Report v2

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High Value University-Industry Interactions A Study of 20 interactions

This study conducted in Canada

on the nature of interactions

between universities and industry

is generously supported bythe Sasakawa Peace Foundation of Japan

A Report prepared by Mongeon Consult ing

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Chapter One – Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Chapter Two - Industry Engagement in Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Chapter Three - Programs to Support University-Industry Interactions . . . . . . . . 13Direct Federal Support Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Indirect Federal Support Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Provincial Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Chapter Four - Study Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 The interview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Variability Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Qualitative Analysis o Interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Chapter Five - Conclusions and Recommendations or Further Studies . . . . . . . . 33

Appendix A - Interview Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . App.1

Appendix B - Summaries o all interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . App.2Ostara Nutrient Recovery Technologies and Old Dominion . . . . . . . . . . . . App.2Distil Interactive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . App.4Baader-Canpolar and Memorial University o Newoundland (MUN) . . . App.6Garrison Guitars and Andy Fisher (Memorial University) . . . . . . . . . . . . . . . App.8Cathexis and Memorial University o Newoundland (MUN) . . . . . . . . . .App.10Nortel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . App.123M and Proessor Jef Dahn (Dalhousie) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .App.14Bell University Labs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . App.17

Sembiosys and UTI (University o Calgary) . . . . . . . . . . . . . . . . . . . . . . . . . . .App.18Pratt and Whitney and the Concordia Institute o Aerospace Design and In-novation (CIADI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .App.21Provincial Crown Corporation: A Utility Company . . . . . . . . . . . . . . . . . . . .App.23YM Biosciences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .App.25FP Innovations, OpTest and UBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .App.27Doasco and Crash Forming (U Waterloo) . . . . . . . . . . . . . . . . . . . . . . . . . . . .App.29Bioriginal and Agriculture Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .App.31Innovotech and the Biolm Research Group (University o Calgary) . . .App.33Motor Coach Industries and Red River College . . . . . . . . . . . . . . . . . . . . . . .App.35OncoGeneX and UBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . App.37

Provincial Aerospace and Memorial University o Newoundland . . . . .App.39Pzer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .App.41

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .App.43

Table o Contents

High Value University-Industry Interactions: A study of 20 Interactionsby Marcel D. Mongeon, Mongeon Consulting Inc.

© Copyright, 2008, Mongeon Consulting IncFirst electronically published September, 2008

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Introduction

In Canada, the returns generated by public and industry expenditures on research atuniversities and other publicly-supported research institutions are a constant source of interest for government and other policy makers.

Te study underlying this report seeks to add to the knowledge on the practice of in-teractions between university and industry. Although the study was limited in scope,its findings and conclusions point to some differences from previous studies that areuseful for future study.

Tis study conducted in Canada on the nature of university-business interactions isgenerously supported by the Sasakawa Peace Foundation of Japan. Te work is partof a larger international study conducted in Canada, the United States, Japan and theUnited Kingdom and coordinated by the Council for Industry and Higher Educationof the United Kingdom.

Te international work will be reported on in an upcoming cross-cutting study and aninternational seminar currently anticipated to be held in Beijing in October, 2008.

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Chapter One: Introduction Page 1df

CHAPER ONE – INRODUCION

A recent opinion article written by the president of the University of oronto in the Globe and Mail 1 illustrates the challenge in assessing the quality of the interactions that business has with Canada’s uni-versities, colleges and research hospitals. In a brief comparison of university practices between Canadaand Israel, President Naylor writes:

Canadians sometimes confuse commercialization with commercially sponsored research. Te next gen-eration of creative minds and novel products will come from basic research environments, not by press-ing universities to focus on industry’s current needs.

Little attention has been paid to this trade-off: serving the needs of industry on one hand; and bringingthe results of basic research to the market on the other. President Naylor’s identification helps establisha differentiation for the results of the project which is reported on in this document.

Te purpose of the project is to identify how interactions between universities and business can bemade more effective.

wenty companies known to have had interactions of any type with universities, colleges or federal

government laboratories were selected for an in-person or telephone interview 2

. Te interviews in-volved a semi-structured questionnaire3 all of which were conducted in a uniform fashion.

Te results of each interview were outlined in a brief summary of the salient points of the interview which was then reviewed by the interviewee and comments or changes received incorporated intothe final summary report. All of the summary reports are available in Appendix B to this report. Allinterviewees were aware that the summary report would be published in this fashion and would befurther incorporated into the international comparison to be conducted among the data from the fourcountries.

