5.2.1 Start-up Systems Development

A critical start-up activity in any center is to establish the vision and infrastructure that are required for an effective industrial collaboration and technology transfer program, including systems for tracking interactions with industry. The Director and senior leadership of the center typically form the vision and strategic plan for industrial interaction during the center's proposal development process. The infrastructure required to effect this vision and strategic plan must be developed with post-NSF survival in mind. One ERC had existed as a University/Industry Cooperative Research Center before becoming an ERC and had already established the basic foundation for their industrial collaboration, but found they had to adapt that model to the more strategic, systems-oriented ERC approach. Other new centers have surveyed existing ERCs during their initial development phases, to benchmark the strategic plans and infrastructure that were effective for the existing centers.

In the months after the formation of a new center, it is important to work with the university and its technology transfer office to establish internal support and work out an ERC membership agreement for the program. NSF requires each ERC to develop its own generic membership agreement, governing the participation of industrial and practitioner members and specifying the forms of industrial cash and in-kind contributions that constitute membership in the center. Following subsections of 5.2.1 address these issues. See Attachment A for specific NSF industrial membership requirements. In multi-institutional ERCs, where university/industry research centers may already exist, it is essential to examine and compare the existing membership structures, fees, and terms and conditions and involve all key personnel at the universities from the start in drafting the new ERC agreement. Support for the ERC is generally high immediately after the award of the cooperative agreement, and the climate for negotiating long-term university support is good. Some centers have negotiated return of overhead from grants received by faculty doing center-related research. In most universities the return of intellectual property revenue is divided according to a certain formula that includes the inventor, the university, the originating unit (the ERC), and other parties.

An important component of the strategic plan for industrial interaction is a clearly defined marketing strategy for recruiting industrial sponsors. Some of the techniques that ERCs use are discussed in Section 5.3.1.2. A well-developed marketing strategy typically includes an analysis of the industry sectors affected by the center's research and of the value drivers that industrial sponsors will find attractive in a research and technology transfer relationship. The marketing plan includes financial and technology transfer goals, specific actions and timelines needed to reach those goals, and a budget for the Industrial Affiliates Program. This plan includes strategies not only for recruiting new members, but also for retaining existing ones, through customer service activities such as communications on center research activities and results, faculty interactions with sponsor companies, and regular visits to sponsors' sites.

Advertising and "cold calls" to potential sponsors usually are not successful. Centers should instead target specific companies based on their involvement in the particular industry, their interactions with other sponsors, and their degree of involvement in technology development. The use of current industrial partners to identify leads is particularly effective in identifying potential new members. As in many business endeavors, perseverance is rewarded in recruiting sponsors. Strong and continuous follow-up with several people in the organization, often involving visits to the center and to the company, is usually required after the initial contact. For a new ERC without a track record, it is a good idea to market the center's program and vision. This approach can be particularly effective with companies that have been involved with other ERCs.

As in any customer-oriented enterprise, it is important to develop systems for tracking interactions with companies and assessing the effectiveness of the industrial collaboration and technology transfer; ERCs and NSF regard this capability as vital to any center's success. A customized database or commercially available contact tracking software package (such as Act! or Gold Mine) is a necessary tool. Most centers find it useful to maintain a contact log, to augment memory and to provide reminders on follow-up action items. In planning such a system, it is important to consider who will use or access it, how it will be backed up, and what features are important. At minimum, a center needs a complete company mailing list and a procedure for keeping it current. Security issues may arise if companies require that the list be used for center activities only (a reasonable request). In designing the system, one might also plan for the impromptu reports that will be needed, such as lists of currently active member companies or current fiscal information. NSF's database and reporting requirements call for accurate data on company membership, support, and other forms of involvement, which must be validated by the university's office of sponsored research. Section 5.3.3.5 discusses program assessment metrics.

As explained in more detail in Section 5.2.5, each ERC has a staff member who is responsible for establishing and maintaining liaison between the center and its industrial sponsors. Other commonalties, discussed in this section and elsewhere in this chapter, are the establishment of membership levels, contractual agreements, fees and benefits; intellectual property arrangements with the university; and reporting and communication mechanisms.

