Transcript International Perspectives on Public Research Organizations and Industry Partnerships: Laws, Models and Policy Options Guriqbal Singh Jaiya Director, SMEs Division World Intellectual Property Organization www.wipo.int/sme [email protected].

International Perspectives on Public Research
Organizations and Industry Partnerships:
Laws, Models and Policy Options
Guriqbal Singh Jaiya
Director, SMEs Division
World Intellectual Property Organization
www.wipo.int/sme
[email protected]
The Starting Point:
Defining Innovation
• Invention v. innovation
• Sustaining v. disruptive innovation
• Incremental v. radical Innovation
Nature of Disruptive Technology
• Less profitable in the early years
• May need long periods of time before market
introduction (health care)
• Need mass market acceptance to achieve full
value
• Cheaper, smaller, simpler, more convenient
The Knowledge Economy
• Protected knowledge now at the core of
company valuation
• Intangibles are now driving market
capitalization
• No diminishing returns
• Increasing returns possible
• Network effects
The Knowledge Economy
• In certain industries, patents significantly raise the costs
incurred by non patent-holders wishing to use the idea or
invent around a patent – an estimated 40 % in the
pharmaceutical sector, 30 % for major new chemicals, and
are thus viewed as very important.
• However, in other industries, patents have much smaller
impact on the cost associated with imitation (e.g., in the 7 – 15
% range for electronics) and are considered less important for
protecting investment.
Source: Mansfield, Imitation costs and Patents, in The
Economics of Technical Change, 1981
Knowledge Supply Chain
• Universities and
industry
generate
knowledge and
transfer
knowledge.
• Barriers
between the two
cultures impact
the ability to
create new
knowledge to
satisfy society.
The Knowledge Process Today
• Partners need to
understand how
they fit in an
integrated
knowledge
process.
• Each partner is
responsible to
help others
succeed.
• Partners must
be part of a
continuous, free
flow of
information and
knowledge.
•
•
The Knowledge Process of the
Future
Outcomes for
industry
include more
effective
access to
knowledge =>
reduced
technology
development
cycles.
Outcomes for
universities
include
increased
funds and
capacity for
pursuing
relevant basic
research.
Technological Change –Technology
Push versus Market Pull
Emerging Customer
Segments
New Customer
Needs
Technological
Change
Entrepreneur
Unsatisfied Existing
Needs
New Methods of
Manufacture &
Distribution
Higher
Productivity &
Economic
Growth
Technology Push: Looking for a Problem
Primary Disruptive
Technologies for Next Decade
• Gene Therapies
• Nanotechnologies
• Wireless
• Other ??
Importance of radical innovation
• Because it was in disruptive technologies that
productivity growth was highest over the last 4
decades
• Information and Communication Technologies
• Biotechnology
• Most of this productivity growth achieved by new
players, not by existing companies
• PROs well suited to drive radical innovation
Impact of Open Innovation
• Historically, internal R&D was a strategic asset
• Nowadays, companies commercialize both their own
ideas/inventions as well as those from others; for example,
of other companies, public research organizations (PROs)
and research universities
• Industries embracing open innovation view public
research organizations (PROs) and research universities
as a source of graduates and applied research
• Researchers in companies have shifted to advanced
technologies and product development
Open Innovation Interfaces and
Boundaries
• Cultural differences
– Successful partnerships have researchers in companies working with
researchers in the public research organizations (PROs) and research
universities
• Communication channels, working relationships
– Creating a company culture where external contributions are accepted
• Functional organizations with specific responsibility to manage the
external technology and research function
– Example of Hewlett-Packard University Relations
• Work pace, expectations
– Since private R & D labs work more quickly, a company may establish a
small-firm channel to take advantage of the speed difference
– MIT Industrial Liaison Program manages university research to meet the
expectations of corporate sponsors
Competing on the Global Stage
• Significant attention is needed to address the issue of whether human
capital will be built within the US or outside the US.
• America’s information and technology workers are being forced to
compete with an exploding population of lower paid, skilled workers
around the globe.
• US industries based on physical science and engineering face acute
shortages of people and new ideas, forcing us to either import foreign
researchers, or export our R&D facilities
• Research conducted at foreign universities provides a source of highly
talented graduates, who increasingly stay in their own countries and
compete with us
• To stay ahead in a skills-based economy, American companies and
universities must work together to invest in developing the most skilled
and flexible workforce in the world
Global R&D Migration
• The shift to emerging economies first occurred in textiles
and other manufacturing jobs, followed by low-end
services such as telemarketing and data entry. Now it is
moving up the labor food chain to R&D jobs
• Debate over migration of white-collar jobs overseas is
misguided
– Proponents say it’s a win-win for America and its trading
partners
– Opponents say it’s a race to the bottom that will destroy
America’s middle class
• Jobs are flowing to Asia, Eastern Europe and elsewhere.
