1. Involving Researchers in Spin-offs
FITT
(Fostering Interregional Exchange in ICT Technology Transfer)
www.FITT-for-Innovation.eu

2. “The Innovation law”& the mobility for researchers
 French Law for Innovation and Research of 1999 aims at fostering the creation of
innovative companies and the transfer of public research towards industry.
 The scope of the law is wide and covers 4 main items:
 Mobility of the human resources
 Cooperation between public research organization and enterprises
 Fiscal framework for innovative companies
 Legal framework for innovative companies
 Focus here on the mobility part i.e. a legal framework to incite researchers to
participate in the creation or development of innovative companies.
2 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

3. A substantial change for the employees of public
research organisations
 Really favourable conditions for public research employees to be involved with private companies
exploiting their work !
3 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

4. 4 schemes for researchers to be involved with an
innovative company
4 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

5. A few requirements
 The employees of a PRO who want to be involved with innovative companies according
to the conditions described in the 1999 Innovation law must comply with the following
generic principles:
 The company must exploit the research work of the employee
 Respect of the interests (moral & material) and functioning of the public research organisation
(PRO)
 Respect of the research or technical mission of the employee
 Absence of risks endangering the independency and neutrality of the PRO
 Drafting of a contract between the company and the PRO
 Prior authorisation of the PRO the national Commission of Deontology for public service
 The National Commission of Deontology must be informed on the contracts and partnerships
signed between the company and PROs (duration of the authorisation + 3 years)
5 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

6. 1) Creation of a company
Initial position in the PRO
Initial position in the PRO
Articles L 413-1 to L413-7 of the Code of
Research (formerly article 25.1 of the Law
Ask for the autorisation of organisation and
Ask for the autorisation of organisation and of Innovation dated from July 1999 ):
Commission of Deontology BEFORE
Commission of Deontology BEFORE
creating the company
creating the company Procedure if an employee of a public
research organisation wants to create
Yes
Yes No
No a company to exploit technologies that
he developped.
Quit prior activity in the PRO (derogation possible for part-time teaching
Quit prior activity in the PRO (derogation possible for part-time teaching
activities)
activities)
Contract between employee and research organisation
Contract between employee and research organisation
Contract between company and PRO on management of Intellectual Property)
Contract between company and PRO on management of Intellectual Property)
Position of « détachement » or « mis à disposition », to work for the company
Position of « détachement » or « mis à disposition », to work for the company
The employee can be a partner or manager of the company
The employee can be a partner or manager of the company
After 2nd and 4th
Ask for the autorisation of the PRO & Commission years
Ask for the autorisation of the PRO & Commission
of Deontology
of Deontology
Yes
Yes No
No
After 6th years
(maximum possible)
Return to PRO
Return to PRO
Stay in the company
Stay in the company (put an end to cooperation with
(put an end to cooperation with
and quit the PRO
and quit the PRO company within a year)
company within a year)
6 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

7. 2) Consulting activities (“Conseil scientifique”)
Initial position in the PRO
Initial position in the PRO
Articles L 413-8, L413-10 and L413-11 of
the Code of Research (formerly article
Ask for the autorisation of the PRO and national
Ask for the autorisation of the PRO and national 25.2 of the Law of Innovation dated from
Commission of Deontology
Commission of Deontology July 1999 ):
Procedure if an employee of a public
research organisation wants to
Yes
Yes No
No provide scientific support for a
company exploiting his research work
-Contract between employee and company (on content of
-Contract between employee and company (on content of whilst remaining in the public sector
consulting activities, duration, remuneration…)
consulting activities, duration, remuneration…)
-Contract between PRO and company about intellectual property
-Contract between PRO and company about intellectual property
matters
matters
-Scientific activity only (no management)
-Scientific activity only (no management)
-Consulting activities must be done outside the laboratory
-Consulting activities must be done outside the laboratory
-No participation in the negotations between PRO & company
-No participation in the negotations between PRO & company
-Not more than 20% of the time
-Not more than 20% of the time
-Maximum remuneration fixed at 66 000€ per year (Gross income)
-Maximum remuneration fixed at 66 000€ per year (Gross income)
Every 5 years, as long
as the company
Ask for the autorisation of the PRO and
Ask for the autorisation of the PRO and valorizes the research
Commission of Deontology
Commission of Deontology work of the employee
Yes
Yes No
No
7 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