In a multi-institutional ERC, marketing, recruitment, and retention plans must reflect not only the vision of the center, but also the cultures of the individual institutions. Universities with strong industry relations prior to hosting ERCs need not invest as much time in recruiting new companies, but need instead to develop more comprehensive communication and retention strategies that reflect upon the center as a whole. In other cases, such as when a multi-institutional ERC has more than one pre-existing industrial consortium, it is vital to develop from the start a clear mechanism for merging the consortia to ensure a seamless transition.

CASE STUDY: One ERC, associated with five institutions, has two pre-existing industrial consortia. The challenge is to develop a transitional strategy that is acceptable to the host universities of the existing consortia, transparent to industry partners with regard to commitments and benefits, and a source of start-up revenue for the new ERC. To achieve this goal, the ERC has built in a two-year transitional period, during which all industry members of the pre-existing consortia are considered members of the new ERC at a level that reflects the same financial obligations but offers expanded ERC benefits. During this period, while new industry partners pay their membership fees directly to the ERC, members of pre-existing consortia continue to make payments to their respective host institutions. To provide start-up revenue for the ERC, a contribution of one-third of this revenue is made to the ERC account. By year 3, the ERC agreement is implemented for all members and their support is paid through membership fees directly to the ERC.

Other cultural differences that need to be addressed at the beginning of a center include the degree to which the center desires to enlarge its research and education programs, the balance of academic and industrial goals, and the long-term vision. In addition, all of the center's principal investigators must support the center's mission and strategy. Many of these issues can be discussed and clarified in the development of a comprehensive marketing plan.

5.2.2 Membership Structure and Fees

All ERCs expect substantial financial support from industry. ERCs have annual memberships, with responsibilities and benefits governed by a membership agreement. Across all ERCs, annual membership fees range from $2,000 to $250,000, usually encompassing two or three membership categories with corresponding fees and benefits of membership. For small companies (often defined as fewer than 500 employees or less than $30 million in annual sales), fees are generally $2,000 to $10,000, and may be graduated. Many centers allow larger firms to affiliate either in limited ways (by research area or by specific contractual projects), with annual fees typically ranging from $6,000 to $30,000, or in a broader way (full membership with maximal rights), with fees usually ranging from $25,000 to $100,000. Industry-specific differences are important in establishing a fee structure. For instance, the computer software industry usually pays higher fees than others do. Some centers include university overhead on membership fees, while others do not. Policy on indirect costs must be negotiated with the university administration at the inception of the center and established in writing.

Membership fees are pooled and allocated to center functions according to the strategic and operational plans established by the center's leadership. Industrial members may provide additional support above the membership fees for activities such as sponsored research projects, equipment donations, intellectual property donations, or educational grants. Potential industrial members that have not joined the center, but contribute support for projects that fall within the scope of the ERC's strategic plan and are included in the Center's annual report, are not considered members but may be given another designation, such as "affiliates." Some centers use all fees to support research; some use them exclusively for support of student interns; others use membership fees for all operations.

Centers' policies vary on how fees are paid-in cash, in kind, or a combination. Single-institution ERCs may find that in-kind contributions are valuable in the early stages, when equipment is needed and relationships require nurturing, but later, when the facility becomes more fully equipped and working relationships are established, cash contributions may be required of new members.

In multi-institutional ERCs with pre-existing industrial consortia, the needs and cultures at the different institutions and industries may vary. Thus, it is important to maintain, at least initially, the flexibility to negotiate and the willingness to make changes, to arrive at a membership structure that is acceptable to all parties involved.

CASE STUDY: One multi-institutional ERC devised a three-tiered membership structure (Principal, Associate, and Affiliate) to meet the needs of industries. In addition to regular member's benefits, Principal Members have early access to the center's intellectual property. By working closely with the ERC as research champions and testbed partners, these companies are in position to help guide the center's research direction. Associate Members receive broad benefits such as the annual seminars, short courses, publications, and privileged access to the ERC faculty, students, facilities, and other outreach programs. Affiliate Members provide in-kind contributions in lieu of cash. They represent companies who are interested in having their products used and evaluated by the ERC researchers. The center presented its initial membership structure and fees to its industry counterparts for review and discussion, and received feedback with suggested modifications. After multiple meetings among the center's host universities, revisions were made to the Principal Member agreement to match the voice of industry. The center's willingness to negotiate led to agreements being approved by industry sponsors, and the roster of Principal Members began to grow.

