Presentation on theme: "Role of IP in Benefiting from University-Industry Partnerships: Incubators and IP: International Perspective Istanbul, Turkey, January 10 and 11, 2005."— Presentation transcript:
1 Role of IP in Benefiting from University-Industry Partnerships: Incubators and IP: International Perspective Istanbul, Turkey, January 10 and 11, Guriqbal Singh Jaiya Director, SMEs Division World Intellectual Property Organization
2 Cultural GapEntrepreneurial world: secrecy, profit maximization, search for competitive advantage, patents, “time is money”.University world: broad dissemination of knowledge and research results, independent, guided by scientific curiosity.Publication vs. patenting
3 University Vs. Business: Two Worlds IP Systemas a bridgeKnowledgeAcademicCommunityCommercialWorlde.g. SMEsCollaborationR&D FundingProfitable productsFind new marketsWin competitionInitial secrecyDecide what researchMotivated by curiosityAttract acclaim of peersPrompt publicationProfitable productsFind new marketsWin competitionInitial secrecyDecide what researchMotivated by curiosityAttract acclaim of peersPrompt publication
4 Benefits of Partnering (1) Limited public sector research funding:Private sponsorship and licensing income may be the way forwardInnovation: key for the development of industriesGap: Innovative research results useful for industry gathering dust on laboratory shelvesLicensing: often the only way a new invention will ever become a productIncentives/rewards: for researchers and faculty to commercialize products
5 Benefits of Partnering (2) For SMEs:Access to innovative technology coming out of university and research labs to accomplish their strategic objectives in the competitive marketFor Universities and Research LaboratoriesAccess to private equity funding sources:For Venture Capitalists/Financing Institutions:Access to early stage investment opportunities in outstanding technologies spinning out of research institutions
6 Benefits of Partnering (3) Market: Helps to move inventions from laboratory to marketplaceEfficiency: Ensures that new and better products and services reach the public more quickly and oftenRelevance: Enables researchers / inventors to participate in further development of product or processTime: Reduces significantly the time to eventual commercializationFinance: Allows SMEs to “buy” useful research results with less or without own prior research investment
7 Benefits of Partnering (4) Partnering helps SMEs in:starting a new businessexpanding an existing businessextend the territoryextend the nature of a businessimprove the quality of goods or servicesimprove the market positionmanufacture a new product protected by a patent, utility model, know-how or a trade secret
8 Main Ways of Partnering Consulting (without patentable inventions)Work directly with researchersContract directly between researcher and BusinessSponsored Research (with possible inventions)Contract between University and BusinessStatement of workLicensing (of patented inventions, and of know-how)Contract between University and businessTerms for the commercial exploitation of University / Research Center owned technology
9 Resolving Conflicting Interests University: Move away from basic research?Public interest vs. private interest?Privatization of knowledge vs. open access?Neglect of basic mission of the universityDifferences between departments or facultiesCheap labor for companiesUniversity research is mainly federally funded; results should be available to tax payers free of charge
10 Conflict of Interest Policy Does university have a written policy statement on conflict of interest for faculty member involvement with business or industry? (Percentage of universities)North AmericaOther Countries
11 Survey MethodologyStructured questionnaire, administered to the TLO (technology licensing office) Director (or his/her equivalent) in the 29 member universities of APRU who have agreed to participateUse of standard definitions of Association of University Technology Managers (AUTM) survey where possibleAll statistical analysis presented is based on the sample returns, without weighting
12 Distribution of Responses 22 universities10 North AmericaAsia/Austral-Asia: 9 Asia, 1 each Australia, New Zealand, South America76% response rate (91% for North American universities and 67% for Asia/Austral-Asian universities)86% public universitiesMore than 70% have medical schoolsAverage of 1,546 tenure track faculty members, ,003 PhDs, 23,346 students, of which an average of 29% were graduate students
14 Commercialization: Risky, Long term, Expensive Deriving commercially viable products from research:takes often very longthere is lots of uncertainty about the outcome(very few research projects make it to the commercial market place)protecting and developing a marketable product is often much more expensive than initial research
15 Difficult Phases Financing research Funding for Intellectual Property protectionFunding development workManaging successful commercializationOnly some inventions lead to successful product
17 National IP PolicyIn the US: Bayh - Dole Act (According to the AUTM, it has led to creation of 260,000 jobs and contributed US$ 40 billion to US economy)JapanGermanyChinaBrazilin the Knowledge-driven Economy the university has new functions