Short of a radical change in policy – say, a complete halt
to international trade – information age jobs will
continue to shift overseas
The IP Problem – A
Relationship in Crisis
• The partnership between industry and universities has been weakened
over difficulties associated with negotiating IP rights in research
contracts in recent times
• Largely as a result of the lack of federal funding for research,
American Universities have become extremely aggressive in their
attempts to raise funding from large corporations
• Industry feels that it takes too much time, effort, and money to
negotiate an agreement
• This has resulted in a perceived deterioration of trust and goodwill
between industry and US universities, adversely affecting the longterm partnership between industry, universities, and government
A Silent Breaking
• Given that negotiations with an American university can take more than a
year, the idea is often valueless before an agreement can be reached, and the
company often spends more in legal expenses than it would be able to pay
in royalties.
• This can lead to a company just walking away from the negotiation, and
declining to sponsor any further research at that university.
“Typically at present, negotiating a contract to perform collaborative research
with an American university takes one to two years of exchanging emails by
attorneys, punctuated by long telephone conference calls involving the
scientists who wish to work together. All too often, the company spends
more on attorneys’ fees than the value of the contract being negotiated. This
situation has driven many large companies away from working with
American universities altogether, and they are looking for alternate research
partners.”
Stan Williams
Director, HP Quantum Science Research
Consequence: Global Migration of
University Research
•
Many large companies in developed
countries are finding other sources of
ideas and bright young researchers in
emerging countries, where they
receive very favorable intellectual
property agreements.
“Large US based corporations have become so
disheartened and disgusted with the situation
[negotiating IP rights with US universities] they
are now working with foreign universities,
especially the elite institutions in France, Russia
and China, which are more than willing to offer
extremely favorable intellectual property terms.”
Stan Williams
Director, HP Quantum Science Research
IP Relationships With Foreign PROs and
Research Universities
• Public Research Institutes (PROs) and Research Universities in China,
India and Russia offer very attractive terms for research partnerships
with US companies (research by purchase order).
“Many high quality foreign universities are very eager to work with American
companies, and by keeping attorneys out of the discussion completely they have
streamlined processes to allow a successful negotiation to take place in literally a
few minutes over the telephone. It is possible to specify what one wants to a
professor at a university in China or Russia and then issue a purchase order to
obtain a particular deliverable. The deliverable is received and verified to be
satisfactory before the American company pays for it, and in this case the
American company owns all rights to the deliverable and the process by which it
was created.”
Stan Williams
Director, HP Quantum Science Research
Move Towards Open Archiving
• Cultural Differences: Defensive Publication
• Open Journals: Library function
• In the digital environment, increasing self
publishing on the Internet
• Internet, web sites, open innovation, open
archiving and public disclosure
Which way should Public Research Organisations
(PROs, including universities) go ? – Legal basis - USA
• Bayh-Dole Act P.L. 96-517 as amended
• Stephenson Wydler Technology Innovation
Act P.L. 96-418
Bayh-Dole Act:
• Doing away with 26 different regulations
used by public US research funding bodies
• For the first time, a uniform policy was
implemented that provided the contractor
with the opportunity to elect to retain title
to inventions
Which way should Public Research Organisations
(PROs, including universities) go ? – Legal basis - USA
• If contractor retains title, obligation to exploit
arises; reporting requirements
• Although US university were patenting before
Bayh-Dole Act, but patenting and especially
licensing rose by about 20 times in the last 20 years
• Government has march-in rights and may require
a non-exclusive license for its own purposes
• Just giving ownership to industry contractors does
not necessarily stimulate use in the markets
Which way should Public Research Organisations
(PROs, including universities) go ? – Legal basis - USA
“…to replace the existing melange of 26 different
agency policies on vesting of patent rights in
government funded research….with a single,
uniform national policy designed to cut down on
bureaucracy and encourage private industry to
utilize government funded inventions through the
commitment of the risk capital necessary to develop
such inventions to the point of commercial
application.”