In 1999-2000, ERCs reported corporate memberships ranging from 14 to 83 companies per center (averaging 35). The distribution of membership among large, mid-size, and small companies depends somewhat on the industry involved, but most centers have members in all three size categories. Overall, Fortune 500 companies constitute the largest proportion of the current ERC memberships (nearly half). In addition, several centers have federal laboratories as members, and some include industrial consortia. Overall, for established centers member companies provide from 25% to 55% of total income (about 30% of total income for ERCs overall).

5.2.3 Membership Rights

During its first year, each ERC develops a standard membership agreement that governs members' participation and sets out the forms of cash and in-kind contributions that constitute membership. Organizations that can be considered as members include private firms and local and Federal agencies. Organizations contributing research and educational participants in the center, such as other universities, institutes, and hospitals, should not be counted as members. An ERC should be mindful not to develop unique contractual arrangements for each company in lieu of a membership-defined program of industrial collaboration. However, member companies may augment their support to the center through directed project support or contractual arrangements. Firms that are not members but provide directed project support often are classified as "affiliates" and firms and others that provide equipment and other donations are classified as "contributing donors."

Guidelines for ERC industrial membership agreements, including example agreements, are available to registered users of the ERC Association website at <http://www.erc-assoc.org/topics/6-b1.htm>. See also Attachment A to this chapter. Standard membership agreements should address such issues as:

• Membership definition (e.g., members have nonexclusive equal access to any intellectual property developed under ERC funding; access to all meetings and workshops, interns, technical information, research collaborations, and placement of industry people in ERC labs; input into the research planning and review process; and a seat on the center's industrial advisory board)
  
• Fee clarification (appropriate membership categories and associated fee structure)
  
• Intellectual property (IP) rights (discussed in Section 5.4)
  
• Publication issues (usually governed by university policy)
  
• Membership termination (some centers require a two-to three-year membership commitment, or an extended-e.g., nine months-notice of termination to prevent undue impact of the funding shift on students' support).

One ERC reported that an improvement on the initial contract would be a provision for modifications that would not require full legal approval. For example, fees could be changed by approval of the Industrial Advisory Board (IAB) with 12 months' notification of members.

Intellectual property rights arrangements specified in the membership agreement are influenced by the type of industry, by the university's experience, and (it is to be hoped) by common sense. The type of membership structure also should influence IP decisions. If all the center's research activity is precompetitive and supported in common, shared rights for all members are appropriate. If the center has, in addition to generally supported research, special project support by a company, the arrangement should reflect that company's unique contribution and rights. In a typical center, the university owns IP and licenses are available to members. Access to licenses is based upon membership category, varying from royalty-free license to all center-developed IP to no access for any members. Other IP issues that may be included in the agreement or dealt with on a case-by-case basis include restrictions on licenses, who pays for and maintains patents, and royalty amounts. A more extensive discussion of IP rights is presented in Section 5.4.3.

5.2.4 Member Responsibilities-Boards and Committees

A center's organizational chart reflects the formal role that industry plays in advising the center. All centers have industrial advisory boards or committees that serve functions such as the following:

• Provide advice on developing the strategic plan
  
• Review overall progress against strategic goals
  
• Suggest changes to the strategic plan, research, and education efforts
  
• Identify areas for cooperation with industry or, in some cases, other institutions
  
• Discuss the strategic plan and suggest modifications based on research results
  
• Review invention disclosures and suggest patent action
  
• Critique the progress and direction of each research project
  
• Provide resources the research program may need
  
• Appoint industry speakers for workshops and seminars
  
• Carry out an annual SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of the ERC.

Because these activities are both technical and managerial, many centers have corporate advisors who come from both those groups within companies and who form two different types or levels of center advisory bodies (see case study). In most centers, the technical advisors meet formally at least twice a year; upper-level management advisors usually meet annually. A company's membership category determines how many advisors it may have and at what levels. Advisory committees may be chaired or co-chaired by industrial members, usually vote on key issues, and often have minutes and action items distributed.

The two main customers of an ERC are its students and industrial partners. It is essential, therefore, to make sure that the ERC's initiatives match the voice of its customers. One way to ensure full endorsement is to engage them in the formulation and implementation of the ERC's initiatives. The Student Leadership Council and the IAB, along with its subcommittees, are the center's best resources for support and collaboration.