Te interviews were, in part, chosen in order to achieve balance among the geographical and industrial

diversity of Canada. Specifically, the interviews were located in each of the following provinces:

British Columbia; Alberta; Saskatchewan; Manitoba; Ontario; Québec; and Newfoundland & Labra-dor

Although there were no interviews conducted in New Brunswick, Nova Scotia or Prince Edward Is-land, it is felt that the four interviews conducted in Newfoundland & Labrador provide an adequaterepresentation of the Atlantic region of Canada.

Te industries represented were the following:

1 Naylor, David. “Building an economy based on innovation”, Globe and Mail, July 24, 2008, page A15

2 Initially the companies or interview were selected by approaching various individuals at universities and

other institutions that have worked in the administration o research agreements between companiesand universities and asking them or potential interviewees. Approximately ty such potential intervie-

wees across Canada were identied. Potential interviewees were contacted to determine their interest inparticipating and, rom this pool, twenty interviews were secured.

3 A copy o the questionnaire is attached as Appendix A.

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elecommunications•Communications equipment•Information echnology • Aerospace•Heavy Manufacturing (steel, motor coaches)•Light Manufacturing (musical instruments)•Public Utilities• Water reatment•

Biotech•Pharmaceuticals•Food Processing•Food Supplements•Paper and pulp research•

In order to appreciate the information provided by the interviews, the analysis of which appears inChapter Four of this report, this report also includes two chapters of background information. Tefirst, Chapter wo, provides a background on industry engagement in Canada including both com-mercialization and sponsored research. Te second, Chapter Tree, provides information about thecurrent environment in Canada of programs to support industry engagement.

Te following definitions are suggested to help ensure that we do not fall into Naylor’s ‘trap’ of confus-ing commercialization and commercially-sponsored research. We define the following:

Commercialization:

Te same definition as used by the Conference Board of Canada4 is adopted:

A process through which economic value is extracted from knowledge through the production and saleof new or significantly improved goods and services

For the last 10 years, both federal and provincial levels of government – as noted in Chapter Tree be-low – have been supporting universities to engage directly in commercialization – sometimes referredto as technology transfer. Commercialization activities include the patenting, licensing and creation of start-up companies.

In this paper, commercialization by a university or other publicly-supported research institution alsoimplies that there were no pre-existing ownership or other intellectual property rights in favour of anexternal party.

Commercially-sponsored research:

Research occurring with an academic research institution that has any monetary or in-kind supportfrom a commercial entity.

Commercially-supported research has many possible outcomes depending on the conditions of thesupport. At one end of the spectrum, outcomes can be altruistic with no expectation on the part of the entity providing the support that they will have a report or any other access to the results of the

4 Guthrie, Brian and Treor Munn-Venn, Six Quick Hits or Canadian Commercialization: Leaders’ Roundtableon Commercialization, Conerence Board o Canada, April 2005

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research. At the other end, some support comes with the expectation that the entity providing thefinancial support will own the intellectual property outright.

In practice, the spectrum of possible outcomes is frequently confused as being related to the issueof institutional intellectual property policies. A review of such policies5 shows a diversity in Canadaranging from those that require institutional ownership to those with individual researcher ownership.However, as noted in a Statistics Canada survey including the subject6, intellectual property is usually negotiated in sponsored research agreements7. As noted in Munn-Venn, 2006, the real issue is that

there is a lack of clarity on intellectual property rights on commercially-supported contracts. Certainly this is supported by the foregoing information.

Industry engagement:

Any means by which a commercial entity interacts with an academic research institution.

Shadbolt & Kay 8 have suggested that ‘industry engagement’ includes four dimensions:

eaching and learning collaboration•Research and development collaboration•

Business development• Community, industry and regional development•

Te last term ‘industry engagement’ is not in common usage in Canada. More frequently encounteredterms are those of “industry liaison” and its derivative: ‘university industry liaison’9; and ‘technology

5 Hoye, University Intellectual Property Policies And University-Industry Technology Transer In Canada 2006Ph.D. Thesis, available at: hdl.handle.net/10012/2855

6 Read, Survey o Intellectual Property Commercialization in the Higher Education Sector, 1999, Statis-

tics Canada Catalogue 88F0006XIB, no. 1 available at: www.statcan.ca/cgi-bin/downpub/listpub.

cgi?catno=88F0006XIB2000001 see Table 12

7 The author has personal knowledge that even though about ½ o the 84 respondents to the question in

the previously oot-noted survey are reported as actually having policies on the issue, there was a greatdeal o conusion among respondents as to the meaning o the question. Many who reported that their

institution had a policy requiring a particular disposition really meant that they had a practice to seek aspecic ownership position between institution and sponsor.

