European Business & Innovation Centre Network


Innovation Management Trends of
PROs



András Haszonits

                ...
Agenda




     •   Evolution of IPR management models of PROs
     •   Global tech-transfer figures
     •   IPR Ownershi...
European Business & Innovation Centre Network


1. Evolution of IPR Management
   Models of PROs



András Haszonits

    ...
PRO Models of Innovation Management



     • Open science model

     • Licensing Model

     • Innovation model




5/26...
Open Science Model


     Traditional setup
     No IPR – Nothing left to manage
     Publication ASAP
        – No IPR to...
Licensing Model


     Roots in the US 80’s

     Before: Invensions resulting from university research
       (public fin...
Licensing Model


     Then came Bayh-Dole Act
     Main features:
     • Universities are titled for invention (if they w...
Licensing Model


     Then came Bayh-Dole Act
     Main features:
     • Government is granted free, non-exclusive licens...
Licensing Model


     Effect of the Bayh-Dole Act
     • Most US PROs have opened TTO, with main activity:
            – ...
Innovation Model


     2 major alternatives:
     • 1. Collaborative research with industry
            In exchange for b...
Innovation Model


     2 major alternatives:
     • 2. Spin-out creation
            Technology offered with favourable c...
Requirements on TTOs


     Requirements set on PRO/TTOs (especially spin-outs):
     • next to patenting, and licensing,
...
European Business & Innovation Centre Network


2. Global Tech-transfer Figures




András Haszonits

                    ...
Share of R&D Expenditures by Innovation Phases




5/26/2010             Andras Haszonits              14



             ...
European R&D in context: Facts and Figures

       Total Patents granted by the EPO per 1 mln Euro spent on R&D in 2004

 ...
University Patenting US




                    Source: The Knowledge Production Function for University Patenting

5/26/2...
Patenting US




                        Source: U.S.-Based Global Intellectual Property Creation

5/26/2010        Andras...
University Patenting US




                             Source: U.S.-Based Global Intellectual Property Creation

5/26/20...
Results of University R+D US




                                         Source: AUTM U.S. Licensing Survey

5/26/2010   ...
Results of University Licensing US

    Percentage of the patent portfolio being licensed-out:

                          ...
Univerity IPR Management Results EU / US




5/26/2010            Andras Haszonits        21



                          ...
Global Ranking of Universities and Their Patenting




                               Source:
                            ...
University patenting EU

in Europe only 3% of 2005 filings come from universities




                                    ...
European Business & Innovation Centre Network


3. Ownership of IPR




András Haszonits

                                ...
Ownership of IPR


     Main issues to deal with for TTOs:
     • Ownership of research results (IPR)
            – Govern...
Ownership of IPR


     Main issues to deal with for TTOs:
     • Ownership of research results (IPR)
            – Recomm...
Ownership of IPR – Industry Sponsored Research


     Main issues to deal with for TTOs:
     • Ownership of research resu...
Ownership of IPR – Joint Ownership


     Main issues to deal with for TTOs:
     • Ownership of research results (IPR)
  ...
Ownership of IPR – Joint Ownership


     Main issues to deal with for TTOs:
     • Ownership of research results (IPR)
  ...
Education


     Main issues to deal with for TTOs:
     • IPR Awareness Culture Raising
            – Prior review of pla...
European Business & Innovation Centre Network


4. Spinning-out




András Haszonits

                                    ...
Spin-outs – Why?


     Inventions of PRO are far from marketable application!
     Tech transfer to industry usually take...
Spin-outs – Key to Success


     Sucess factors for Spin-outs
     • Key enterpreneurs (management), enterpreneurial spir...
Spin-outs – PRO Support


     Support required from PRO
     • Communication that creation of spin-outs is a policy
     ...
Spin-outs – Capital Need


     Capital requirement
     • Pre-seed capital: 2 – 3 years
            – to cover:
         ...
Spin-outs – Capital Need


     Capital requirement
     • Seed capital: 2 (ICT) – 5+ (biotech, pharma) years
            ...
Thank you very much for your attention


    András Haszonits
    haszonitsandras@upcmail.hu



                          ...
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Public Research Organization