CASE STUDY: In one ERC that has multi-tiered memberships, the IAB consists of all the Principal Members and elected Associate Members, with representatives from both the technical and managerial levels. To address various issues, such as IAB policies and procedures, proposal review, benchmarking, and communications, individual IAB working groups are established with specific objectives and milestones. The IAB chair, co-chair, secretary, Industrial Liaison Officer, and Center Director hold weekly brainstorming huddles. The smaller IAB Executive Committee meets via monthly teleconferences to stay abreast of progress and developments, and the full IAB gets together on a quarterly basis to discuss broad base issues. Face-to-face full IAB meetings are held twice a year, in conjunction with the site visit and the annual seminar/review. By breaking out into subgroups, the IAB members are able to share responsibilities and guide the center without feeling overburdened.

At times, some ERC members may feel the need to explore research directions that do not map perfectly onto the ERC's core research goals. It is the ERC's responsibility to meet this need by collaborating with these companies under other mechanisms, such as sponsored contract research or fellowship research. ERC industry partners should be made aware of the various collaborative opportunities and should have a clear understanding of the difference in IP policies under the various options, especially if it involves a multi-institutional ERC.

To build a partnership with industry in strengthening their ERC, each IAB is asked to carry out, once a year, an analysis of the strengths and weaknesses of the ERC in its basic features: vision and strategy, research, education, industrial collaboration, leadership, and management. The advisory board is also asked to determine whether there are any key weaknesses, constituting threats to success, or any missed opportunities that must be addressed. This "Strengths, Weaknesses, Opportunities, and Threats" (SWOT) analysis is shared with the ERC, the ERC's NSF Program Director, and later with the NSF site visit team. (See Section 5.3.3.5 for further description.)

The operations at one ERC provide a case study of the interactions between an ERC and its Industrial Advisory Board.

CASE STUDY: The Center for Biotechnology Process Engineering at the Massachusetts Institute of Technology has an Industrial Advisory Board of senior managers from leading biotechnology and pharmaceutical companies. They are in an excellent position to assess center activities in terms of both intellectual context and industrial relevance. The IAB's annual meeting provides assessment and advice on broad strategies, but not on specific details.

When financial support is requested for specific collaborative projects, the IAB members act as overseers for those commitments. Research managers, who may be the relevant IAB members or other designated personnel from within their companies, form the core of formal technical advisory groups for the various collaborative projects. These groups meet twice each year for one or two days; informal interactions occur approximately monthly. By and large, the perspective of the project research managers within their home organization is one of shorter-range goals and objectives than those with which the senior managers are concerned, a perspective with defined technological barriers. They serve as the conduit for identifying specific individuals or groups within their companies for detailed collaborations and as the interface with the company's upper management. As champions for these interactions, the research managers serve the important function of securing the necessary financial support for the collaborations.

The most effective type of interaction for rapid technology development and transfer is frequent (day-to-day) and personal (one-on-one) interaction with company researchers. Constant dialog among the ERC faculty, students, and research staff with the corporate research managers and research staff, for purposes of planning and assessment, allows responsiveness to new information from both the company and the center. These working collaborations often involve the use of company facilities and the development of new projects in response to company problems, which in turn leads to additional involvement in the center on the parts of member companies.

In considering the structure of a prospective IAB, several guidelines can be offered. First, it is important to remember that it is an advisory body. Final decisions should remain with the center management. Of course, ERCs should always try to heed the advice given by this body, but extenuating circumstances, conflicting input from other company personnel and from NSF site visit teams, and other factors may have to be integrated into the final resolution. It is also important in the early years of a center to accustom the IAB to thinking longer range; the university structure is not equipped to put out today's fires. Another key point is that research results will be commercialized only if they are relevant to industry needs. Thus, it is important to get the IAB involved in planning the research program to ensure that it will be relevant when completed.

5.2.5 Role of the Industrial Liaison Officer

Even though no standard model exists, NSF requires every ERC to have someone on staff, often called an Industrial Liaison Officer (ILO), who is responsible for establishing and maintaining a liaison between the ERC and its industrial sponsors. Each center needs to decide during the start-up and development phase how they are going to carry out this function. This section draws on the experience of several individuals who have functioned in this capacity at ERCs during various stages of center maturity.