A review o the actual provisions o institutions’ intellectual property policies indicates that the owner-ship o intellectual property is usually a negotiated issue. See, or example, section 2.2 (a) o the University

o Toronto’s Inventions Policy at www.utoronto.ca/govcncl/pap/policies/invent.html; University o BrutishColumbia notes at: www.uilo.ubc.ca/researcher_ srg_glossary.asp (under de. Assignment o IntellectualProperty Rights) that the university is “not restricted rom assigning intellectual property to third parties”

and section 3A o University o Waterloo policy 73 (available at: www.secretariat.uwaterloo.ca/Policies/policy73.htm) which provides that an exception to the ownership o intellectual property is the term o a

sponsored-research contract.

8 Shadbolt & Kay, Industry Engagement: Transorming Good Intentions into Good Practice, O ce o IndustryLiaison, Swinburne University o Technology

9 In French, the term, ‘University-industry liaison o ce’ easily translates into Bureau de liaisons-entreprises

université which yields the easily remembered acronym BLEU and is, thus, in general usage in the Province

o Québec

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transfer’. ‘Industry engagement’ may be a more desirable term for academic research institutions asbeing more aligned with industry expectations.

Tere is currently no forum in Canada where the practical aspects of university-industry interactionscan be examined and debated on a regular basis. Although, as will be noted in the next chapter, theConference Board of Canada engages in very pertinent policy research and study, there is little if any interaction available on a forum or association basis for those engaged in the actual negotiations be-tween publicly-funded research institutions and companies10. If such a forum existed, would the dif-

ferences noted in some of these definitional questions be easier to manage?

In offering these definitions and in the spirit of Naylor’s article, a last question arises: which of com-mercialization, commercially-sponsored research or industry engagement is important for a university or other public research institution to engage in? Which is most important? Although as will be pre-sented below, there are many programs which support any of industry engagement, commercializationor commercially-sponsored research, which is the most important task?; which is most worthy of beingsupported by public money?

Tis challenge is frequently expressed anecdotally to the author from those who work on the front linesof supporting activities in institutions. As can be seen from the foregoing definitions, if commercially-sponsored research has intellectual property rights being extended to the sponsor, any subsequent com-mercialization will likely only take place within the sponsor, not the institution. Naylor makes it clearthat commercialization and commercially-supported research are likely mutually exclusive. In a morebiblical manner: “No servant can serve two masters, because either he will hate one and love the other,or be loyal to one and despise the other.11”

Although both commercialization and commercially-sponsored research can be considered to be ‘in-dustry engagement’ a policy question that has yet to be asked – let alone answered – is: as betweencommercially-sponsored research and commercialization, which should be emphasized in Canadianuniversities and public research institutions?

Unfortunately, this study is unable to answer the question. Although there are examples of both com-mercialization and commercially-sponsored research among the projects on which the interviews werebased, the responses do not give suffi cient information on which to base an answer. Perhaps though,it is important to highlight the challenge, identify the need to answer the question and the need for aforum within which practitioners can discuss matters relating to it.

10 From the research institution perspective, there are two possible national associations that might be in-volved. One is ACCT Canada which is an association o our regional commercialization networks and the

other is the Canadian Association o Research Administrators (CAURA). The author provides contract ne-gotiation courses to individuals who work at university and other publicly-unded research institutions.

11 Luke 16:13

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Background

In order to understand the history of industry engagement and university-industry linkages in Canada, it is useful to examine the history. Tis chapter provides anhistorical review of the literature since the early 1980s and then examines OECDstatistics to examine Canada’s placement among G7 nations. Some brief consider-ation of anomalies in the US position are also presented.