18 University IP PolicyIP Policy for successful commercialization of research results (Win-Win for both)IP Policy:ownership of IPdisclosure of IPlicensing, commercialization, and marketingdistribution of royalty incomerights and obligations of an inventor and of the institution
19 University IP Policy Teaching (Copyright) Marketing (Inventions, University)Research (Trade secrets and Patents)ownership of IPdisclosure of IPmarketing, commercialization and licensingdistribution of royalty incomerights and obligations of an inventor and of the institution
20 Invention PoliciesOwnership of patent rights to technologies developed by faculty, students and staff (Percentage of universities)North AmericaOther Countries
21 What are IP Management Units (IPMUs) (1) Appropriate institutional structure specifically responsible for:managing the commercialization of IPfacilitating the transfer of technology from universities/R&D centers to industry/business
22 What are IPMUs (2)Specific institutional arrangements vary considerably: external and/or internalexternal technology brokers or IP law firmsoffice, department, unit or section (IPMU) within a faculty, university or R&D center, managed by and integrated in its overall administration (TLO,TTO, etc)common IPMU for a number of UniversitiesIPMU may be a limited companytechnology incubators for university spin-offs/start-ups
23 What are IPMUs (3) Called by a variety of names, such as: Technology Licensing Office (TLO)Technology Transfer UnitCenter for Technology ManagementInnovation CentersIndustry Liaison Office
24 Examples:IP Management Unit Example 1: Stanford UniversityOffice of Technology LicensingStarted as pilot program with one staff and three technologiesToday: 20 staff, 1100 patents currently licensed to companiesBirth of biotechnology (Cohen Boyer patent)Strategy of non-exclusive licensing
25 Examples:IP Management Unit Example 2: Technion Israel Institute of TechnologyTechnion R&D Foundation for exploitation of university R&DDimotech Ltd. (for university spin-offs)Technion Entrepreneurial Incubator Co. Ltd.
26 Examples:IP Management Unit Example 3: By 2000, Brazil had over 180 business incubatorsSome 84% of incubators linked to universitiesUsually strong interaction between incubated businesses and the host universitiesSome 15% of firms that graduated from an incubator have at least one patent. This figure is considerably higher than the average for Brazilian firms.
27 Examples:IP Management Unit Example 4: Faculty of Chemistry, Universidad de la Republic of UruguaySince 1998 courses on “Development of entrepreneurial capacities” and “Intellectual Property and patents” delivered within the universityEstablishment of an incubatorEstablishment of a “technology pole” for the joint development of R&D projects.
28 Importance of IPMUs (1) (1) Effective and efficient commercialization structure with responsibility over technology licensing greatly facilitates the proper management of the process of commercialization (in finding and interfacing with industrial and financial partners)enables inventor/ researcher to focus on the research side of the project(and less on the related legal/business aspects for which they may not have the appropriate expertise and/or time)
29 Importance of IPMUs (2) (2) Awareness and training on IP matters Sensitizing faculty members and researchers on the importance of identifying, protecting and commercially exploiting their inventions and/or research resultsProcedures for disclosing inventions, patenting and management of licensing
30 Importance of IPMUs (3)Lack of expertise: Often perceived as one of the major limiting factors in managing the commercialization of IP by universities/R&D centers“the right mixture of scientists, lawyers and businessmen and a well-organized back-office is the basis for success in technology transfer”Bernhard Hertel, Managing Director, Garching Innovation (TTO of the Max-Planck Gesellschaft)TTO: Technology Transfer OrganizationMax Planck: Germany' s largest private organization for fundamental research
31 Challenge of Financing an IPMU Self-sufficiency: Long-term aimIPMUs should aim to become self-sufficient and eventually contribute to university fundingIn most universities, licensing pays for less than 5% of R&D costs; maximum is 20% at Stanford and Columbia Universities
32 Challenge of Financing an IPMU “Technology transfer is a long-term process. A TT office should have the basis to survive at least ten years. It is difficult to predict when you will get your big project. But when it comes you must have the skills to manage it appropriately”Bernhard Hertel, Garching Innovation: (Germany)
33 Other Challenges for an IPMU Elisabeth Ritter do Santos, TT Office, Federal University of Rio Grande du Sur, Brazil:“The main challenge is striking a balance so that the results achieved by the new functions of universities may strengthen an regenerate the university’s traditional functions.”Achieving institutional legitimacyCreating IP Culture: Challenges in changing organizational culture, which may take a lot of timeEarly Success: Significant royalty income to gain legitimacy and credibility
34 Other Challenges for an IPMU University research covers a huge variety of technical fields. (challenge for TT personnel)Academic scientists far more independent than industrial researchers. Researcher cooperation and conviction is crucial.Disclosure. Researchers share information widely. Avoid early disclosure.Difficult to establish the inventor, especially in cooperative research. Inventorship vs. authorship.
