Academia is playing an increasingly important role in the creation of IP-protected knowledge and innovation, but technology transfer can be difficult to manage without effective processes in place. What role should universities play in the creation of IP? How should they exploit the technology they create? And what should industry be doing to help? We’ve asked five experts to express their views


1. THE ROLE OF THE UNIVERSITY
Ian Harvey, chairman of The Intellectual Property Institute and former chairman of the UK government’s Intellectual Property Advisory Committee

The primary role of any university is to educate its students. Focusing on research and investigation to push forward the frontiers of knowledge and innovation for the public good is also important. But the occasional creation of great inventions leading to the commercialisation of IP Rights (IPR) is only a by-product of this process; it’s not the reason for those universities to exist in the first place. I would be wrong for universities to discard their primary function in favour of moneymaking opportunities from IP, and that’s coming from someone who spent 20 years commercialising the IP coming out of universities at BTG.

Of course, university research is fundamental to the progress of all knowledge-based economies. Campuses are a hub of innovation, producing around many new technologies, processes and practices, funded or supported by the state, private donors or industry. As creators of the innovation, they should be benefiting from the rights that come with it, but first they have to make sure that they are put in place.

Preparation is key
There were some terrible examples in the 1980s of universities that did not recognise the importance of formalising the IP associated with their research. You must be explicit about who will own the rights to any inventions before you start; my experience is that if you leave it on the hoof, it will be too late.

The reality is that technology transfer is a complicated process and one that isn’t easily manageable by small- to medium-sized universities. Just as industry fills gaps in its knowledge or expertise base by outsourcing key tasks to third-party experts, so too should universities be looking for support in the exploitation of their IPR. Even large universities like Oxford use external companies to help

Any university technology transfer office should be equipped primarily to manage the 95% of their workload which is about externally funded research. They also need financial back-up if they select to license the technology themselves. You need money to be able to sue infringers, or at least enough to have the potential to sue; otherwise, infringers will know that you’re powerless to stop them.

In this area, UK universities are decades ahead of their European counterparts and are comparable with the majority of US universities. Of course there is always room for improvement in understanding of IP and skills, but the UK is actually far better at this than is usually acknowledged. Whether it’s Oxford, Imperial, Nottingham or Warwick, good management allows for collaborative research that aligns with, rather than detracts from, the core research of the faculty.


2. MAXIMISING PERFORMANCE
Jeff Skinner, director strategic alliances at University College London and president of the Association of European Science and Technology Transfer Professionals (ASTP)

University technology transfer is about commercialising new technologies developed from (usually) public-funded research. At the most basic level, this involves patenting inventions (thereby creating ‘property’ that can be licensed).

However, universities increasingly have access to ‘proof-of-concept’ (and even early-stage seed finance) which they use – with increasing sophistication – to develop technologies to the point at which they are more easily licensed or able to attract venture capital (as a spin-out).

University College London’s (UCL’s) Technology Transfer Office (TTO) was founded in 1989 as a one-person unit that focused purely on licensing. Over two decades it has grown, adding seed and proof-of-concep funds to its arsenal and spinning off around 50 companies, many of them venture capital backed. Now branded ‘UCL Business plc’, it employs 35 professionals and last year filed 26 patents. With a royalty income of over £2m, it is one of the few profitable TTOs in the UK.

However, it would be a mistake to measure ‘performance’ purely on profit – indeed the word ‘profit’ is itself misleading, since the investment in the underlying research (‘cost of goods’) is never factored in. The role of a TTO should be to ensure that technology developed by the (publicly funded) research base is utilised effectively for the benefit of the economy and society – and measured (somehow) by ‘impact’ rather than direct financial return to the university.

These two objectives (commercial return and impact) need not be in conflict, but they are often perceived to be so by universities and businesses. Fault lines often appear when negotiating collaborative research agreements with industry – and can easily create the tragic impression that a university is ‘difficult’ to deal with and ‘unfriendly’ towards business.

In my experience, there is fault on both sides. Universities must realise that far more commercial, academic and social/economic impact arises from the research collaborations than from pure technology transfer. Moreover, the vast majority of licensing and spin-out opportunities arise from publicly funded research, not from collaborative research.

Businesses often insist on ‘ownership’ of this IP. This is a safe position, but surely the wrong place to start. Time after time when I have intervened in negotiations, it has become clear that all businesses usually require is the freedom to use (fully paid-u non-exclusive licence), perhaps with an option to take an exclusive licence should something extraordinary – and often unexpected – result.