Source: House Committee on the Judiciary, 1980
Which way should Public Research Organisations
(PROs, including universities) go ? – Legal Basis
• In the EU, concern that different national laws
regarding the ownership and exploitation of IP from
PROs, especially at universities, may create barriers to
international collaborative research
• Austria, Denmark, Germany and Norway have recently
introduced new legislation to grant universities title to
IP resulting from publicly funded research
• In Finland, proposals to the same effect
• In Japan and Korea, recent reforms in funding
regulations to this effect
• These policy trends echo the landmark US Bayh-Dole
Act of 1980
Source: OECD, Turning Science into Business, 2003
Which way should Public Research Organisations
(PROs, including universities) go ? – Legal Basis Internationally
• Either there is employer-employee law defining
ownership (Germany, Austria)
• Or there is just common law/case law/individual
agreements (US)
• Or there is some regulation in patent law defining rights
of the employee (UK, France)
• And then there are research sponsorship agreements
(do not affect employer-employee relation but define
ownership and exploitation framework in projects
funded with certain - public – funds)
• On the European level (research framework
programmes) such sponsorship agreements can become
extremely complex as these are generally consortium
deals involving numerous partners
Which way should Public Research Organisations
(PROs, including universities) go ? – Some aggregate US Data
•
•
•
•
•
•
•
Gross license income: 1.337 billion $
10,866 licenses yielding income
Invention disclosures: 15,573
Total US applications filed: 12,929
New US applications filed: 7,741
US Patents issued: 3,673
Start-up companies formed since 1980:
4,320; still operational: 2,741
Source: AUTM Licensing Survey 2002
Which way should Public Research Organisations
PROs (incl. universities) go ? – Some Data on the US
•
•
•
•
•
•
University of Florida
369.25 M $ sponsored research
207 US patents filed in FY 2002
59 new licenses / options executed
31.6 M $ gross license income
62 US patents issued in 2002
5 start-up companies formed in 2002
Source: AUTM Licensing Survey 2002
Which way should Public Research Organisations
PROs (incl. universities) go ? – Some Data on the US
•
•
•
•
•
•
•
Columbia University
Research budget : 200-400 M $
407.4 M $ sponsored research
191 US patents filed in FY 2002
55 new licenses / options in FY 2002
155.6 M $ gross license income
60 US patents issued
8 start-up companies formed
Source: AUTM Licensing Survey 2002
Intellectual Property Licensing
by PROs in Germany
• Fraunhofer, and to a lesser extent Helmholtz and the universities, focus
heavily on collaborative R&D
• IP positions regularly compromised as a consequence
• Only Max-Planck (Garching Innovation GmbH) and Fraunhofer Patent
Center achieved maturity (major revenues, involvement in litigation,
management of big portfolios) in IP licensing
• After abolishing the Professor´s privilege in 2002, 18 regional IP
licensing companies formed with federal sponsorship
• Each of these companies works with a number of universities in the
respective region
• These programmes have remained marginal so far
• Both industry as well as some public research organisations are trying
to undermine these activities by the universities
Patent applications of German
PROs
2000
Universities
Max Planck Society
Helmholtz Association
Fraunhofer Society
1800
1600
number
1400
1200
1000
800
600
400
200
0
70
72
74
76
78
80
82
84
86
88
90
92
94
96
98
00
year
Source: Turning Science into Business, OECD, 2003
Which way should Public Research Organisations
PROs (incl. universities) go ?
• No University licensing data available in
Germany
• Reason: Up to 2002, licensing was mainly done
by the individual inventors because of the
Professor´s privilege
• However, a 1996 study for the Federal
Ministry of Science showed that 60 % of the
inventions were assigned to industry partners
– in most cases without or with minimal
compensation
Source: Becher, Gering, Lang, Schmoch: Patentwesen an
Hochschulen, BMBF 1996
Which way should Public Research Organisations
PROs (incl. universities) go ? - UK
• Commercialisation activities in the university sector have substantially
increased in the last five years
• Many universities created technology transfer offices only in the late
1990s
• Staff numbers are still rising by almost 25 % per annum
• Internationally, the UK lags behind the US in its expertise in technology
transfer, although the UK is ahead of much of the rest of Europe
• Lack of clarity over IP in research collaborations
• A minimum of annual investment in research needed in order to justify
a technology transfer office; only 25 % of UK universities seem to have
such critical mass, yet 80% are now running their own offices
• Still struggling with restructuring after BTG disappeared as the sole
solution in 1985
Source: The Lambert Review of Business-University Interaction,
December 2003
Which way should Public Research Organisations
PROs (incl. universities) go ? – Other notable models
•
•
•
•
Chalmers University in Gothenburg, Sweden
Privatized the whole university; now operates as an AB
Technology transfer is a huge operation being responsible for
all contract research, an incubator, a technology park, etc.
But Sweden lived under a Professor´s privilege system
which is still very much defining the mindset
Private IP exploitation company in the incubator
University of Twente, the Netherlands
• Probably the European University concentrating most on
spin-off creation very early on (1980s)
• But again, Intellectual Property Management on behalf of
the University is not at the centre stage in this effort
How to position a PRO in the
market
• What is the customer base?
• Are the customers prepared, able and willing to
do R&D collaborations?
• Does this apply to all technology sectors the PRO
represents?
• Or do you have to use a custom approach in
different technological fields?
Local, Regional Customer Base
• Mainly SMEs ? High Tech ?
• Multinationals ?
• Incentives available ?
• Government co-financing ?
• Taxes ?