5.2.5.1 Structure of the Position

The first consideration is what role the Industrial Liaison Officer will play in the center. If the senior faculty and Center Director are too busy or not prepared to market the center, then the ILO's role in marketing is primary. The ILO must then be someone who has the recognition and respect of both the faculty and industry, who can articulate what the center has to offer and can generate enthusiasm for it. If the center's reputation is already well-established and/or there are effective salespeople in the form of the Director and key faculty, then what may be needed is a capable, people-oriented, detail person whose primary objective is to provide customer service. He or she can make meeting and other arrangements, coordinate industrial visits, disseminate information, and deal with routine issues that may arise. In most centers, the ILO is somewhere between these two poles.

The Industrial Liaison Officer is not always a single individual. Centers staff the function of industrial liaison/technology transfer in different ways. Several have one or more professionals engaged solely in the industrial liaison effort; others use one staff person for multiple functions within the center, including industrial liaison; and a few use only faculty and students in the liaison function-although the latter approach is not recommended. Industry input suggests that having a dedicated person in this role may be the most successful model, with the greatest likelihood for maintaining consistency and improving the ERC-industry interaction. In a multi-institutional ERC with no pre-existing industry participation, it is wise to establish a single industrial liaison position. This person will be responsible for recruitment and retention of members and will serve as the single point of contact within the center for industry-related matters.

Many ILOs have experience working in industry and find this industrial perspective helpful. Most report to the Center Director and work directly with faculty, industrial researchers, and often with students. If the Director has high industry exposure, then the industrial awareness of the ERC is heightened. Visibility of the ERC is further enhanced when the Director travels extensively and gives presentations at technology meetings attended by academic and industrial scientists and engineers. The visibility and reputation of the center rise to an even higher level if the key faculty also play a role in marketing the ERC when they are on the road giving presentations. It is the nature and quality of the research that attracts customers the most.

Another ERC advantage that attracts industry is the opportunity for integrating research and education. It is thus essential for ERC industrial liaisons to ensure that their industry partners are optimizing their investment by becoming fully engaged in the ERC's education and outreach activities. Other than professional short courses and workshops, ERC industrial outreach initiatives may include internship programs, fellowship programs, mentorship programs, and industrial residence programs. The case study below illustrates a prime example of a partnership that benefits both the ERC and its industry partner in research and education.

CASE STUDY: A technical area was identified at a site visit as a weakness of the ERC. Within a few months the ERC formed a working group, with industry advisors, to address this weakness. The working group organized a workshop to bring in broader industry input and guidance. As a result, a mentorship program was established, in which ERC students were identified and designated to work directly under industry mentors. The students not only gain technical knowledge, but also learn how to correlate what they've learned with the ERC research program. This partnership has enabled a close working relationship with industry and has provided valuable first-hand industry insight for the ERC.

One concern voiced by several Industrial Liaison Officers is the lack of perceived value and recognition for their function by the university, and by a few Center Directors. One suggestion to improve the image and perceived value of the Industrial Liaison Officers within the university is to have them give regular university-wide seminars, with overviews of the technical challenges and opportunities afforded by the ERC's technology and research. Another suggestion might be to include them as members of teaching teams, to bring the industrial perspective to students in a broad range of courses.

It may be important to establish the ILO position as an integral part of the center management team during the formation of the center, even though their roles could become more critical to the success of the center as it nears the end of NSF support. The ILO should play a key role in the development of the center by providing a direct interface with industry members. Faculty/industry interaction can effectively address only engineering and science issues, while the ILO becomes responsible for nurturing the long-term relationship with the industry members. It is these relationships with industry that will become important to the center as it approaches self-sufficiency. The ILO should, above all, work to ensure post-NSF survival of the center.

5.2.5.2 Most Important Aspects of the Role

At a meeting of all ERC Industrial Liaison Officers, the following list of duties for this position was generated, grouped according to prevalence among the respondents. The ILO at any given center is likely to have many of these responsibilities, especially those in the first groups.

Nearly all respondents mentioned the following as important components of their position:

• Customer service
  
• Company recruitment
  
• Marketing the center
  
• Member relations
  
• Identifying center research activities relevant to industry needs
  
• Facilitating faculty interactions with industry
  
• Showcasing the center
  
• Membership on management team
  
• Developing informational materials such as newsletters, brochures, websites, etc.
  
• Helping to prepare annual report
  
• Collecting and organizing data for NSF indicators report.

In addition, several respondents mentioned the following:

• Managing intellectual property
  
• Representing the center on councils of other organizations
  
• Identifying new business activity
  
• Proposal writing
  
• Conference planning
  
• Customer satisfaction measurement
  
• Student/industry relations (internships, seminars, jobs, etc.)
  