  1. 1. European Business & Innovation Centre Network Innovation Management Trends of PROs András Haszonits Amman, 16 May 2010 1
  2. 2. Agenda • Evolution of IPR management models of PROs • Global tech-transfer figures • IPR Ownership questions • Spin-outs • Setting up a TTO 5/26/2010 Andras Haszonits 2 2
  3. 3. European Business & Innovation Centre Network 1. Evolution of IPR Management Models of PROs András Haszonits Amman, 16 May 2010 3
  4. 4. PRO Models of Innovation Management • Open science model • Licensing Model • Innovation model 5/26/2010 Andras Haszonits 4 4
  5. 5. Open Science Model Traditional setup No IPR – Nothing left to manage Publication ASAP – No IPR to manage, public domain • Contract research – IPR acquired by industry (patent) 5/26/2010 Andras Haszonits 5 5
  6. 6. Licensing Model Roots in the US 80’s Before: Invensions resulting from university research (public finance) belonged to the state. US government policy is to issue non-exclusive license. Consequences: • Researchers/PROs not motivated to apply for patents • No willingness from industry to take non-exclusive license from government 5/26/2010 Andras Haszonits 6 6
  7. 7. Licensing Model Then came Bayh-Dole Act Main features: • Universities are titled for invention (if they want to) • If so, 2 obligations arise: – Obligation to file patent – Excercising effort to find licensee – Obligation to share royalty with inventor 5/26/2010 Andras Haszonits 7 7
  8. 8. Licensing Model Then came Bayh-Dole Act Main features: • Government is granted free, non-exclusive license but just for government procurement purposes • Government retaining right for intervention and commercialization if licensee fails • In case of exclusive license, licensor must manufacture within the USA 5/26/2010 Andras Haszonits 8 8
  9. 9. Licensing Model Effect of the Bayh-Dole Act • Most US PROs have opened TTO, with main activity: – Invention disclosure – IP protection – Licensing • Increased patenting activity • Higher number of formulation of start-ups • More product developed based on university research 5/26/2010 Andras Haszonits 9 9
  10. 10. Innovation Model 2 major alternatives: • 1. Collaborative research with industry In exchange for beneficial license option on university’s background technology/knowledge, industry partner funds research aiming commercialisable product. Often with public development grants. CRADA serves as basis. 5/26/2010 Andras Haszonits 10 10
  11. 11. Innovation Model 2 major alternatives: • 2. Spin-out creation Technology offered with favourable conditions for share in the company and/or royalty Need to invite enterpreneurs and seed-capital First years of operation devoted to prove technical feasibility and market potential 5/26/2010 Andras Haszonits 11 11
  12. 12. Requirements on TTOs Requirements set on PRO/TTOs (especially spin-outs): • next to patenting, and licensing, • business development, • enterpreneurship, • coaching, • industry experience • seed capital attraction competences, • etc 5/26/2010 Andras Haszonits 12 12
  13. 13. European Business & Innovation Centre Network 2. Global Tech-transfer Figures András Haszonits Amman, 16 May 2010 13
  14. 14. Share of R&D Expenditures by Innovation Phases 5/26/2010 Andras Haszonits 14 14
  15. 15. European R&D in context: Facts and Figures Total Patents granted by the EPO per 1 mln Euro spent on R&D in 2004 0,250 Euro 4 mln+ of GERD per patent 0,200 0,150 Euro 10 mln+ of GERD per patent 0,100 0,050 0,000 Finland Japan Spain Poland EU-15 EU-25 EU-27 Estonia Bulgaria Portugal Lithuania France Hungary Slovakia Romania Switzerland Netherlands United Kingdom Slovenia United States Czech Republic Turkey Germany Source: Eurostat, EPO 5/26/2010 Andras Haszonits 15 15
  16. 16. University Patenting US Source: The Knowledge Production Function for University Patenting 5/26/2010 Andras Haszonits 16 16
  17. 17. Patenting US Source: U.S.-Based Global Intellectual Property Creation 5/26/2010 Andras Haszonits 17 17
  18. 18. University Patenting US Source: U.S.-Based Global Intellectual Property Creation 5/26/2010 Andras Haszonits 18 18
  19. 19. Results of University R+D US Source: AUTM U.S. Licensing Survey 5/26/2010 Andras Haszonits 19 19
  20. 20. Results of University Licensing US Percentage of the patent portfolio being licensed-out: Share of patent portfolio licensed-out Univ (ASTP) PRO (ASTP) Number Univ (not ASTP) of tech Other Research transfer Institutes institutes (not ASTP) Percentage of patent portfolio licensed-out Source: Final results of the ASTP Survey for Fiscal Year 2007, 2008. 5/26/2010 Andras Haszonits 20 20
  21. 21. Univerity IPR Management Results EU / US 5/26/2010 Andras Haszonits 21 21
  22. 22. Global Ranking of Universities and Their Patenting Source: AUTM U.S. Licensing Survey Academic Ranking of Word Universities 2006 5/26/2010 Andras Haszonits 22 22
  23. 23. University patenting EU in Europe only 3% of 2005 filings come from universities Source: Applicant panel Survey 2005 http://www.european-patent-office.org/aps/2005/epoapplicant2005.pdf 5/26/2010 Andras Haszonits 23 23
  24. 24. European Business & Innovation Centre Network 3. Ownership of IPR András Haszonits Amman, 16 May 2010 24