Local, Regional Customer Base
• What do you do if there is no such thing ?
• Multinationals ?
• Engage in company formation and business
development ?
• But that changes the requirements completely
!
Requirements
• What is it? Technology Transfer or commercialization
is a parallel process of radical and incremental
innovation, the determination of technical and business
feasibility, the creation of intellectual assets, and the
development of a plan to enter the market.
• Why do it? To build sustainable companies
Requirements
• You will only be able to attract investors if your
Intellectual Property Management (IPM)
approach is effective
• IP in general, trade secrets and confidential knowhow are the building blocks for such an IPM
program
• That makes the national legal system regarding
ownership and exploitation of PRO results so
important. If you cannot manage your IP assets
effectively for the sake of the investor you will
have no business !
Key Findings
1. Technology Transfer, IP management and licensing by PROs
should be seen in the broader perspective of how the
individual, national research and innovation system is
structured.
2. More collaborative research and research funding by
industry will make it more difficult to maintain freedom to
operate.
3. If freedom to operate exists for PROs, mature programmes
require significant lead time and professionalism.
4. OECD 2003 (Turning Science into Business): On average,
PROs engaged in Intellectual Property Asset Management need
more than seven years to break even.
5. US-Policy considerations: Jobs created (more than 300000),
3 billion in taxes generated (1 billion royalties).
Source:AUTM
Setting a Mission
•
•
•
•
Transfer of technology for society’s use and benefit
To generate income; net return on investment
Regional economic development and job creation
To recruit, reward, and retain faculty and/or
researchers
• To develop relationships with Industry
• To facilitate formation of Start-up/Spin-out firms
Intellectual Property Management in
Public Research Organizations (PROs):
Objectives
• Maximizing Public Good (social return)
or maximizing financial (private) return
• Internationally, even the leaders in
technology transfer have managed to
create revenues of up to 5 % of their
research expenditures
• Social returns must be given due weight
in the overall analysis
Methods of Technology
Transfer
•
•
•
•
•
•
Graduated Students/ Ph.D. Students
Publications
Conferences
Visiting Scholars/Industry Visitor Programs
Industrial Affiliates Programs
Research Sponsorship, Contract Research and
Faculty Consulting
• Licensing to Established Companies and to StartUp/Spin-off Companies
Inventor’s Role in Tech
Transfer
• Disclose Inventions
• Identify Potential Licensing Prospects
• Participate in Patent Preparation
and Prosecution
• Host Visits by Potential Licensees
• Provide input into the licensing strategy
• Consultant (optional) to Licensee(s)
Major Issues for TLOs
•
•
•
•
Organizational Issues
Scope of Service Issues
Policy Issues
Empowerment Issues
Key Organizational Issues
• Government IPR Policy Framework: S & T, Innovation
• Legal and Regulatory Framework: National, Institutional
• Organizational Structure or Form of TLO:
– Part of PRO or University
– One-to-one or One-to-many
– Separate from PRO or University (for example:
Foundation, Trust, Company, etc)
– Reports to whom
• Service Model: Legal, Administrative or Marketing
• Location: Distance between TLO and Institution
• Funding of TLO: Financial support; self-supporting
Scope of Service Issues
• Invention Evaluation, Patenting, Marketing, and
Licensing (Basic Functions)
• Advisor and Educator on Intellectual Property
• Negotiate/Sign Industry Research Agreements
• Negotiate/Sign Material Transfer Agreements
• Actively Assist in Start-Up Company Formation
Competitive Strategy: Every
Institution
Develops and/or Acquires
Tools and Technology
Expensive
And
Risky
Make
Buy
Develop
License
Quick
And
Less
Costly
Market Validation Study
& Identify Potential Licensees
• Identify viable commercial partner
– Identify key markets
– Identify potential licensees
• Resources used to identify partner
– Researchers/Technologists
– San Diego State University – Entrepreneurial Management
Center (EMC)
– TechLink
– Business network
• Have expanded program to work with government
technologist and companies across the country
Market Analysis with Licensee
• EMC performs analysis for specific markets
discovered
• Outside expert consultants used where possible
• SSC SD funds scientist labor and travel to work
with licensee
• Market analysis provides independent
information to help company with decision to
proceed with licensing of technology
Key Policy Issues
• Ownership of Intellectual Property
– Patents and Know-how/Trade secrets
– Copyright, Industrial Design & Trademark
– Plant Breeder’s rights
• Incentives to Disclose Inventions
– Royalty Sharing; Consulting; Research Funding
• Conflict of Interest & Conflict of Commitment
– Institutional
– Individual
University/Industry
Partnership Lesson
“Of 3200 universities, perhaps 6 have made significant
amounts of money from their intellectual property
rights.
IP rights should be pursued as a means for interaction
with industry rather than as a means for raising
revenue from commercialization.”