35 Role of IPMU: Overview General Mission statement University IP Policy Relevant agreementsInvention disclosuresDetermine patentability of inventionsEvaluate commercial potentialObtain patent protectionCommercialize inventionsRaise awareness and train researchers/inventors on practical IP matters
36 Range of Responsibilities for IPMUs Percentage of universities whose IPMUs have thefollowing responsibilities by region
37 GeneralCentral liaison between the research center / University and industry/business (e.g. SMEs)Organizing corporate visits to University / research centerMaintaining contact with companies that have potential commercial interest in new technologiesProvide legal assistance and advice to researchers, faculty, administrators and other staff
38 General Uncover commercially exploitable ideas Manage invention disclosuresEvaluate commercial relevance and potentialProvide assessment to determine patentabilityOwnership clarification (researcher team, university, outside company, other, together etc)Responsible for non-disclosure agreementsResponsible for option and license agreementsResponsible for obtaining and managing appropriate IPR protection (patents, trademarks, designs...)
39 GeneralIdentify and contact appropriate companies to commercialize the technology in return for royalties, license fees and/or research funding.Licensing IP to appropriate commercial partnersManage licenses for IPNegotiate an appropriate agreement which may, in addition to license fees and royalties, include additional research support for the inventor's laboratory
40 GeneralSensitizing researchers on the possibility of commercializing research resultsEvaluating the commercial potential of an inventionObtaining patent protectionLocating suitable commercial development partnersNegotiating and managing licenses
41 Operational considerations GeneralOperational considerationsIdeally, staff should be skilled in sciences, business and lawPart of the work is generally outsourced to specialists (e.g. patent agents)Disclosure (disclosure forms, early disclosure, non-disclosure agreements, etc.)Policy on patenting (every invention, only those with strong market potential, etc.)Any cooperation with industry should the subject of a written agreement
42 Mission statement Include commercialization in mission statement In most universities: not includedThis often impedes execution of joint research projects with private sectorRedirect skills of manpower towards production of innovations, inventions and research findings with commercial potentialCareer development should not depend merely on teaching and basic research (peer reviewed publications)In Jordan: Generally, overall approach of educational institutions emphasizes traditional teaching and researchRedirect skills: In the case of a major project release temporarily from teaching to permit concentrating on the project
43 University IP PolicyTo safeguard the interests of the university/R&D center in managing collaborative/contract/sponsored research activitiesGood IP Policy sets forth transparent guidelines and benchmarks for ownership, protection & commercializationAt the same time, must uphold the core moral values/mission of the institution (dissemination and sharing of knowledge)
44 University IP PolicyTailored to specific needs of the institutionKey parts
45 Secrecy and Confidentiality University IP PolicySecrecy and ConfidentialityIdentification (ongoing R&D work; laboratory notebooks)Contractual obligation (NDA/CA)Expected protection measures ( , marking, access limitations)Procedures for sharing confidential information (presenting technical papers at seminars; publishing technical or journalistic articles, contracts with third parties, etc) Some universities: reservations trade secrets openness in knowledge-sharingEx: confidential scientific & technical data; commercial info, financial info; negative info. Requirem: secret + comm value + reasonable steps
46 University IP Policy Ownership of IPRs inventions, CR material, research findings, discoveries, creations, new plant varietiesgenerated by students, guest researchers, faculty members, inventors ‘in the course of employment’ or ‘significant use of resources’commissioned worksjoint projectsfunded by government; funded by sponsorstudentssurrender of IP ownership to inventorUniv would normally own any IP that is made, designed, discovered or created by a member of staff, students, guest researchers, etc in the course of their employment and responsibilities or which makes significant use of the institution’s resources (incl funds, facilities, equipment, secretaries) in connection with its development
47 University IP Policy Ownership of IP Rights A university or R&D institute generally owns any IP made, designed or created by a member of staff or researcher in their course of their employment.Sometimes written agreements (e.g. MIT)Use of university resourcesGovernment funded researchSponsored research
48 University IP Policy Commercialization Strategy for marketing, commercializing, licensing of IPDistribution of incomeIPMU may expect the costs incurred + some management fees to be refundedInventor may expect fair reward for his contributionRights and obligations of inventor and university/R&D centerIncome sharing: normally 100% to univ untill all out-of-pocket expenses reimbursed; thereafter, net income shared between inventor and univ
49 Disclosure:Need for Balance University IP PolicyDisclosure:Need for BalanceMeeting the needs of researchers for early publication for the sake of their career developmentPreventing “premature disclosure” of potential innovations and research findings, to avoid jeopardizing their patentability and/or commercial exploitation
50 Relevant Agreements (Examples) Participation AgreementService AgreementResearch agreementsInvention notice / disclosureInvention ownership agreementsConfidentiality agreementsOption agreementsLicense or other technology transfer agreementAgreement to settle disputes, etc.
