UK University and Technology
          Transfer
           Michael Blakeney
     Queen Mary, University of London




    ...
Outline
• University technology transfer background
  – What and why?
  – Government policies and existing structure
• Tec...
What is University Transfer
                Technology
• Transfer the rights to use and commercialise
  intellectual prope...
Why Universities Transfer
            Technologies
• University:
  – Enhance industrial collaboration and increase
    uni...
UK University TT Background
• Strong government support
  – Higher Education Innovation Fund (HEIF2: £187m)
• Lambeth repo...
Protection of Intellectual Property
• IP ownership
  –   Research Councils vest IP in universities
  –   Industrial sponso...
Patenting
• First-to-file vs First-to-invent
   – Avoid immature disclosure
   – Impact on academic publication
• Patentin...
Copyright
• Copyright of software, database arising from
  research belongs University.
• University waives the ownership ...
Know-how/Trade Secret
• Advantage for process invention:
  – Resultant product is not readily linked to the patented
    p...
Commercial Research and
           Consultancy
• Industrial collaborators pay university to carry out
  research or consul...
Licensing vs. Spin-out
            Pros                                Cons                           Inventor
           ...
Licensing (1)
• Technology: Sold rather than bought
  – Patents are not granted
  – Speculative market value
  – Need sign...
Licensing (2)
• Considerations:
   –   Upfront payment: cover sunk patent costs
   –   Milestone payment
   –   On-going r...
Licensing (3)
• Improvements
   – Joint ownership?
• Warranties and liabilities
   – Condition of patent, the results, com...
Spin-out
• Technology – potential for sustainable high
  value
  – Large market
  – Strong competitive advantage
  – Prote...
Sources for Seed Funds
•   Money from family and friends
•   Organic growth – revenue
•   Bank loan
•   University Challen...
How
•   IP assigned/licensed to the spin-out
•   Equity split between University and inventors (50:50)
•   Cash investment...
Comparison of UK and US
              technology transfer
Per $1bn research                   UK universities             ...
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UK University Technology Transfer

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UK University Technology Transfer

  1. 1. UK University and Technology Transfer Michael Blakeney Queen Mary, University of London EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  2. 2. Outline • University technology transfer background – What and why? – Government policies and existing structure • Technology transfer – Protection (laws) + Exploitation (business) • Comparison of UK and US technology transfer • Trend and challenges EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  3. 3. What is University Transfer Technology • Transfer the rights to use and commercialise intellectual properties resulting from university research to industry. • Vehicles – Sponsored/collaboration research – Consultancy – Intellectual Property protection – Licensing and spin-out companies – Graduate training & professional development EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  4. 4. Why Universities Transfer Technologies • University: – Enhance industrial collaboration and increase university research income – Applied research influence markets/products – Retain entrepreneurial faculty • Industrial communities – Access leading edge scientific research and enhance ability in R&D • Public at large – Benefit from innovation and influence local economy EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  5. 5. UK University TT Background • Strong government support – Higher Education Innovation Fund (HEIF2: £187m) • Lambeth report • Knowledge & Technology Transfer Association • University Technology Transfer Offices – University subsidiary vs. Independent company – Activities: Invention Disclosure Negotiation and drafting License agreements Evaluation and Marketing Establishing spin-out company Patent Prosecution Royalty/Milestone Management EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  6. 6. Protection of Intellectual Property • IP ownership – Research Councils vest IP in universities – Industrial sponsors require IP ownership – Joint ownership is common – University IP policy • Staff: Employee invention, ownership belongs to university • Students? • IP subject matter – Patent, know-how, copyright, database right, design right EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  7. 7. Patenting • First-to-file vs First-to-invent – Avoid immature disclosure – Impact on academic publication • Patenting strategy: – UK national filing, proceed to PCT application – Costs roar after going to PCT national phase – Seeking exploitation within 30 months after initial filing – Potential problems? • Costs: – UK filing: 3-5K, PCT: 10-15K, PCT nationals: 15-25K EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  8. 8. Copyright • Copyright of software, database arising from research belongs University. • University waives the ownership of the copyright of research report, books, papers etc. in favour of the authors • Impact of E-learning EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  9. 9. Know-how/Trade Secret • Advantage for process invention: – Resultant product is not readily linked to the patented process • Disadvantage: identifiable? • Licensing agreement – Complex negotiation + lower royalty income • Spin-out: mixture of patent and KH is effective • Challenge: what if inventor leaves university? EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  10. 10. Commercial Research and Consultancy • Industrial collaborators pay university to carry out research or consultancy • IP ownership: – Company usually owns foreground IP – University owns background IP – Clear cut? • Value of the contract: direct cost + overhead (over 100%) • Further exploitation: – Unbalanced negotiation power – Licensing background IP to explore foreground IP EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  11. 11. Licensing vs. Spin-out Pros Cons Inventor Benefit Licensing •Avoid initial high R&D •Could be one-off Percentage of costs (exclusive) the licensing •Spread risks (royalty) •Under-performed incomes •High short-term incentive licensee Spin-out •Product development •Inherent risks Shareholding •Involving more •Medium-long return of the spin-out people/energy/money •Hard slog with no company •Really add value return EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  12. 12. Licensing (1) • Technology: Sold rather than bought – Patents are not granted – Speculative market value – Need significant product/application development • Grant of license – Patent, know-how, copyright of software etc. – Broad licensing rights with exclusivity, multiple field of use and wide territory to compensate potential high risks • Often combined with development agreement EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  13. 13. Licensing (2) • Considerations: – Upfront payment: cover sunk patent costs – Milestone payment – On-going royalty fee with minimum royalty targets – Equity of licensee company in place of royalty • Royalties: based on net sales – Depends on type of technology, stage of development, size of market, strength of patent and perceived risk • Examples: – university deals: 25:75 rule • Process(<1%), patented compound with significant market (8%), generally (3-6%) – BTG deals • Software (0-10%), Pharmaceuticals and health care (5-10%), telecommunication (10-15%) EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  14. 14. Licensing (3) • Improvements – Joint ownership? • Warranties and liabilities – Condition of patent, the results, compliance – Disclaimer • Performance Management – Best endeavour EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  15. 15. Spin-out • Technology – potential for sustainable high value – Large market – Strong competitive advantage – Protectable Intellectual property • Company - the vehicle to capture the value – Legal format: Limited liability – Professional management – Access to capital through equity investment – Access to market EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  16. 16. Sources for Seed Funds • Money from family and friends • Organic growth – revenue • Bank loan • University Challenge Fund (CLCUCSF) • Angels (rich individuals) • Commercial Fund (BT Brightstar, Gentech) • Venture Capitals (3i, TTP ventures) Increased risk! EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  17. 17. How • IP assigned/licensed to the spin-out • Equity split between University and inventors (50:50) • Cash investment for equity sets company value • Business planning and professional management • Product development, marketing and sales • High risk, high return – potential to be worth £100m in 5 to 7 yrs, ROI: 30-50% • Exit: trade sale or IPO EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-
  18. 18. Comparison of UK and US technology transfer Per $1bn research UK universities US universities UK as % US Invention disclosure 440 399 110% Licenses signed in year 206 120 172% Licenses yielding income 202 280 72% Licensing income $12.1m $31.4m 39% Spin-outs created 50 15 333% • Wright, Binks, Vahora and Lockett, University Commercialisation Survey, 2002, Nottingham Business School, Unico and AURIL EC-ASEAN Intellectual Property Rights Co-operation Programme (ECAP II) EC- Co-

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