I prefer the ‘mutual freedom to use’ as a starting point in negotiations. This approach recognises the contributions of both parties and optimises impact, since both parties are free to ‘exploit’ the results in combination with their respective background. If the company needs exclusivity or ownership, then this signals that the university has produced a significant commercial asset (source of competitive advantage), which should be recognised by payment of an extra payment or royalty.


3. WORKING WITH BUSINESS
Gilles Capart, former chairman of ProTon Europe, a pan-European network of Knowledge Transfer Offices (KTOs) and companies affiliated to universities and other public research bodies

As industry moves to open innovation, the role of the university is becoming more important in the development and commercialisation of IP. Products and services are becoming more sophisticated, responding to higher level needs. No single company can expect to acquire a dominant position in all involved technologies. They only need enough understanding of each technology to combine them in innovative business models.

The corporate research centres of the 1970s have disappeared like dinosaurs. Companies can no longer afford to invest in generic technologies and they need to share the costs through dynamic licensing strategies. The role of displacing the frontiers of generic technologies is progressively taken over by universities and public research organisations. But for this to be successful, there are at least two conditions: excellence in research and effective knowledge transfer or exchange.

The nature of knowledge transfer is changing: it’s moving away from a linear patenting and licensing model, such as that practised by TTOs in the US, to a more interactive pattern involving collaborative research and active support of spinouts with innovative business models.

The mindset is changing
University governance is moving away from the Humboldt model whereby teachers are free to teach, and students free to learn the subjects of their choice. Stakeholders’ interests are being increasingly taken into account.

Universities, industry and TTOs have agreed on common principles to facilitate collaborative research: ‘Responsible Partnering’, which is also about aligning interests in a way that is supporting the research mission of universities.

The creation of IP is just the tip of the iceberg in university knowledge, as it indicates a much more important reservoir of knowledge under the surface, which can be tapped by collaborative research. The spin-out component using both patents and know-how has a specific role to play for testing new business models.

I am very optimistic about the growing role of universities in the knowledge economy. After all, this is one of our last competitive advantages. Technology transfer operations are becoming increasingly sophisticated – both in terms of the in-house expertise and the contracting arrangements with private suppliers. TTOs have always outsourced to patent agents, however, now they also form relationships with investors and intermediaries that can bring investment, market knowledge and marketing / business development skills. This trend is one that will continue and gather pace as the private sector realises the potential of technology generated by universities and works out how it can play useful role in expediting its passage to market.

Universities can expect too much of technology transfer. However, it is overwhelmingly a force for good. If kept in balance and manage professionally, technology transfer stimulates businesses to absorb and invest in promising technologies that would otherwise have lain unused or exploited by others.

If kept in balance and managed professionally, technology transfer stimulates businesses to absorb and invest in promising technologies that would otherwise have lain unused.

4. THE NEED TO STANDARDISE
Bianca McDonogh, IP consultant at CPA. Prior to joining CPA, Bianca worked in the life sciences department of Isis Innovation, a wholly-owned subsidiary of the University of Oxford, founded to exploit know-how arising out of research at one of the world’s premier research institutions

The errors Ian speaks of in section one of this article must also include the reality that, at present, there is no standardised methodology for how IP is exploited from universities. This was highlighted as far back as 2003 when Richard Lambert presented his independent review of business-university collaboration to the government (The Lambert Report). The media coverage that ensued focused on calls for reform in governance at Oxford and Cambridge, the unnecessary volume of spin-outs and the inconsistencies in control on the value generated by spin-outs. There are however some efforts to standardise technology transfer operating procedures.

The Praxis programme is the UK’s first national training programme aimed specifically at people working in the area of technology transfer in universities and research institutions. Courses are offered on subjects including: fundamentals of technology transfer, creating spin-out companies, advanced licensing skills, research contracts and business development, with associated workshops focusing on specialist topics. How widely Praxis is used and accepted as a standard way of working is unclear.

Does the government have enough confidence in the way that technology transfer offices are managed, to provide additional funding without any additional caveats? I doubt it. But if universities are to play a lead role in value creation from innovation, academic institutions must be given the tools and commercial guidance they need to work more like strategic businesses.

University as a business
Whatever business you are in, competition and understanding your market is absolutely key to success. The same can be said for universities. Corporations wishing to identify innovations that have revenue potential are not just sourcing third-party R&D from the traditional universities such as Oxford and Cambridge. R&D is sourced from wherever there is talent. Like most businesses in this era, we can’t ignore the formidable talent from Asia.

The Russell Group, an association of 20 major research-intensive UK universities, reported in 2004/5 that the Russell Group Universities accounted for 65% (over £1.8bn) of UK Universities’ research grant and contract income. But how do you measure the number or quality of patent publications? The use of patent scoring techniques would be hugely beneficial here. If we have the best talent but do not adopt a standardised innovation culture, then we fail to successfully exploit our ideas.

