The Bayh-Dole Act was enacted 27 years ago, but the ramifications persist to this day. The act lets universities patent and commercialize inventions that come from federally funded research. It has gradually turned universities into incubators for breakthroughs in technology and medicine.
Stanford owns the patent on Google's Internet search technology, and last year, the university earned $48 million from 428 technologies licensed to companies. Texas Instruments was early to recognize the power of university research. The company has partnerships with Rice, Georgia Tech and the University of Illinois, among others, and with universities in India and China. CEO Rich Templeton, 49, spoke with USA TODAY management reporter Del Jones about the R&D coming from colleges. Following are excerpts, edited for clarity and space.
Q: Whatever happened to Bell Labs and the other corporate engines of R&D?
A: They don't exist anymore on the scale that they did in the '50s, '60s and '70s when the government permitted (an AT&T) monopoly. Over time, research has moved into a university setting. The U.S. is in a great position because we have the premier research universities around the globe. But we've got to fund them.
Q: TI donates to the universities, and they give you products? Is it that simple?
A: No, not anywhere near as simple. There's no product development going on between ourselves and universities. They have people who dream of what can be done or what may be possible. They also have a powerful capability to assemble multidisciplinary teams. In medical technology, they can get electrical engineers, computer scientists, biologists, chemists and people from the med schools in the same room.
We can bring people to describe the big barriers and areas where we could do things never imagined if we had a breakthrough. It's that combination of minds that determines interesting research projects. It's interaction as opposed to product development.
Q: Isn't government-funded universities doing R&D a kind of corporate welfare?
A: No. It lets universities do research in areas like nanotechnology that may have no commercial application for 10 years. As a nation, we need more funding into universities for R&D.
Q: There are so many universities. How does a company go about choosing?
A: It's about people relationships. A strong relationship with a university begins with alumni inside the company with a passion. We have great connections with Georgia Tech and Rice because Texas Instruments has a lot of graduates from Georgia Tech and Rice. You have to have a foundation, and not with some corporate university office.
Q: Don't you run into competitors also partnering with the same universities?
A: I've never found that to be a problem. A healthier university R&D program leads to a healthier technology marketplace. That creates opportunities to compete and succeed.
Q: A big byproduct would be talent recruitment. Do you use your partnerships as a tryout for future hires?
A: Master's and Ph.D. students will spend terms or semesters, or intern, or have summer jobs. We find that enormously powerful. We get a chance to have some of the best students working down here for a summer or during working semesters. The universities like it because it keeps their best students well connected to industry. We get to learn about the students and, just as important, the students get to learn about TI.
Q: University athletic programs have come under criticism for making money off unpaid football and basketball players. Isn't this sort of the same thing?
A: No. It's building universities stronger. These are exciting people who want to make an impact on some tough challenges. What they lack are resources to shape ideas. Anything we can do to come together is a good direction.
Q: How do you hammer out who gets the patent, who gets the revenue?
A: Product development is done inside our company, and we end up working out different intellectual property and licensing agreements. But, in general, if they've done the inventing, they have the patents.
Q: When universities make a lot of money licensing patents, isn't there a danger that they will focus only on blockbuster ideas with commercial applications at the expense of fundamental research that produces no revenue?
A: A greater loss would be the competitive advantage we have in this country, great research universities. I really don't think this is an issue. Universities tend to be pretty independent. Go spend time at a roundtable with researchers, Ph.D.s and Ph.D. students. These are pretty independent-minded people, to say the least. It's not commercially driven, at least not what I've seen. That creativity and independence is strong and healthy.
Q: When money is involved, the lawyers are close behind. Wyeth paid the University of Colorado millions over a drug-patent dispute. Are there ways to avoid litigation?
A: I am not a legal expert. Having the correct cross-licensing setup when you begin is usually helpful to avoid conflict. TI has not run into legal issues that I'm aware of.
Q: Many foreign companies have set up partnerships with U.S. universities. Is it a problem if our universities are feeding ideas to foreign competitors?
A: No, the problem is the other way around. If we have companies from around the world who want to invest and make U.S. universities stronger, we should welcome that, because strong universities in the U.S. are going to lead to a stronger economy.
Q: And yet, a growing number of your university partners are in China and India.
A: We're there as well because the U.S. is 5% of the world's population. There are big markets out there and really bright people. Being in position to work with the best and brightest is something that you just have to do.
Q: How does the research in China and India compare with U.S. university research?
A: The simple statement is there are a lot of bright, energetic passionate people around the world. Helping them pursue those dreams is something in our best interest.