8. 3) Participation in the administrative or advisory board
of a company
Initial position in the PRO
Initial position in the PRO Articles L 413-12 to L 413-14 of the Code
of research (formerly art 25. 3 of the Law
of Innovation dated from July 1999 ):
Ask for the autorisation of the research organisation
Ask for the autorisation of the research organisation
and national Commission of Deontology Procedure if an employee of a public
and national Commission of Deontology
research organisation wants to
participate in the decision board of the
Yes
Yes No
No company.
-Only remuneration possible is director’s fees (« jetons de
-Only remuneration possible is director’s fees (« jetons de
présence »). The maximum is determined by decree.
présence »). The maximum is determined by decree.
-Obligation to inform the PRO about the revenues resulting from
-Obligation to inform the PRO about the revenues resulting from
the director’s fees, dividends or the selling of titles.
the director’s fees, dividends or the selling of titles.
-Not compatible with consulting activities (« Concours
-Not compatible with consulting activities (« Concours Giving up the rights
Giving up the rights
scientifique »)
scientifique »)
-The participation in the capital of the society and voting rights
-The participation in the capital of the society and voting rights
cannot exceed 20%
cannot exceed 20% When the authorization has
When the authorization has
ended, the employee has 3
ended, the employee has 3
months to give up his rights in the
months to give up his rights in the
Every time the company. If he wants to keep
company. If he wants to keep
term of office is them, he must quit the PRO
finished. them, he must quit the PRO
Ask for the autorisation of the research organisation
Ask for the autorisation of the research organisation
and Commission of Deontology
and Commission of Deontology
Keeping the rights
Keeping the rights
Yes
Yes No
No
8 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

9. 4) Participation in the capital of a society
Initial position in the PRO
Initial position in the PRO
Articles L 413-9, L41310 and L413-11 of
the Code of research (formerly art 25. 2 of
Ask for the autorisation of the research organisation
Ask for the autorisation of the research organisation the Law of Innovation dated from July
and national Commission of Deontology
and national Commission of Deontology 1999 ):
Procedure if an employee of a public
Yes
Yes No
No research organisation wants to have a
participation in the capital of a society
exploiting his research work
-In the exercice of his activity, the employee should not have had a position
-In the exercice of his activity, the employee should not have had a position
of control over the company or have been involved with contracts between
of control over the company or have been involved with contracts between
the company and public research services in the last 5 years.
the company and public research services in the last 5 years.
-Not possible to have a position in the top management of the company (but
-Not possible to have a position in the top management of the company (but
compatible with consulting activities)
compatible with consulting activities)
-Limit :: 49% of the capital and 49% of the voting rights
-Limit 49% of the capital and 49% of the voting rights
-Obligation to inform the research organisation about the incomes related to
-Obligation to inform the research organisation about the incomes related to
the participation in the capital of the company.
the participation in the capital of the company.
-Contract PRO/company about technology transfer and between
-Contract PRO/company about technology transfer and between
employee/company about the condition of participation in the capital
employee/company about the condition of participation in the capital
Every 5 years, as long as When the authorization has
When the authorization has
the company valorizes the ended, the employee has 1 year
ended, the employee has 1 year
Ask for the autorisation of the PRO and
Ask for the autorisation of the PRO and research work of the to conclude his participation in
to conclude his participation in
Commission of Deontology
Commission of Deontology employee the capital of the company.
the capital of the company.
Yes
Yes No
No
9 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

10. When?
Law n°99-587 of July12, 1999 published in French “Journal Officiel” dated from July 12, 1999,
modifying the art. 25 of the law n°82-610 of July 15, 1982 (Orientation and Programmation for
technological Research & Development)
http://www.legifrance.gouv.fr/affichTexte.do;jsessionid=E06C858F5BDE540E506BA53962AD884D.tp
djo06v_3?cidTexte=LEGITEXT000005628198&dateTexte=20090921
Also included in the of the Code of Research (articles L 413-1 and following)
http://www.legifrance.gouv.fr/affichCode.do?cidTexte=LEGITEXT000006071190&dateTexte=200909
21
The content has been slightly modified since :
- “Loi de programme pour la recherche” n°2006-450 (18 avril 2006): the limit regarding the
participation in the capital of a company went from 15 to 49%.
- “Loi de modernisation de la fonction publique” n°2007-148 (2 février 2007): creation of a specific
commission for research-related decisions.
10 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

11. Who?
 Who is concerned by the law:
 Researchers, teachers-researchers, engineers, PhDs, technical and
administrative staff
Credit: Microsoft Office
11 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

12. Where?
 Applicable in most public research organisations:
- EPST (Etablissements Publics à caractère Scientifique et Technique) such as CNRS,
INSERM, INRA, INRIA
- EPSCP (Etablissement Publics à caractère Scientifique, Culturel et Professionnel)
including universities and public engineering schools developping their own research.
- EPIC (Etablissements Publics à caractère Industriel et Commercial) such as CEA are not
concerned.
12 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

13. Pros & Cons
PROs CONs
 Strong incentive for Technology Transfer :
allows researchers (and other empoyees) to
 Because it is a law, this plan relies on the
government’s agenda.
engage in TT activities outside their
laboratory whilst keeping the advantages of  The law is supposed to prevent the
public service. employees who are involved in starting up
companies from being penalized in terms
 Measures to promote mobility of the staff can
of research careers but since there is no
be adapted at a institution level (not
concrete measures, there is a risk that this
necessarily a law). Lobbying towards
principle is not put into practice.
decision-making persons is a decisive point.
13 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