• Representing the center on university committees.

Regarding the management of IP, an ILO attending the group meeting said, "I am a firm believer in the ERC concept-especially the transfer of useful technology. I also believe adamantly that the ILO needs to be actively engaged as an overseer in all stages of tech-transfer, regardless of how integrated his/her functions are in this area. Even with centers where a solid outside agency is handling the details, the ILO sits in the best seat to evaluate and facilitate the progress toward the true goal: to get new industrial products introduced into the marketplace. I think that this point needs to be stressed-that the ILO can make or break this aspect of the ERC. With all objectivity, it seems that this part of the ERC mission is the most difficult to accomplish, and the NSF needs to have a lot of successes in this column to continue to justify the program. This is what industry wants and needs."

A few respondents cited the following as important components of their position:

• Negotiating contracts
  
• Research project management and contract management
  
• Joint venture planning
  
• Preparing technical reports and abstracts.

Several centers' Industrial Liaison Officers cited "establishing and maintaining seamless linkages with industry" as being vital for the development of an integrated university-industry team working together on a research agenda. Important communications for which the Industrial Liaison Officer is the conduit from industrial members to center faculty include:

• Priority and criticality of research objectives
  
• Trend and projections of industrial needs
  
• Collaboration opportunities for the center.

Likewise, the important communications for which the Industrial Liaison Officer is the conduit from center faculty to industrial members include:

• Objectives and plans of the research groups
  
• Progress and findings of the center's research
  
• Collective experience (nonproprietary) from other members.

Loyalty to both the center and industry allows the Industrial Liaison Officer to bring together unlikely partners and facilitate the collaboration and transfer of technology in a way that increases industrial support for the center. Many find that a technical and/or industrial background helps them communicate effectively with industry to facilitate interactions, explain the benefits of participation, and communicate to the Center Director, faculty, and students how best to strengthen collaboration with industry. Given the broad responsibilities of the ILO, it is imperative that the ILO work closely with the center's Director to establish priorities and objectives to ensure that the industrial collaboration goals of the center are met.

5.2.5.3 Most Satisfying Aspects of the Role

Just as they define their job responsibilities differently, various Industrial Liaison Officers also define job satisfaction in different ways, to some degree as a function of their specific job structures within particular centers. The following quotes from Industrial Liaison Officers regarding some of their most positive experiences may provide a better appreciation of their role and the types of activities in which they are typically involved:

"Many aspects of my position are exciting, but one that provided a great deal of satisfaction was my role in persuading one of the key members of the center to continue as an industrial sponsor. This company had been a member of the center for several years at the highest level of membership and provided substantial financial support. Due to personnel changes and changes in corporate strategy, the company was reviewing the advisability of their continued participation in the center. Our center was in real danger of losing one of its most important members, and as a result of the on-going discussions, the company had become two years behind in their membership fees. This presented two distinct challenges, one being to convince them of the benefits of continuing their membership and the other to recover compensation for the previous two years. Through meetings with key personnel, we were able to document the benefits of past and continued membership, the value of a compromise plan (including benefits for paying overdue fees), and the advantages of reorganizing the company's interaction with the center. Today this sponsor is one of the leaders of the center and the industry."

"One of the best experiences I've had in my position resulted from a talk I gave about the ERC at a technical meeting. An attendee at that meeting was impressed with our research, and persuaded his company to join. A very large multi-year research contract funded by this company is now under way, and I participate in the research project by providing coordination of activities at four of our ERC universities. The research is progressing well, and the company has reported that compared with other (non-ERC) university research they've funded, this project is actually producing results. They are in fact planning a new product line based on the development of this technology, and have moved up the product introduction schedule because the research is progressing so well. I feel that this case is a validation of the ERC concept."

"I've had many good experiences, but originating an idea for a joint project with a small local company and teaming up our faculty with the company on a proposal to our state government was an exciting process of making collaboration happen. The project also involved students in a class working on a problem in this area for credit. We were successful in matching the technological need of the small company with the academic/ERC interest in creating new design methods for that particular application area. We developed a joint proposal with the company by first inviting the company vice president to a design class, at which he described the company's business and outlined the problem to the students. Student teams were assigned to do a patent search on the desired process and, highly motivated by the opportunity to work on a real-world problem for a customer, they submitted reports that summarized the patents and other research literature. One report whose quality was exceptional was appended to the proposal that we subsequently submitted jointly with the company to the state technological development program."

