Spring 2003

Carmel-Haifa University Economic Corp. Makes Knowledge 

Available to the Public

In the university world, it’s publish or perish, as most everyone knows.  But how many of those scholars who publish realize that the royalties that their books may earn actually belong to the university where they teach?

        The stunned silence that this question evoked from one professor was typical.   He need not worry, however—even aside from the fact that scholarly books rarely enrich their authors.  “Books are traditionally exempted,” said Shlomo Harel, managing director of Carmel-Haifa University Economic Corp. Ltd.  Carmel , which the University set up in July 2002 as a profit-making affiliate of the University, engages in the business of technology transfer—from the academy to industry.  Harel’s job is to see whether the University, and hence its researchers, can benefit financially, not just academically, from intellectual property—that is, from its researchers’ work.  

        “Whenever a faculty member gives advice to a company or tells it about a new methodology or algorithm, this information—intellectual property—rightfully belongs to the University as the researcher’s employer,” Harel explains.  It is just like the work of an employee of any company, he adds.  Whatever is produced belongs to the employer.

        Harel, a member of the Association of University Technology Managers, sees his task as both preserving intellectual property rights for the University and increasing the value of products created by its researchers.  An offshoot of this dual task is to implant the notion of the commercialization of ideas in faculty members, who are generally more interested in publishing a paper than preparing a product.  He gave Focus two examples.

        Two Israeli entrepreneurs approached Prof. Solomon Wasser, a member of the University’s Institute of Evolution who is one of the world’s leading mushroom experts [see Focus, Summer 2002], about developing a certain process to grow mushroom on waste materials abundant in Israel .  The entrepreneurs had read about his work with fungi.  The entrepreneurs were prepared to offer the researcher a fixed sum in return for what amounts to a transfer of knowledge. 

        In this particular case, which occurred before the Carmel Corp. was set up, Shlomo Harel, who acted at that time as a consultant to University President Hayuth, thought that the entrepreneurs should give the University both royalties on sales of products developed from the process and shares in the company set up to produce and market them.  Wasser had developed the process as part of his research at the University on the use of fungi for pharmaceuticals.  An agreement was worked out that led in effect to the creation of a University start-up.  If the products succeed, Harel remarks, then the University will gain a good profit.

        A researcher stands to benefit in the second example that Harel cited.  The University of Minnesota funded a UH psychologist to translate into Hebrew the well-known MMPI intelligence test.  The psychologist did this, adapting the test questions to the Israeli culture.  The Hebrew MMPI-2 test started to sell, and the researcher received no personal remuneration for his work; instead it went to his lab.  The payment was now considered a research grant, and UH took its usual overhead.   

        That would have been the end of the story, were it not for Harel.  He pointed out that the Hebrew version was not a mere translation.  The University was given distribution rights for it.  Harel also raised a question of who owns what.  It seems that the psychologist had been writing summaries based on the test results and sending royalties from their sales to the University of Minnesota ; he had also been paying the American institution for the right to use the information.  The Carmel Corporation’s director explained that these summaries were really the researcher’s, and Minnesota should not have received any payments for them.

        In the United States , the development of intellectual property into marketable products has been going on for the past two decades.   Certain products, especially those emerging from science labs, have on occasion gained big bucks for a university as patent holder, investor in, or joint owner of a company set up to market the discovery.  U.S. academic institutions scored a breakthrough, in Harel’s opinion, when the Bayh-Dole act of 1980 was enacted, allowing them to record patents for products whose development the U.S. government itself financed.   

        The University of Haifa is not the first Israeli higher education to set up an economic office or enter the business of commercial start-ups.  Until recently, however, its humanities and social sciences orientation seemed to exclude it from these profit-making avenues.  Two things have changed the thinking, however.  One is that science, notably biology and computer science, has been slowing advancing at the University. 

The second is the establishment of the University’s Carmel affiliate and, perhaps, Harel himself.  A former manager of the Israeli Military Industries’ Rocket Propulsion Lab, he holds an MBA and an undergraduate degree in chemical engineering.  He also served as economics minister in the Israeli consulate in New York .  He came to the University after directing a start-up company in biotech and heading "Yeda," the Weizmann Institute's tech-transfer company.

“This University and its researchers are very creative,” he offers when asked about its profit-making potential, “so I am very optimistic.”  He lists a math project that will, he hopes, soon lead to a start-up.  He mentions the Faculty of Social Welfare’s existing and planned clinics in speech and language and in occupational and physical therapy that do and will serve the community at large.  He points to the Actuarial Department, the only one in Israel, which wants to establish a center to handle the surveys that it has already been asked to conduct, such as by the National Insurance Institute,  Israel’s equivalent of the Social Security Administration.  He names the University’s Brain and Behavior Research Center as still another good source of commercial potential.

All these possibilities, Harel admits, will take time, but he is sure they will lead to all sort of “products.”  It will then be up to the University to decide where to take them, he says.  Besides their commercial value, providing the University with an additional source of needed revenue, he looks upon these ventures, which are the product of research, as “returning something back to the community.”  The University stands to gain in other ways, too.  As he sees it, “If it [one of these research-based commercial ventures] grows, the University’s reputation will also grow.”

In the meantime, Harel tries to expand commercial thinking among academic researchers.  He wants them to think of Carmel-Haifa University Economic Corp. as an “applied filter” for their ideas.  “Perhaps an idea, like tourist enclaves [from the Center for Tourism Research] or an environmental study [from the Environmental and Natural Resource Study Center ] will interest some country abroad,” he says. It sounds like an argument he uses when meeting with faculty members in the different departments to create an awareness of his office.

Undoubtedly he tells them that the University will not ask for a 50/50 split on royalties from their books.

Carmel-Haifa University Economic Corp. Ltd. is a for-profit affiliate of the University.  It is not a unit of the University, but a limited corporation in its own right.  For the time-being, the University is financing its activities.  Shlomo Harel occupies a part-time position, and his staff consists of one secretary.  The corporation’s board of directors consists of a chairman, Mr. Gil Weiser, who is Chairman of the University’s Executive Committee; and two directors: Prof. Yehuda Hayuth, President of the University, and Prof. Moshe Zeidner, Dean of Research.