John C. Hurt
National Science Foundation
Sharing of Licensing Income
(After patent expenses are reimbursed)
Inventor/
Creator
Inventor’s
Lab
Inventor’s
Dept
Inventor’s
School
Tech
Promotion
Fund
Tech
Research
Fund
U Central:
First $100K
per year
50%
10%
0%
30%
10%
0%
U Central:
Above $100K
per year
40%
10%
10%
25%
5%
10%
VUMC: First
$100K per
year
50%
0%
20%
20%
10%
0%
VUMC:
Above $100K
per year
40%
0%
25%
20%
5%
10%
Revenue Sharing From IP Exploitation
Cumulative
net income
Invent
or
Department
R&D
Directorate
Trust
First
£50 000
50%
10%
20%
20%
Next £100
000
40%
10%
25%
25%
Next
£100 000
30%
10%
30%
30%
Over
£250 000
25%
10%
32.5%
32.5%
Note
In practice, Trusts are recommended to consider sharing the revenue of their
associated University as the basis for their own policy. By doing so, the potential for
conflict within inter NHS/University groups is reduced.
Issues to be Considered in
Negotiations
• Which party initiated the idea?
• Who is contributing financially: Money,
Equipment, Feedstock, Supplies ?
• Who is contributing technically?
• Cost of the overall development program?
• Cost to bring it to market?
• Risks: Who pays for the failures?
Who is Best Suited to File for Patents?
Industry
– Full time experienced staff
– Focused on market segments
– Can select the proper foreign
filing
– Works with the people who are
developing the use and market
– Knows where the technology can
be applied to similar
opportunities.
University
– Has experienced staff but is
spread thinly
– Communications between the
scientists and IP personnel is
more distant
– Scientist is not connected to the
market
– Do not foreign file due to costs, limited protection
– Their market is industry
Industry thinks it is best suited.
Five Types of IP Arrangements
1) Industry owns the IP generated as a result of
the collaborative research.
2)Industry owns the IP but allows the University
to continue with development for research
purposes only.
3) The University owns the IP but industry has
exclusive rights.
4) The University owns the IP but the business
has exclusive rights in a narrow field of use.
5) the University owns the IP but offers the
technology non-exclusive, royalty free.
The Industrial Model
Intellectual property
Proprietary position
Competitive advantage
Acceptance in the
Market place
Unique product
Innovation
Equity Participation Model
Investor A for 33% with
$2MM Investment
Investor B for 33% with
$10MM Investment
License Agreement
from University
•54% Tech Founder
($3.24mm)
•100% Tech
Founder
No Valuation
•80% Tech Founder
•20% University
Value of Technology
•13% University
($.78mm)
•33% Investor A
($1.98mm)
~$6MM Valuation
•36% Tech Founder
($10.8mm)
•9% University
($2.7mm)
•22% Investor A
($6.6mm)
•33% Investor B
($10mm)
~$30MM Valuation
IPO raising $30MM
•28% Tech Founder
($42mm)
•7% University
($10.5mm)
•17% Investor A
($25.5mm)
•28% Investor B
($42mm)
•20% Public Market
($30mm)
~$150MM Valuation
**Every investment accepted by the company in exchange for equity serves to establish the valuation of the company.
Empowerment Issues
•
•
•
•
Signature Authority for License Agreements
Review Committee: Is it needed?
Legal Review: When is it needed?
Authority of Licensing Officers/Associates
–
–
–
–
Evaluation
Patenting
Marketing
Negotiating terms of the License
Intellectual Property Management by
PROs
Link to
Venture Capital
Technology Pool
Cooperative R&D
mature companies
Licensing
Non-exclusive
Who owns what?
Start-Up Companies
Exclusive
Joint Venture
Quasi-exclusive
Field of Use
Equity
Commercialization Through Licensing
• License
• Technology
• Potentially people
Licensor
Licensee
Sales
Product /
Service
Development
• Lump sum License
Fee
• Royalty
Market
Revenue
Which way should Public Research Organisations
(PROs, including universities) go ?
• Historically, in the US little co-operative R&D
• More focus on licensing and start-ups (beginning
in about the mid 1980s); an effect of Bayh-Dole
Act in the US
• In Europe, much more interest in project based
co-operation with the private sector: one example
is the European Framework Research
Programmes (FP 6)
• Limited IP and licensing infrastructure at most
European PROs
• In recent years, both sides trying to adopt some
of the features of the other model
Which way should Public Research Organisations
(PROs, including universities) go ?
• Historically, little co-operative R&D in the US
• “Throughout most of the 1960s and 1970s, the
business community was the source of 3% of total
research performed in universities.”
• “By the mid 1980s this had risen to 6 % and in the
1990s to 7 %.
