The US is setting a standard with university and college education, dedicated to nurturing and supporting idea creation and innovation. Student entrepreneurs are encouraged to succeed and protect valuable IP. Are UK universities providing the same expertise and commercialising the ideas of students?
Leveraging IP in the technology boom
US technology giants seem willing to invest millions of dollars in UK start-ups that develop IP at UK universities. However, UK universities have struggled to support the research developed within their institutions and have failed to nurture and retain innovative individuals – such as Demis Hassabis. The co-founder of Deepmind developed the company’s deep learning techniques while studying at Cambridge and University College London. However, in 2014 the company was acquired by Google and Hassabis abandoned his university to work for the tech giant. More than a dozen AI researchers from Oxford and Cambridge University followed Deepmind – moving to what are likely to be better-paid roles with Google.
Despite this, new research suggests that UK universities are finally emulating the success of US institutions in leveraging IP. Data from the Higher Education Funding Council for England has found academics in technology fields are benefiting more than ever from licensing deals and the sale of spin-off companies. Universities in the UK have increased their IP-related income by 18% year-on-year, drawing £155 million between 2014 and 2015.
A change in IP attitude
UK universities are becoming smarter when it comes to licensing IP. Licensing deals allow universities to maintain ownership of the IP, but license its use. Traditionally licensing deals were negatively associated with making money from research and some academics discouraged such deals to protect their innovations. Changing attitudes have enabled UK universities to capitalise on research by licensing IP, but spinout deals are another popular alternative.
Spinout deals refer the transfer of IP to the buyer and will traditionally see a leading academic follow the IP as part of the final deal. The sale of spinoff companies is also proving profitable. Over the same time period £53 million was made in shares from the sale of spinoff companies.
For example, last month ARM Ltd purchased a company developed out of high performance computing research at the University of Warwick in an £18 million pound deal. The deal was a significant success for the Warwick Ventures, a wholly-owned subsidiary of the University of Warwick that aims to commercialise innovations produced from the university’s research. As the university still owns 4.85% of the company, the sale will provide funding for more technology research and entrepreneurial activity at the University of Warwick.
Universities are realising the potential of IP licensing deals and the opportunities to profit from spinout business. However, these prospects can only be secured if the right IP protection is in place. If the UK truly wants to compete on the global technology stage, it needs to be better at turning ideas into reality. The first step is to educate students about the importance of obtaining IP rights, while the second is about teaching universities to leverage IP more effectively and commercialise ideas that could change the world.
Do students understand the important role of IP? Read our previous blog on IP in higher education.