5.2.5.4 Most Difficult Aspects of the Role

Two difficulties plague many Industrial Liaison Officers: (a) insufficient time for multiple activities and (b) the challenge of motivating faculty members to take timely action on opportunities to interact with industry. Time management skills are an absolute requirement for success as an Industrial Liaison Officer. Lack of support staff is a serious drawback for many. Most Industrial Liaison Officers are realistic about budgetary constraints, but still would value technical support staff. Some expressed concern about having insufficient input into center budgetary decisions.

Other challenges faced by the ILOs have included:

• Mediating between industry and faculty researchers when projects don't go as planned
  
• Additional coordination among industry champions and faculty researchers on the respective campuses in the various subthrust areas, especially for multi-institutional ERCs.
  
• Having to "fire" a visiting industrial researcher while still maintaining his company's involvement and support;
  
• Protecting the intellectual property of individual companies while developing opportunities to expand industrial involvement;
  
• Learning to work with both company and university personnel in parallel to move an idea forward; and the loss of member companies from the center;
  
• Providing mechanisms for researchers and industry representatives to meet and exchange ideas that may lead to sponsored research projects in the center;
  
• Creation of a team environment where center and industry researchers can effectively collaborate and communicate on their projects.

One of the more challenging aspects of the Industrial Liaison Officer's role often involves issues regarding intellectual property. (See Section 5.4, "Intellectual Property and Commercialization.") As mentioned earlier in this section, IP rights are an important benefit of center membership for industry. However, intellectual property obligations to sponsors can also impose barriers in negotiating new joint ventures and licensing technology to other companies. It takes work to learn enough about the options in dealing with conflict of interest and how to handle rights, but these skills are at the center of the ILO's responsibilities. The following example of a problem dealing with conflict of interest illustrates these difficulties.

CASE STUDY: At one ERC, a full-time senior research associate, who was one of the designers of a specialized advanced integrated circuit board as part of his center research activities, sold the design to one company and was negotiating to sell it to a second company and another university. These transactions, which were unauthorized and illegal since the intellectual property belonged to the ERC and the university involved, were discovered as a result of an internal university audit. The Industrial Liaison Officer at the center was unsure of how to handle the situation and of the options that were available. The university's internal audit group, however, was able to provide guidance that was extremely helpful in resolving the problem. As a result, the researcher was terminated, the company that had purchased the design agreed to use it for internal research purposes only, and transactions with the second company and the other university were stopped.

5.2.6 Lessons Learned: Establishing the Program

• Developing a reliable computer-based tracking system for industrial interactions is essential.
• Developing a standard membership agreement that will stand the test of time is important.
• Building long-term industrial relationships should be the focus of substantial effort.
• Policies concerning the distribution of intellectual property rights among member companies, the ERCs, and the university should be flexible and appropriate to the nature of the industry and the membership structure.
• Because of the diversity of the role, clearly established boundaries help an Industrial Liaison Officer thrive.
• Staff support for the Industrial Liaison Officer, if affordable, can greatly facilitate the success of the center's industrial interactions.
• Support for faculty members should be restricted to those who interact with industry or are willing to begin doing so.
• Close interaction with industry is necessary to ensure effective two-way communication.
  
• Respect from faculty members is often hard to achieve in a nonfaculty role; the Industrial Liaison Officer should make special efforts-such as giving seminars-to increase understanding of his/her role.
  
• Flexibility-for example, in membership levels and fees-is essential in the start-up phase of an ERC.
  
• Effective planning is essential, but remember that one cannot plan for all possibilities, so it is necessary to remain flexible and open to opportunities.
  
• Key issues in establishing membership agreements include:
  - Complexity or simplicity of agreement vs. addressing critical issues downstream
  - Granting intellectual property rights (industry driven)
  - Identification of negotiable terms with university
  - Flexibility to negotiate vs. commonality
  - Subcontracts with partner universities (invention reporting and handling when combining ERC research sponsorship with previous or other sponsorship; division of returns)
  - Need to establish baseline agreements before implementing marketing programs
  - Recovering from earlier versions. (It is easier to expand than reduce benefits.)

If you have specific comments and questions on the contents of this site and/or its use, please contact webmaster@erc-assoc.org. To report technical problems, contact techhelp@erc-assoc.org.