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Chapter wo: Background Page 6df

CHAPER WO - INDUSRY ENGAGEMEN IN C ANADA

Since the 1980s, there have been two groups in Canada that have included university industry engage-ment as part of their research mandates. Tese groups are: the Corporate Higher Education Forum(CHEF) and the Conference Board of Canada (Conference Board). Although CHEF now appears tobe defunct12, the Conference Board has more recently conducted and reported on a number of studiesrelated to the issue.

CHEF held its inaugural meeting in 198313 and quickly produced a number of reports relevant to thesubject of university-industry engagement in Canada. Its initial report14 provided an overall review of what industry was looking for from universities. Tere were two main subjects: the training of studentsand the research to be conducted in universities. Generally, the report argued that universities wouldhave to forego some traditional privileges such as academic freedom and autonomy if it was to be morerelevant to industry.

Although the report’s recommendations were criticized by liberal commentators15, a second reporton interactions in research quickly followed in 198516. Again, criticized as “suggestive, superficial andslick”17, the second report actually led to changes in the actual practice of universities in contracting

with industry. Specifically, a more standard form of agreement came into use among many Canadianresearch-intensive universities in the 1980s the terms of which were readily accepted by industry 18.

Te 1980s at Canadian universities were characterized as following a ‘corporate agenda’19. Te periodsaw expansion of corporate support for programs – particularly in the natural and applied sciences

12 The corporation Corporate Higher Education Forum/Le Forum Entreprises-Universités is listed by Corpora-tions Canada as ‘Dissolution in Progress’ since 2004/12/16 under Corporation Number 1929909 (strategis.

ic.gc.ca/cgi-bin/sc_mrksv/corpdir/dataOnline/corpns_re?company_select=1929909)

13 Corporate-Higher Education Forum onds. – 1984 1994, Private Funds and Collections, Concordia University

(http://archives3.concordia.ca/Privateonds/P003.html)

14 Currie, Judith and Stephanie Maxwell, Partnership or Growth, 1984

15 Newson, Janice, The Corporate-Linked University: From Social Project to Market Force, Canadian Journal o Communication, Volume 23, Number 1, 1998

16 Cyr, Raymond, Spending Smarter: Corporate-University Cooperation in Research and Development , Corpor-ate-Higher Education Forum, 1985, p.104

17 Cameron, David M, Untitled Review , Canadian Public Policy, Vol. 12, No3 (September, 1986) p. 530-531

18 The common heritage o such research agreements can be ound even now where the intellectual prop-erty clauses o many university standard agreements are still entitled Technology Rights which is not acommon name or this type o section. See, or example, University o Ottawa: http://www.ttbe.uottawa.

ca/documents/drat_contract.doc

19 Newson, Janice and Harold Buchbinder, The University Means Business: The Universities, Corporations, and

Academic Work , Garamond Press, 1988, and Buchbinder, Harold and Janice Newson, Janice, Corporate-

university linkages in Canada: transorming a public institution, Higher Education, Volume 20, Number 4,December 1990

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and away from social sciences and humanities – and the creation of ‘matching grants’ programs which would match corporate contributions with federal public money. New structures of conducting re-search were also introduced during this period with the most significant being the creation of the na-tional Centres of Excellence program. Tis program has been described as the ‘most dramatic sciencepolicy innovation’20 since the First World War by instilling fundamental research with considerationsof the possible use of the results from that research.

Although concerns were raised about the impact that increases in corporate involvement would create

for university research21, there was steady growth in the number and value of university-industry col-laborations through the 1990s.

A Conference Board of Canada paper in 199922 reported that Canadian universities, based on Organi-sation for Economic Co-operation and Development (OECD) statistics, played a more pronouncedrole in the national R&D effort than universities in other G7 countries. Tis paper further noted 23 that among the G7 countries, Canada probably had the strongest university-industry linkages on thebasis of the share of university research that was funded by the private sector. We will shortly returnto this topic.

From the late 1990s to date, the use of appropriate metrics to measure the university-industry relation-ship has been a subject of concern. Statistics Canada has recognized the diffi culty in understandingthese activities24 and has attempted through expert meetings to receive some guidance on the subject.

Langford et al25 have noted that part of the metrics challenge is understanding the pathways to how knowledge moves from university into industry. Tey further note the limitations of current Canadianindicators and the challenge of separating input and output measures and indirect or proxy measuresfor outcomes. Tey note that the available Canadian input metrics are those on university researchexpenditures26 and the output metrics are limited to those available from the Association of University echnology Managers, referred to below, and the less frequent Statistics Canada data.