Source: Wendy H. Schacht, CRS Report for Congress; R&D
Partnerships and IP, Implications for US Policy, December
2000
Which way should Public Research Organisations
(PROs including universities) go ?
“The preferred mechanism of German industrial
support for academic research is a research
contract with clearly defined deliverables. In the
US, most industrial funding of academic R&D
takes the form of grants, more open-ended
arrangements without specifically defined research
deliverables……..”
Source: Technology Transfer Systems in the United States and
Germany, Lessons and Perspectives, German American Academic
Council Foundation, National Academy of Sciences 1997
Which way should Public Research Organisations
(PROs, including universities) go ?
“….the panel judges university-industry
research interaction in Germany to be more
heavily oriented toward short-term, incremental
problem solving than university-industry
linkages in the United States.”
Source: Technology Transfer Systems in the United States and Germany,
Lessons and Perspectives, German American Academic Council
Foundation, National Academy of Sciences 1997
Which way should Public Research Organisations
(PROs, including universities) go ?
• Some European Research
Universities now receive up to
40 percent of their research
budgets from private sources on
a project contract basis
Private Funds
• Example: RWTH Aachen
• Total budget (excl. hospital):
367 Mio €
• Research Budget: 142,5 Mio €
Source: RWTH Drittmittelreport
2003
Government
EU
German Science
Foundation
Critical Ingredients
for a Thriving Environment
•
•
•
•
•
•
Strong, diverse research programs
Technology Transfer
Business start-up facilities
Research Parks
Access to capital
Management
Major Findings from the DEST
Report - I
• Australian universities: significantly strengthened their
research commercialisation capabilities, performance.
• Scale is crucial:
– effective research commercialisation requires sufficient portfolio of
research,
– Commercialisation function: requires breadth and depth of capacity.
– a significant challenge to smaller and regional universities.
• Access to pre-seed capital - the most common financial need
for universities in research commercialisation
Major Findings from the DEST Report - II
• Licensing of IP: the most common form of research commercialisation
– generates most revenue, well done, lower risk.
• Australian industry:
– fragmented, small size and low R&D investment
– poor capacity to absorb university-generated technology
– linkages have to be established with overseas firms.
• Creation of spin-off firms an important commercialisation mechanism
– holds and develops IP with high return potential
– Common in the biosciences and IT fields.
– Spin-offs that generate a huge growth in value, are rare.
• Commercialisation hubs:
– key role in transforming knowledge into economic value
Australia: What is ATP Innovations?
• A commercialisation hub:
– commercialisation of innovative Australian technologies
– focussed on technology business development
– A hub for the innovation & commercialisation community
• Technology convergence encouraged:
– Information & Communications Technology
– Life Sciences: Biotechnology & Biomedical
– Micro & optical electronics
• Provides time intensive resources that start-ups may not always be
able to access from their technology commercialisation office
• A resource to be utilised
• A partner in business development
ATP Innovations addresses the
needs of start-up ventures
•
•
•
•
•
•
Sydney metropolitan location, regional outreach
Owned by 4 major universities
Clients: public and private sectors
Currently 25 clients, 11 anchor tenants
Full facilities, 7000 m2 space, 85- 95% occupancy
Full business support program suite – bizStart, bizConnect,
bizNetClub, bizCapital.
CEO: Mark Bradley
Dir. Business Programs: Charles
• Operates to world best practice
Lindop
• Connected technology community
Dir. Biobusiness Programs: Paul
Field
CFO: Charles Summers
ATPi Commercialisation
Process
Applicants accepted
Graduate
Realistic
Business Plan
 Market Validation
 Customer Management
 Business Expansion
• After ~ 3 years
• Space >125m2
• >20 staff
• Proven/strong / credentialed
Professional development, forums, workshops, Networking
events
ATPi - University Technology
Commercialisation Partnership: a Model
University Commercialisation Office
Researchers
create IP
Consultation with
Commercialisation
Office
Company Graduates
Assessment
Made
IP Abandoned
Go/No Go
License
Agreement
IP Protected
Commercialisation
Process
ATPi Joins
Project
team
Start-up Moves to
ATPi business
precinct
Decision to
create Start-up
Start-up Company
Created
ATPi: Start-up
Seed Capital provided
ATPi: Start-up
Rent Relief provided
What is TrusTECH?