51 Participation Agreement Relevant AgreementsParticipation AgreementConfirms acceptance of the Policy by employees, students, guest researchersAssigning to the university/R&D center all rights in any IP of which the university/ R&D center may assert ownership means to enforce the Policy before any resources made available!
52 Relevant Agreements Service Agreement Between university/R&D center and companyUniversity/R&D center performs certain taskEvaluation, field testing, clinical trial, etc IP issues: ownership, license, publication, commercialization (income sharing), confidentiality
53 Material Transfer or Bailment Agreement Relevant AgreementsMaterial Transfer or Bailment AgreementMaterials from industry to university/R&D center, or reverse (often biological material)Use of original materials; self-replications; modifications IP issues regarding inventions < use of materials: ownership, license, publication, commercialization (income sharing), confidentiality Liability: hazardous materials
54 Confidentiality Agreement (CA/NDA) Relevant AgreementsConfidentiality Agreement (CA/NDA)Separate or integrated in other agreementEmployees + external partners + visitorsBound not to release confidential information, unless expressly permitted protect patentability of invention protect trade value of other technology legal requirement for trade secret protection
55 Invention Disclosures provides information about the inventor, what was invented, circumstances leading to the invention, facts concerning subsequent activitiesfirst signal that an invention has been madebasis for determining patentabilitytechnical information for drafting patent applicationalso to report technology that cannot be patented but is protected by other means (e.g. trade secrets or copyright)
56 Invention Disclosures Adopt participation agreements or P and CR agreements to govern disclosuresall researchers should be obliged to disclose all potentially patentable inventions conceived or first put into practice in the course of their institution responsibilitiesEncourage to submit disclosures early in the invention development processrelease to the public before patent application is filed may disqualify an invention for patentability
57 Invention Disclosures Develop Disclosure Formsinvention titlename of inventordescription of invention*sponsorship, if anydesign date and date put into practicepublication dates, existing or projected, if anymost relevant technology known to the inventor
58 Invention Disclosures *Description of Invention Can be brief: explanatory drawing, data, abstracts, summaries may be sufficientIn sufficient detail to permit a searcher or patent professional to comprehend the invention and assess its patentabilityWhat is the invention; what does it; why does it appear significant
59 Invention Disclosures Protect Disclosures as Trade Secrets CA/NDA with members and all outside experts : inform that the information contained in the disclosures is confidential and obligation to keep secret
60 Determine Patentability of Inventions Does it provide a new technical answer to an existing or new technical problem?Is it possible to make practical use of it?Does it show an element of novelty? (some new characteristic which is not known in the body of existing knowledge in its technical field - "prior art”) patent searchDoes it show an inventive step? (could not be deduced by a person with average knowledge of the technical field)
61 Evaluate Industrial Relevance & Commercial Potential Does the technology offer a cheaper and/or better way of accomplishing something?Are there competing technologies available and if so how much better is the invention?Does it have potential for creating a new market?How much investment, in both time and money, will be required to bring the invention to the market?
62 Evaluate Industrial Relevance & Commercial Potential if it is decided not to patent/license by the University, then: reassign ownership to inventor retain rights to use the invention for further research and for educational purposes
63 Two ways of raising funds Raising Funds for Spin-offs/Start-upTwo ways of raising fundsDebt - loan which the borrower must repayEquity - which gives the investor a share of the actual business of the investee and is not automatically repaid by the investee business, but rather relies on the investor ultimately realizing the equity held in the business
64 Debt FinanceDebt finance is generally ‘secured’ by a charge over the business’ assets. In principle, these assets can be any claims that have reasonably predictable cash flows, or even future receivables that are exclusive.Securitization of IP assets - a new trend: collateralizing commercial loans and bank financing by granting a security interest in IP is a growing practice, esp. in music, Internet and high technology sectors.
65 Venture capitalFor the venture capitalist, return depends upon future profits.IP ownership is important to convince investors of the market opportunities open to the enterprise for the commercialization of the products/services in question :Patents provide exclusivity for the commercialization of inventions and may be important to convince investors for the commercialization of your productA patent is also a proof that the product is innovative.