20 Fisher, Donald, Janet Atkinson-Grosjean, and Dawn House, Changes in academy/industry/state relations in

Canada: the creation and development o the networks o centres o excellence, 2001, Minerva 39

21 Buchbinder and Newson, 1990, or example pointed to the potential that university research would moverom a longer-term ocus – typical o more undamental research – to a shorter-term ocus more charac-

teristic o corporate needs to solve problems.

22 Zieminski, J., & Warda, J. Paths to Commercialization University Collaboration Research. Ottawa, ON: The

Conerence Board, 1999

23 At Chart 2

24 Earl, Louise, Fred Gault and Michael Bordt, Summary: Meeting on Commercialization Measurement, Indica-

tors, Gaps and Frameworks, Ottawa, December 2004, p.9

25 Langord, CH, Hall, J et al., Indicators and outcomes o Canadian university research: Proxies becoming goals? Research Policy 35 (2006) 1586; available at: doi:10.1016/j.respol.2006.09.021

26 They note that the Canadian Association o University Business O cers (CAUBO) as the original source o

these data although they are then incorporated into Statistics Canada data which are urther incorpor-ated into the OECD data which is presented below.

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It is suggested that the AUM data relating to invention disclosures, patent applications and issuancesand legal fees expended and reimbursed are really not output data at all but actually input or mid-point data in the commercialization continuum. In similar fashion, the number of licences and licencerevenue may be endpoints but it is diffi cult to understand what such data says about the university-industry relationship. On a Canadian basis, because there is little data on how licensing revenuesoriginate geographically (especially from inside and outside Canada), few conclusions can, or should,be drawn from these data.

It is useful to review the metric suggested by Zieminski and Warda, 1999: that of percentage of uni-versity research funded by the private sector. Rather than using the data reported on in that study,this paper presents the data directly from the OECD27. Tese data for six of the G7 countries28 arepresented since 1981 in constant dollars adjusted to 2000 and further parity power adjusted in thefollowing chart:

% HERD Paid by Business

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

1 9 8

0

1 9 8

5

1 9 9

0

1 9 9

5

2 0 0

0

2 0 0

5

Year

Canada

Germany

Japan

United Kingdom

United States

France

Chart 1 - % HERD Paid by Business

As can be seen, although Canada did enjoy the highest percentage of higher education research anddevelopment expenditures paid by business in 1996 and 1997, the trend since then among these coun-tries has shown Canada to be in a declining mode.

If we examine the absolute dollars of business’s investment in higher education research and devel-opment expenditures on the same basis for the same countries in the following chart, we note someinteresting trends over the period under review:

27 Specically we use Source OECD (ISSN 1608-1242) Research and Development Stiatstics, Series E10. High-

er education intramural expenditure on R&D – HERD – by feld o science and source o unding

28 G7: Canada, Germany, France, Italy, Japan, United Kingdom, United States. Italy has not been used be-

cause o signicant gaps in that country’s data set which do not permit easy comparison among yearsand countries.

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$ HERD Paid by Business

$0

$500

$1,000

$1,500

$2,000

$2,500

1 9 8 0

1 9 8 5

1 9 9 0

1 9 9 5

2 0 0 0

2 0 0 5

Year

M i l l i o n 2 0 0 0 C o n s

t a n t

Canada

France

Germany

Japan

United Kingdom

United States

Chart 2 - $ HERD Paid by Business

For Canada, the actual dollar investment by business has risen steadily over the period. Te answer asto why the percentage paid by business has declined can be seen when we look at the dollar investmentby government in HERD for the countries in the next chart.

$ HERD Paid by Government

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1980 1985 1990 1995 2000 2005

M i l l i o n 2 0 0 0 C o n s t a n t

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

F o r U S - M i l l i o n 2 0 0 0 C o n s t a n t

Canada

France

Germany

Japan

United Kingdom

United States

Chart 3 - $ HERD Paid by Government

As can be seen in a few years between 1998 and 2003, Canada has almost tripled its government con-tributions to HERD. Even though business contributions were also rising during this period, the rapidgovernment increase caused a percentage drop in the business contribution.

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A few additional observations on the OECD data are suggested.