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
o
o
o
TrusTECH is a DTI Biotechnology Exploitation Platform (BEP)
Challenge Programme, funded for 4 years
TrusTECH is a partnership between
Central Manchester & Manchester Children’s University Hospitals NHS Trust
The Royal Liverpool & Broadgreen University Hospitals NHS Trust
The University of Central Lancashire (UCLAN)

TrusTECH provides a service to the NHS Trusts and Universities in the
Northwest

TrusTECH provides help and advice in the identification, protection and
exploitation of intellectual property

TrusTECH provides access to the expertise of associated organisations e.g.
manIP, Technology Transfer companies, patent agents
The TrusTECH Team

Technology Exploitation Managers
Responsible for visiting NHS Trusts and Technology Auditing
o Dr Lynsey Grieveson – based in Preston
[email protected] 01772 892787
o Dr Ruth Hale – based in Manchester
[email protected] 0161 276 5786
o Dr Sonja Jonas – based in Liverpool
[email protected] 0151 794 4487

Innovation Unit Manager
•
Responsible for managing the work of the Innovation Unit
and visiting NHS Trusts
Dr Richard Deed, [email protected] 0161 276 5763

Project Coordinator
Responsible for the day-to-day administration of the Unit
Bridget Liddle, [email protected] 0161 276 5764
TrusTECH Services
NHS Trust agrees to pay a service fee of 0.5% of its R&D budget;
in return the Trust can expect the following
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Support for IP management and policy development
Technology/innovation auditing
Opportunities for collaborative research projects
Pooling of IP in portfolios
Links to external funding opportunities
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Assistance with development and exploitation of innovation and IP
(Costs are not included in the service fee)
IP training for Trust personnel (Costs are not included in the service fee)

Membership of a region wide network of NHS Trusts developing IP
All IP discovered remains the property of your organization
Technology/Innovation Auditing
•
Introductory Meeting with R&D Manager and/or designated contact
·
A systematic review of the research in progress at your Trust
·
Identification of research projects and groups or staff involved in
innovation
·
Follow-up visits to relevant personnel
·
Preparation of audit reports
·
Identification of innovations of commercial value
·
Advice on exploitation and protection of IP
Fundamental Barriers to Success (DCW View)
• Fundamental, endemic differences between industry and
university mission and world view (culture)
• Industry and University “wants” in contract negotiations
are often poles apart, especially in IP. Federal and state
laws, which were meant to help, actually hurt collaboration.
• Fundamental shift since WW II in engineering department’s
emphasis, reward system and training of students and
faculty is unfavorable to fostering type of collaboration
industry needs
• Large disconnect between industry and academe in what
constitutes “Effective Technology Transfer”
• Few plans or programs to remedy the situation
Areas of Tough Contract Negotiation
• Intellectual Property Rights
• Publication Rights
• Royalties & Licensing Fees
• Proprietary Information
• Patents
• Warranty and Indemnification
• Selection of Student Participants
These issues must
be resolved in
win-win situation
for both Industry and
the University
“Intellectual Property Rights” is the Toughest
Challenge Faced Before Contract Is Signed
Technology Transfer from Academe to Industry
• To succeed, technology must
- “Arrive in time” to be used
- “Get incorporated” into the product
(e.g. via the design / analysis system, etc.)
- “Give Competitive Advantage” to GEAE in the marketplace
• May need change / modification of university culture
- What constitutes “acceptable” thesis project
- Return to what “engineering really is”
- Does university really want to work “our problems”
Effective Technology Transfer is the Toughest
Single Challenge Faced After Contract Is Signed
Effective Technology Transfer
DESIGN
and/or
ANALYSIS
SYSTEM
University
Technology
How best to transfer university technology to Company
• Identify “Sockets” into which technology can fit
(The “LEGOTM model”)
• Identify CTQ’s (critical to quality) for “sockets”
• Present results (transfer technology) in format that
fits sockets & satisfies CTQ’s
• Make sure results are accepted by the Industry
Steps for Effective Technology Transfer to GEAE
1. Conduct a “Customer Value Chain Analysis” (CVCA)
• Identifies the parties involved and shows their relationships
• Shows flow of information, complaints, money, decisions, results, etc.
2. Capture the “Voice of the Customer” (VOC)
• Identify what the critical customers really want (lightweight, reliable, safe, etc.)