66 Equity Management Policy Does university have a an equity management policy for start-up companies receiving technology licensing?(Percentage of universities)Other countriesNorth America
67 Evaluate industrial relevance & commercial potential Will the inventors continue to work on the invention?What will be the potential pay-off for a company that makes an investment in the development of the invention?Locate suitable commercial development partners & potential licenseesEstimate costs of patent protection
68 Academic Entrepreneur Business Plan: takes stock of the current situation and provides roadmap for the future.For spin-offs/start-ups, it is crucial for obtaining funds or gaining any credibility with investors, partners, etc.Experience of managerDescription of product/serviceFinancial resources (or expected funding)Market research (is there a market for it)Competitors (why is it special/different) and barriers to entry (e.g. IP of others)Marketing strategy,Price of product, costs, projections of cash flow
69 Academic Entrepreneurship University spin-offs/start-upsDepends on willingness of researcherRequires entrepreneurial thinkingAssociation with business-minded people recommendedRealistic valuation of the market potential of the product
70 Academic Entrepreneur Incubators often provide the ideal setting for university spin-offs/start-ups.Controlled environments where failure rate in first years of operations is diminishedPhysical space, infrastructure and access to university facilitiesAccess to trainingAccess to direct assistance on business planning, licensing negotiations, accounting and legal expertise (free of charge, subsidized or at market rate)
71 Start-Up Company Policies Can a tenure-track faculty member serve on board of directors of:Start-up company tocommercialize inventionExisting companiesPercentage of universities
72 Start-Up Company Policies Can a tenure-track faculty member:Take no-pay leave forinvolvement in start-up co.to commercialize inventionEngage in consulting for industryPercentage of universities
73 Assistance Provided to Start-Up Companies (Percentage of universities providing assistance)
74 Tracking of Start-up Companies Does university track number of start-up companies by faculty members/alumni? (Percentage of universities responding ‘yes’)
75 Tracking of Start-Up Companies by Faculty Members Mean cumulative no. of start-up companies as of end FY2000(for universities that track start-ups by faculty members only)With technology licensingWithout technology licensing
76 Obtain Appropriate IP Protection Applications for P, UM, TM, ID, PVPatents: Scope of patent; where (countries)FundsLocate partners for commercialization of IP in domestic and international marketsTM may be important where univ owns a company and sells goods & services. Ex Univ of Florida developed an electrolytic thirst quencher for use by its football teams. The formula was patented and acquired value, as did the TM (Gatorade). The P ran out after 17 years but the TM remained in force and continued to produce income for the univ.
77 Marketing Crucial issue often neglected by IPMUs Inventions transferred from laboratory shelves to IPMU shelvesNeed for appropriate marketing skillsWebsites and other advertisements?Most successful TT generally takes place between cooperating partners, or through the researcher’s own contacts in industry.
78 Some Important Questions Market EvaluationSome Important QuestionsDoes the technology offer a cheaper and/or better way of accomplishing something?Are there competing technologies and if so how much better is the invention?How much investment in time and money will be required to bring the invention to the marketplace?Does it have the potential for creating the new market?What are the potential pay-offs for investing in its development
80 LicensingLicensing of the invention to one or more existing companies for the purposes of commercializationExclusive or non-exclusive licensingDeveloped product: low risk, market is known, focus on manufacturing and marketingResearch result: high risk, far from market, focus on product definition, patent position uncertain, licenses fees low.
81 University IP Policy Distribution of Royalty Income Royalty income generally shared between institution / department / researcherMost universities have a sliding scale. The higher the royalty income the lower the percentage received by the researcherIn the USA, researchers often choose to allocate income to buy equipment and university provides matching/equal funds
82 Importance of Technology Transfer Objectives (Mean score)
83 Raise Awareness and Training IP Policy, IP laws, Procedures, FormsCreate awareness of importance of IPPromote greater use of patent informationAvoid infringement of IPRs of othersKey issues to be kept in mind while negotiating/discussing collaborative project with a company or sponsorP literature: train on how to use P databases
84 (Percentage of universities which track indicator) Tracking of Economic Impact/Wealth Creation Indicators of Start-Up Companies with Technology Licensing from University(Percentage of universities which track indicator)
85 (Percentage of universities which track indicator) Tracking of Economic Impact/Wealth Creation Indicators of Start-Up Companies without Technology Licensing from University(Percentage of universities which track indicator)