In Chart 1, the percentage of HERD received from business, we see three distinct patterns for coun-tries since the late 1990s. Germany is the only country that continues to steadily rise and is clearly thehighest percentage investment. Does this suggest, following Ziemenski and Warda, 1999, that Ger-many has usurped Canada’s position as having the strongest university-industry linkages?

Other countries, including Canada, since the late 1990s have shown a wavering in the percent of

HERD supported by business. Since, for these countries other than the UK and the US, the dollarinvestment from business has steadily been climbing, it is suggested that it is incorrect to draw any conclusions as to whether or not university-industry linkages are growing or weakening.

However, in the cases of the United States and the United Kingdom, since the late 1990s both thepercentage and the dollars invested in HERD by business have been declining. As Chart 2 clearly shows for the US, there has been over a $200 million drop in the amount that industry contributes toHERD. Another way of putting it is that the US decline in HERD from business is about 1/3 of allCanadian industry expenditures on HERD.

One possible reason for the decline might be a shift in focus that occurred in universities relating to thecommercialization of research results. Usually called ‘technology transfer’ and given a significant boostin the US with the passage of the Bayh-Dole Act in the early 1980s, the leading technology transferorganization, AUM, acknowledges that there was a ‘boom period’ in the creation of technology transfer offi ces from 1983 to 199929.

Using AUM data on patent filings and licensing income received, we can also compare these data tothe dollar contribution to HERD since the early 1990s as follows:

Various US Data

0

500

1000

1500

2000

2500

1990 1992 1994 1996 1998 2000 2002 2004

Year

0

2000

4000

6000

8000

10000

12000

United States

Lic Income

Patents Filed

Chart 4 - US Data comparing AUTM and OECD Data

29 AUTM US Licensing Survey, 2005, p. 17.

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Clearly the timing of the increase in licensing income and patent filings is contemporaneous with thedecline since 2000 in business contributions to HERD by industry. Given that the gross licensingincome is in excess of $1 billion and the drop in business contributions of around $200 million, theremay be no problem at all. However, this is an issue that bears watching: does technology transfer affectuniversity-industry linkages?

A recent report30 from the Conference Board has also asked the question about technology transfer

offi ces in Canada. Although this report was flawed in not actually interviewing personnel in such of-fices, the report suggests that business is more concerned about the lack of consistency among offi cesof different universities than the actual function of technology transfer.

A recent paper31 also provides interesting direction to the challenge. Using a significant statistical study of researchers funded by Natural Sciences and Engineering Research Council of Canada (NSERC), thestudy concludes: “researchers transferred knowledge much more actively when no commercialization was involved than when there was commercialization of protected intellectual property.”

Te last finding also harkens back to the point established earlier: which should be emphasized? Com-mercialization or commercially-sponsored research? A corollary of this question is what expectations

exist in Canada as to how knowledge transfer should occur in practice? As will be noted below, thethree principal research councils are engaged in the question of how knowledge is transferred intopractice. Again, though, other than this effort, there is little policy direction – especially from govern-ments – as to the importance of and how knowledge transfer should occur.

30 Munn-Venn, Annual Innovation Report 2006: Lessons in Public-Private Research Collaboration: Improving In-

teractions Between Individuals, Conerence Board o Canada

31 Landry, R. j. Amara, N. Ouimet, M. , Determinants o knowledge transer: evidence rom Canadian university

researchers in natural sciences and engineering, Journal O Technology Transer, 2007, Vol 32; Number 6, pp.561-592

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Programs

Tere are many programs available in Canada and its provinces to foster university-industry interactions. Tis chapter attempts a brief description of the federal directand indirect programs which are available and also provides a brief description of someof the programs available in the three largest provinces. Tis description helps under-stand the context of the study.

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Chapter Tree: Programs Page 13df

CHAPER HREE - PROGRAMS O SUPPOR UNIVERSIY -INDUSRY IN-ERACIONS

In order to permit useful comparison in the international phase of the project that this study is a partof, it is helpful to have a summary of the Canadian environment which supports university-industry interactions.

In Canada, government support for university-industry interaction comes from federal and provinciallevels. Tis section relies on and updates previous work 32 outlining these programs. Te same order of programs is used as in the previous work cited.

DIREC FEDERAL SUPPOR PROGRAMS

Direct federal support programs are those for which the federal level of government in Canada providesdirect funding to wither the university or industry for research collaborations. Te indirect programsdescribed later under the appropriate heading relate to those programs where money is indirectly provided to one or the other of them (usually through the tax system) in recognition of their researchcollaborations.