  25. 25. Ownership of IPR Main issues to deal with for TTOs: • Ownership of research results (IPR) – Governed by: • Employment related IP regulations • Government research / fund regulations • Univ-Industry contract – Problems: • Non-payroll (contractual or funded) researchers • PhDs, students • Professor’s privilege (in EU: I, S, F, N) • „Rebell” payroll researchers 5/26/2010 Andras Haszonits 25 25
  26. 26. Ownership of IPR Main issues to deal with for TTOs: • Ownership of research results (IPR) – Recommendations: • Payroll researchers: „University IP Policy” + Extension of employment contract (conditions as of Bayh-Dole Act) • Visiting scientists, research grant scientists: Written aggreement before joining research – IPR assigned to PRO – Profit sharing scheme for successful exploitation 5/26/2010 Andras Haszonits 26 26
  27. 27. Ownership of IPR – Industry Sponsored Research Main issues to deal with for TTOs: • Ownership of research results (IPR) – Industry sponsored research: • US practice: IPR by PRO, Industry free non-exclusive license, exclusive license under fair compensation • EU practice: Industry fights for IPR, and right of first refusal Problem: PROs are supposed to own IPR. Resolution: contractual transfer of IPR to industry 5/26/2010 Andras Haszonits 27 27
  28. 28. Ownership of IPR – Joint Ownership Main issues to deal with for TTOs: • Ownership of research results (IPR) – Join ownership? – AVOID in EC! • EC: joint owner can utilize IPR own its own, but can not assign license to 3rd party without consent of all joint owners! Industry can exploit himself, but PRO is banned from commercialisation (license) • US: joint owner can utilize on its own, and grant non-exclusive license. Consent is required just for exclusive license 5/26/2010 Andras Haszonits 28 28
  29. 29. Ownership of IPR – Joint Ownership Main issues to deal with for TTOs: • Ownership of research results (IPR) – Join ownership? – Recommendation for EC • Agreement stipulating: – joint owners to be allowed to use / grant of non-exclusive license provided that first option for industrial co-owners have been refused – exclusive use by one/more co-owner requires consent of all joint owner, compensation to be paid 5/26/2010 Andras Haszonits 29 29
  30. 30. Education Main issues to deal with for TTOs: • IPR Awareness Culture Raising – Prior review of planned publication – Invention disclosure regime • Review of draft manuscripts / interviewing • Lab-note culture – Discovery of commercialable inventions – Enables opinioning on seeking IPR protection – Base for detirmining inventorship – Formal date of invention under US patent law – Respect IPR of third parties 5/26/2010 Andras Haszonits 30 30
  31. 31. European Business & Innovation Centre Network 4. Spinning-out András Haszonits Amman, 16 May 2010 31
  32. 32. Spin-outs – Why? Inventions of PRO are far from marketable application! Tech transfer to industry usually takes place not on favourable conditions to PRO. Spin-out is a realistic alternative – Externalize development from PRO not fitting to its mission – New funds become available: obtain development fund not available for pure research for financing cost of development – Participate in FP programs as industrial partners (with PRO) – New opportunity for researchers with enterpreneurial spirit – Retain researchers: know-how is hard to license-out on attractive terms, thus researchers with such know-how do not have to leave to industry – Capital gain on spinout equity is potentially larger than on license 5/26/2010 Andras Haszonits 32 32
  33. 33. Spin-outs – Key to Success Sucess factors for Spin-outs • Key enterpreneurs (management), enterpreneurial spirit • Ongoing support from mother-PRO • Pre-seed / Seed capital, development loans • Expertise in tech transfer and investment acquisition • Coaching in technology incubators • Further education and enterpreneurial training for management 5/26/2010 Andras Haszonits 33 33
  34. 34. Spin-outs – PRO Support Support required from PRO • Communication that creation of spin-outs is a policy objective of PRO • Fostering spirit of enterprise in scientific community • Encouraging by supportive measures (e.g. part-time release) scientists to be involved in spin-out • Providing access to technology of PRO 5/26/2010 Andras Haszonits 34 34
  35. 35. Spin-outs – Capital Need Capital requirement • Pre-seed capital: 2 – 3 years – to cover: • market analysis, • competitive analysis • secure access to IP • freedom of operation • additional team members 5/26/2010 Andras Haszonits 35 35
  36. 36. Spin-outs – Capital Need Capital requirement • Seed capital: 2 (ICT) – 5+ (biotech, pharma) years – USD 300.000 – 6.000.000+ – Business Angels (too much for founders, too small for venture capital) – Development grants (from EC through local government) 50-80% of development cost, has to be paid back if commercialization succesful – Bridge funding from proof-of-principle to break-even Spin-out reach self-sustaining phase • Then comes Venture capital, and after 3-5 years IPO 5/26/2010 Andras Haszonits 36 36
  37. 37. Thank you very much for your attention András Haszonits haszonitsandras@upcmail.hu The training material is to be used exclusively in conjunction to the SRTD project in Jordan 5/26/2010 Andras Haszonits 50 37

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