping in the search for in- there with the Fraunhofer-Gesellschaft are making their way into practical ap- dustry partners that want to transform as a leader among German technology plications. “This field just happens to the system into a product (MAXPLANCK- transfer institutions. And Max Planck be very application oriented, it is hard- RESEARCH 4/2005, page 38 ff.). Innovation would be in the first league ly possible to avoid the opportunities Thus, the astronomers’ discoveries in the US, as well. for future therapies.” are also good for everyday applications. This is also likely to remain the case But there are also examples of basic And other ideas, too, can look forward in the future, as new and promising knowledge that have found their way to going to market: Max Planck Inno- companies are currently getting start- into earthly applications from very dis- vation evaluates roughly 150 new in- ed in which Max Planck Innovation is tant places – like outer space, for exam- ventions every year and files patent involved. One example is Alnylam. ple. Normally, colleagues of Gregor applications for about half of them. It One of the founders of the company is Morfill, Director at the Max Planck In- markets another 60 or so without pat- Thomas Tuschl, a former researcher at stitute for Extraterrestrial Physics, ent protection – a sign that basic re- the Max Planck Institute for Biophysi- spend their time gazing into the depths search is now closer to our daily lives cal Chemistry in Göttingen, now work- of the cosmos. These Munich-based than ever before, even when it some- times seems so far removed.

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