Managing IntellectualProperty

Addressing the issues in the UK

Professor John ArcherPrincipal, Heriot-Watt

UniversityChair, SE Edinburgh & Lothian

A Dual Role

Principal (Rector) of Heriot-Watt University

Chair of the regional economic development company

IP ownership in the UK

• Employers - even Universities - own the IP created during employment.

• Students own their own IP but can assign to the University and be treated as members of staff

• Universities assign copyright in publications but not teaching materials

• Universities share royalty income with staff

• Universities license IP to companies but

do not normally assign it

Powering the Knowledge Economy

Universities play a key role at the heart of the knowledge economy…………….

They:

• Educate people with high level skills

• generate new knowledge

• apply new knowledge to enhance economic prosperity AND quality of life

Recognising the need

Universities play a key role at the heart of the knowledge economy…………….

Their ability to support the application of new knowledge depends increasingly on effective management of Intellectual property

Too often this process is less than smooth

Expertise, strategies and policies are needed

SE Edinburgh & Lothian

As Chairman of a regional economic development agency:

• IP being created - especially in biotech

• Often unsatisfactory interactions

• Lack of expertise on both sides

• Companies frustrated

• IP not being released

• Universities not earning income form IP

• Universities being challenged

Scotland’s IP Performance

• 8.6% of UK population

12%of total UK research funding

3rd in the world for research publications per capita

24% of invention disclosures in the UK HEIs

16% of new UK patents

20% of licenses from UK HEIs

19% of spin-out companies from UK HEIs

Scotland’s IP Performance (2)

Which in 2002 meant:

• 100 new technology licensing agreements

• 100 new companies since 1999

In comparison with the USA for each millon dollars research spend Scotland produces:

1.5 X number of licenses

5 X number of spinouts

3 X disclosures

but only 0.69 X number of patents

Scotland’s Efficiency

WHY is IP Management Important?

• To avoid conflicts AND conflicts of interest

• To understand levels of investment and price knowledge transfer appropriately

• To ensure that IP incentives are distributed fairly and consistently with other policies

• To ensure that exploitation does not overshadow knowledge creation

• To manage conflicts that will arise

500 research staff

£16 million in research income

@ 20-25 disclosures each year

@ 12 patents filed per year- only those with route to market or platform technologies

year one - no licenses ; year 3 - 4-5 licenses

3-4 spin-out companies each year

Heriot-Watt

IP revenue is shared - after costs

Staff/School/Patent Fund

Spin-outs

24% equity

exclusive licenses

royalty free at first

assigned when company is robust

Heriot-Watt Policies

Have a sensible and effective Policy in place

Manage it

Teaching, research, external activities & 3rd leg

Register of interests

Self-policing but with teeth

Conflict of interest

Collaborative Research

• Issues:• IP generated needs to be identified, evaluated and

protected• Future access to IP by the university needs to be

considered

• Research, if used for commercial purposes can infringe others’ IP and lead to litigation

• Publication may infringe others’ IP and expose the University to litigation - especially electronic publication

• expertise in commercialisation in the UK is

- largely - in the universities

Heriot-Watt & industry

In collaborative research with industry Heriot-Watt

Retains ownership of IP

Offers standard contract terms - generally accepted

Industry

meets full costs of research

gets 1st option on the IP

gets an exclusive licence

meets costs of defending licences

IP revenue sharing between

Staff/School/Patent Fund

Staff can hold equity in companies,

if University permits

Consultancy and CPD = returns to staff after costs

(currently 70% to individual/ 30% to School)

Discussions about 3rd leg and career progression

Incentives for Staff

The Guide

Managing Intellectual PropertyA Guide to Strategic Decision-making in Universities

UUK: AURIL:DTI: Patent Office

URL: http://www.patent.gov.uk/about/notices/manip/index.htm

Tensions

Commercialisation V Research Excellence

• expectation but no esteem for commercialisation

• knowledge transfer is not fully recognised

• commercialisation activity takes staff attention from basic research

• commercialisation takes research active staff out of basic research

• commercialisation requires professional expertise

Unresolved tensions

What are now “normal” duties and expectations?

• How do we handle the impact on research activity of the secondment of staff to spin-outs?

• Do we include commercial activity in promotion criteria?

• Do we reward research earners in the same way that we reward inventors with royalties?

• Do we continue to reward staff for “3rd leg” activity - CPD and consultancy?

Issues for InstitutionsCommercial activity provides valuable interactions

with industry but they need to be managed

Consultancy:

• may infringe IP owned by other companies

• may represent a potential leakage of IP

Research Funding:

• requires a clear contractual arrangement at institutional level

Personnel issues can arise :

• disputes between staff over IP ownership or invention need to be managed

Issues to Consider

Do we own the IP we need to own?

• To enable us to carry out research

• To use research results in future research

• To deliver our teaching, including ODL?

Can we use IP exploitation to recruit and retain staff?

Can we prevent conflicts of interests between staff?

What about student IP - do we infringe it ? Do we know?

Ownership - an issue?

The real issue is knowing what you have and

what you want to do with it

Much of it will have a “sell-by” date

All of it has no value if it is not used

IP needs to be used effectively

Institutional Missions

Knowledge Acquisition / Knowledge Transfer

If your mission is strongly regional in focus do you trade getting the best world price for diffusion locally?

If your mission is to be excellent in research do you prefer a direct financial return for research and allow free knowledge transfer?

Does research influence the quality of teaching?

3rd leg Benefits?

Activity Academic University Community

Collab.Research ? ? Spin-out ? ? Start-up ? ? Licence tosme X X Licence tomultinat’al

XConsultancy

Measuring Success

Measure the success of your activities

by your goals

Operational Information

Gillian McFadzean

Director, Technology & Research Services

Heriot-Watt University,

Edinburgh

EH14 4AS

email: G.McFadzean@hw.a.cuk

Tel +44 131 541 3881