• Identify Critical to Quality (CTQ) items
3. Establish “Engineering Metrics” (EM) from VOC
• Characterize performance with measurable quantities (max temp, MHz, MPG)
4. Use the “LEGOTM model” concept for packaging technology to
fit GEAE design and analysis system
• Present technology using EM’s to fit GEAE system like a LEGOTM block
5. Use Project FMEA to manage program
• Risk assessment and abatement
• Critical path scheduling
One Starting Point to Developing Effective
Industry / University Research Partnerships
Universities focus on High-impact Technologies
1. Those that reduce cost pain (IFSD, Aborted
Take-off, unscheduled engine removal,
delays and cancellations, manu. errors)
2. Those that industry sees as needed to
improve their product (business)
- future advanced propulsion systems
- component improvements
At Issue: Universities often do not see these types
of “practical” problems as scientific enough
for Ph.D. thesis
University Strategic Alliances
University of Cincinnati
• Acoustics
• Aerodynamics
Ohio State University
• Full scale turbine testing
at engine conditions
• Aeromechanics
Aachen RWTH, Germany
• Centrifugal Compressors
• Compressor CFD
GEAE
MIT
• Compressor
Duke University
• Aeromechanics
RHEINISCH
WESTFÄLISCHE
TECHNISCHE
HOCHSCHULE
AACHEN
Eidgenössische
Technische Hochschule
Zürich
Stanford University
• Turbine Cooling
& Heat Transfer
• Design for Six
Sigma - Manufacturing
Georgia Tech
• Probabilistic Design
Methodology
• New Propulsion
Technologies
Swiss Federal Institute of Technology, Zurich
• CFD Turbine & Compressor
GEAE Concentrating Academic Expertise
on Critical Technology Needs
Bay Area Science and Innovation
Consortium(BASIC) IP Project
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BASIC is a collaboration of the Silicon Valley region’s major research
universities (Stanford, UC Berkeley, UCSF, …), businesses (IBM, Genencor,
HP, Lockheed, SIA, …), and national labs (Lawrence Livermore, NASA Ames,
Sandia, …)
BASIC is dedicated to developing programs that take advantage of the unique
capabilities at Bay Area R&D institutions to provide solutions for critical
national and regional challenges
Goal of the IP Project is to achieve a shared understanding of general principles
that will more effectively advance the IP interests of public and private research
institutions
Motivation is driven by recognition that a problem exists and is becoming more
contentious and complex over time
IP Project Desired Impact and Outputs
– A set of general principles
– Achieve social / culture change in the total IP system
– Enhance economic and business development – create a virtuous cycle/environment
rather than a vicious cycle
Gelato
Federation
• HP encourages collaborations with and among
universities worldwide, exemplified by the Gelato
Federation
• The Gelato Federation is a world-wide consortium
of research organizations dedicated to enabling
scalable, open source Linux-based Itanium
computing solutions to address real world problems
in academic, government, and industrial research
www.gelato.org
The Gelato Federation
NCSA
University
UIUC
of Waterloo
Purdue
PNNL
NCAR
Hewlett-Packard
(sponsor)
UCSD/
SDSC
BP
KTH Stockholm
OSC PSC
GaTech
Uni Houston
Univ Copenhagen
Russian Academy
Univ Karlsruhe
Groupe
of Science
CERN
ESIEE
Fudan University
INRIA
Tsinghua University
Zeijang University
UPRM
BII Singapore
iHPC
University of
New South Wales
PUCRS
www.gelato.org
The Partnership Continuum
• An increasing
level of trust is
developed in
the
partnership.
• The
relationship
becomes a
holistic
engagement in
the strategic
partnership
phase.
New Relationship Models
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“Dedicated to the Public Domain” Model
Some university faculty put the results of their research directly into the
public domain and do not try to obtain a patent
This strategy has been quite successful, since many companies would
rather just give money to a university in return for access to students than
waste time, money and energy in futile licensing negotiations
In this approach, all companies have equal access to the ideas, and those
who push the hardest (and hire the students who worked on them) will
bring them to market
Neither the university nor faculty receive royalty income, but those who
adopt this strategy have found that the increase in direct research support
more than outweighs the potential (but seldom realized) income
New Relationship Models
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“Research Commons” Model
Proposed by Bob Miller, Vice Chancellor of
Research, UC Santa Cruz
Multiple companies and universities interact on
research activities in the research commons
IP is freely available to the companies and
universities participating in the commons
Under discussion at the UC System
New Relationship Models
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•
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“Second Generation Technology Transfer” Model
Proposed by Gerald Barnett, UC Santa Cruz Technology Transfer
Office
Current approach of patenting and licensing university inventions to
generate royalties is flawed because it concentrates resources on trying
to find a few winners, rather than using university technologies to
build relationships with companies that might actually use those ideas
Barnett advocates using intellectual property as a tool for working
with industry more, not less
Awards nonexclusive licenses to industrial sponsors of research
New Relationship Models
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•
•
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“Privatization” Model
Proposed by Mike Uretsky, NYU Stern School of Business
His thesis is that universities are the wrong place to do
technology development, since universities can’t move fast
enough and don’t understand the marketplace
The challenge is dealing with economic realities that keep this
from being successful
Uretsky proposes the formation of a middle operation
between universities and industry to focus on development,
prototyping, testing, refining, and commercialization of
technologies
Conclusions
•
Focus on Building long-term Strategic Partnerships that help each other to
be successful:
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–
–
–
–
–
•
Build trust and mutual respect
Maximize the creation and transfer of knowledge
Publish and use public domain where appropriate
Emphasize total revenue to the university
(focus on research funding)
Favored vendor status
Access to government resources
Accreditation & learning science and teaching
Technology program portfolio/balance science & engineering
We believe this leads to win-win collaborations.