14. Why?
 Why was the Law established?
The French government was not satisfied by the transfer of the results of public research to industrial products or
services. The Innovation Law was adopted to reverse this trend and provide a legal context that fosters the
creation of innovative technology companies, notably by young people, whether they be researchers, students or
employees.
 What was the context?
The law fit in a more general governmental action to stimulate the dynamism of enterprises in the field of research.
The 1999 Innovation Law introduced other measures alongside the mobility of researchers : decision to create
incubators and Technology transfer offices in each university, improvements for research tax credits...
In 1999 the national award for creation of innovative companies and thematic seed funds were also introduced by
the government.
14 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

15. Outcome
Applications to Commission of Deontology and decisions between 2000 and 2006
From 2000 to 2006 Nbr of referrals Nbr of agreements % of the total
(7 years)
Art.25.1 153 133 23
Art 25.2 482 418 72
Art 25.3 36 31 5
Total 671 582 100
Average for a year 96 83
Source : Etat de la situation et bilan au 31 décembre 2006, Ministère de l’Enseignement supérieur et de la Recherche, DGRI, Juin 2007
 Between 2000 and 2006, almost ¾ of the cases targeted consulting activities, nearly ¼ pertained to the creation of start-ups while
the participation in the management of the companies was less common.
The number of civil servants eager to create a company based on their research work has dropped significantly: from 30 cases/ year in
average to approximately10 since 2004. Staff from PROs seem more reluctant to quit their status of civil servant and consider in priority
other ways to transfer technologies.
15 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

16. Outcome
Evolution of the number of decisions of the Commission of Deontology
2000 2001 2002 2003 2004 2005 2006 Total
Nombre 93 94 138 117 67 98 77 684
d’avis
% of the 14% 14% 20% 17% 10% 14% 11% 100%
total
Source : Etat de la situation et bilan au 31 décembre 2006, Ministère de l’Enseignement supérieur et de la Recherche, DGRI, Juin 2007
After 4 years of increase, the number of referrals (i. e civil servants from PROs asking to benefit
from one of the schemes : creation, consulting activities, participation in the capital or in a board) has
decreased and tends to stabilise.
16 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

17. Outcome
Repartition of the decisions according to job categories in 2006
Job categories Number of referrals % of the total number Number of agreements % of agreements
of referrals delivered by the according to the job
Commission of cathegory
Deontology
University professors 21 27 14 67
University « Maîtres de 15 19 11 73
conférence »
Research Director 18 23 18 100
« Chargé de recherche » 11 14 11 100
Research engineers 2 3 2 100
Others 10 13 9 90
Total 77 100 65
Source : Etat de la situation et bilan au 31 décembre 2006, Ministère de l’Enseignement supérieur et de la Recherche, DGRI, Juin 2007
 Applications come from different backgrounds careers levels. Quite logically, researchers are predominant in this
classification, with 84% of the total for this year. The remaining 16% represent applications coming from administrative
and technical staff.
17 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

18. Plans for the future
• Will the best practice be continued/changed/adapted?
• If so, in what way will it be continued/changed/adapted?
The Innovation law is a result of a governmental action and the French Ministry of Higher
Education and Research has not announced changes of the law in its current form.
However, the Ministry has recently commissioned the Académie des Sciences to perform
a study of this scheme and to draw recommendations to improve it. The conclusions of
the Académie des Sciences were issued in February 2010 (see Suggested Readings).
The law may be modified in the future.
18 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

19. Lessons Learned
 Looking back now, what would you …
• … do different?
• … improve?
• … recommend to others?
The Innovation law is a result of a governmental action and this information is not
available.
19 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs

20. Suggested Readings
 Link to bibliography
G.D. Markman, P.T. Gianiodis, P. H. Phan, D.B. Balkin, Entrepreneurship from the Ivory Tower: Do Incentive Systems Matter? Journal of
Technology Transfer, Vol.29, no 3-4, August 2004
Académie des sciences, Rapport du groupe de travail sur la loi 99-587 du 12 juillet 1999 Innovation et recherche, 1st February 2010
http://media.enseignementsup-recherche.gouv.fr/file/2010/45/9/rapport_Academie_des_sciences_Loi_inno_136459.pdf
Ministère de l’Education supérieure et de la Recherche, Recherche et développement, Innovation et partenariats, Rapport 2008
http://media.enseignementsup-recherche.gouv.fr/file/inov_et_rech_techno_-_rapports/90/5/Bilan_SETTAR_23dec09_131905.pdf
Ministère de l’Education supérieure et de la Recherche, Innovation et recherche technologique, état de la situation et bilan au 31 Décembre
2006 http://www.enseignementsup-recherche.gouv.fr/cid21238/etat-de-la-situation-et-bilan-au-31-decembre-2006.html
 Link to code book
Mobility; Law; Entrepreneurship; Career; Spin-off; Consulting activity; Motivation
 Link to related websites
 Integral text of French Code of Research (see articles L 413-1 and followings)
http://www.legifrance.gouv.fr/affichCode.do?cidTexte=LEGITEXT000006071190&dateTexte=20090921
 Webpage on the 1999 Law on Innovation and Research, Ministry of Higher Education and Research
http://www.legifrance.gouv.fr/affichCode.do?cidTexte=LEGITEXT000006071190&dateTexte=20090921
20 | 19.02.2010 Name / Event
Involving Researchers in Spin-offs