Steve O’Leary, director of International Services at UK Trade and Investment revealed at the Isis Innovation December Seminar and Dinner, the UKITI strategy plans to increase the overall R&D investment in the UK to 2.5% of GDP by 2014. The UK remains one of the most successful inward investment destinations in the world, with over 1,200 international investors setting up in the UK during 2005/6. Increasing investment is great, but without a standardised, commercially focused directive, we struggle to maximise UK academic innovation opportunities.

There are many examples of universities and businesses working as equal partners. Isis Innovation continues to sponsor Venturefest (now in its ninth year), a collaboration between academia and business to promote and manage innovation. CIP is another great example: a not-for-profit development centre founded by Chalmers University of Technology and School of Business, Economics and Law to facilitate knowledge-based business between industry and academia. We should all do what we can to integrate and align universities with our business strategies. For example, a recent patent analytics study, launched by CPA, in the area of Bioinformatics, utilised the excellent consultancy service provided by Oxford University Consulting (OUC). At OUC, academic staff partner with industry as technology business specialists. It is also an example of an excellent academic service available to corporations and law firms alike.


5. THE INDUSTRY VIEW
Beatrix de Russé, executive vice-president, IP and licensing, Thomson

To create successful partnerships with academia, it’s important for industry to be flexible and knowledgeable enough to keep on top of trends and challenges in technology transfer.

At Thomson, we operate an IP and licensing business unit within the Technology Division that supports the mass-market production of key hardware through licensing and technology transfer agreements with external organisations.

In our industry, it’s important to work with third-party research organisations to help push forward the development of future technologies. Internal research and innovation provides the foundation for many of our business units, but it is supported through licensing from and collaborative research with universities and other research institutions. We need to focus on technologies that can help develop our business, whether they be created within Thomson or as part of the research work of another organisation.

Standardisation between technologies is a driving force for much of this collaboration. By investing in joint research programmes or start-ups, Thomson is able to push forward protected innovations, such as the MPEG2, the DVD and the DVB Portable Player. We can also ensure that we play a role in the development of future technologies related to our main product line. For example, our recent investment in Novaled’s work to develop second Generation Organic-Light-Emitting-Diode (OLED) Technologies.

Identifying the source of innovation
Technology sources are identified through systematic mapping of IP activities and active networking. If an R&D organisation or technology start-up is creating technologies or IPR that fit our portfolio, then we are flexible enough to work with them to set up licensing or joint research programmes. We systematically explore all available external sources of new technologies and will invest in technologies at varying stages of development.

Often, the technology source will determine the method of acquisition or collaboration, but whatever the set-up, the allocation or share of IPR has to be explicitly assigned before we enter into a contract. The right to use the innovation has to be the driving force for all forms of collaborative research, as it represents the future of our business model.


IN THE PUBLIC INTEREST
At their heart, universities have a social contract with society. As educational and research institutions, it is their responsibility to generate and transmit knowledge, both to students and to wider society. The Association of University Technology Managers (AUTM) outlines five key points for universities seeking to license technology:

1. Universities should reserve the right to practise licensed inventions and to allow other non-profi t and governmental organisations to do so for the purposes of future research

2. Exclusive licences should be structured in a manner that encourages technology development and use and does not block access to research tools

3. Universities should strive to minimise the licensing of ‘future improvements’, as that obligation may effectively enslave a faculty member’s research programme to the third-party company

4. Universities should anticipate and help to manage technology transfer-related confl icts of interest. They should also be
mindful of export laws and regulations

5. Universities should consider including provisions that address un-met needs, such as those of neglected patient populations or geographic areas, giving particular attention to improved therapeutics, diagnostics and agricultural technologies for the developing world. For further information, visit www.autm.net.


TRANSFER BY NUMBERS
In 2005, the Association of University Technology Managers (AUTM) recorded the following activity in the US:

• US$42bn+ in R&D expenditures in US academic centres in 2005
• 4,932 new licences signed in 2005
• 28,349 current, active licences. Each single licence represents a one-on-one relationship between a company and a university
• 527 products introduced into the market in 2005; 3,641 since 1998
• 628 new spin-out companies created in 2005. That is 1.7 new companies every day; 5,171 new spin-outs since 1980

THE FUTURE
Just as universities are influencing industry through their robust research, so can business guide them in the creation of sound strategies for the development and commercialisation of their IP. Mutually beneficial agreements and the use of strong and proven processes could make technology transfer programmes more obtainable to universities and businesses alike. It is this combination of erudite knowledge and commercial expertise that will most certainly drive an exciting future for research and innovation.


This article first appeared in IP Review, issue 19

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