Te bulk of direct research funding for university research and colleges in Canada is provided by a network of research councils: Canadian Institutes of Health Research (CIHR), Natural Sciencesand Engineering Research Council (NSERC) and Social Sciences and Humanities Research Council(SSHRC).

All three councils run various levels of programs designed to encourage research collaborations be-tween universities and industry. Tere are also programs run by all three councils described below astri-council programs.

CIHR A .

CIHR runs a number of programs to encourage university-industry collaborations. Te programs aresplit into two main themes: commercialization programs and innovation and industry programs.

Te commercialization programs assist universities and teaching hospitals to interact with partnersresponsible for delivering the benefits of health research. Programs include seed funding for pre-com-petitive research development of projects deemed to possess commercial potential (Proof of PrincipleProgram), provides opportunities for entrepreneurial training (the Science to Business Program) andprovides support for technology transfer process elements and infrastructure. (Te tri-council Intel-lectual Property Mobilization Program reported below)

CIHR has identified that many of the inventions/discoveries arising through academic research are at

a stage beyond discovery-driven research and yet are often of uncertain commercial utility or insuf-ficiently developed to be of interest to relevant receptor companies and potential investors. Such intel-lectual property may never be licensed or commercialized, or take years to do so, without additionaltargeted research, market research, investment and business development activities. CIHR’s Proof of Principle Program aims at filling part of this funding gap.

32 Industry Canada (1995) The University-Industry Relationship in Science and Technology , occasional PaperNumber 11

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Te Proof of Principle Program is divided into two phases. In Phase I grants up to $150,000 for upto 12 months are available. In Phase II, up to $250,000 from CIHR for up to 12 months is availableagainst an investor matching CIHR funds at a 2:1 ratio.

Te two main parts of CIHR’s innovation and industry programs include: the CIHR/Rx&D Col-laborative Research Program; and the CIHR/SME (Small and Medium Enterprise) Research Pro-gram. Under the CIHR/Rx&D Collaborative Research Program, the eligible company partner is amember of Canada ‘s Research-Based Pharmaceutical Companies (Rx&D33). Te Program promotes

peer-reviewed research and enhances the training and development of health research personnel andopportunities in Canada. Te Program is designed to enable scientists, clinicians and members of thefull spectrum of health professionals, and Rx&D members to optimize their access to the unique op-portunities and advantages offered by CIHR’s translational research opportunities, including clinicalresearch.

Te CIHR/SME (Small and Medium Enterprise) Research Program encourages, stimulates and en-ables health research programs of start-ups, university spin-offs and SMEs. Universities or researchhospitals must secure partnered funding from an eligible company before a registration can be submit-ted. A company is eligible provided that it: is incorporated in Canada (exceptions will be consideredupon receipt of documentation that a researcher has been unable to develop a collaboration with a

suitable federally or provincially incorporated company in Canada); demonstrates adequate resourcesto meet its commitment to a program; and, has a demonstrable ability to apply the results of researchand development itself or through agreements with other companies having the capacity to produceand market products and processes.

An industry partner must contribute to the grant at a 1:2 (CIHR: Industry) ratio (including eligiblein-kind contributions). Up to 25% of an industry partner’s required contribution may comprise of in-kind (cash-equivalent) contributions.

CIHR also funds the creation of research chairs in collaboration with industry. Contributions are gen-erally over a five year period and support a researcher in a specified area.

NSERCB.

NSERC runs a wide range of programs that help increase the number and quality of university-industry interactions. Te programs are split into three major areas: programs to support students andfellows; programs for project research; and, programs for the establishment of research chairs. Fullcurrent details can be found at: www.nserc.gc.ca/partners/indust/prog_e.asp.

Among the programs for project research, there is a hierarchy of programs that matches the idea toproduct cycle. Te Strategic Project Grants (SPG) program is targeted to increase research and trainingin areas that could strongly enhance Canada’s economy, society or environment within the next ten

years. Te program is ideal for early-stage, high-risk research and does not require a cash contributionfrom industry. However, industrial interest must be real and include collaboration at all stages of theproject and in the validation of the results.

Te Collaborative Research and Development (CRD) Grants program is further along the spectrumfrom the SPG program and is targeted to give companies that operate from a Canadian base access to

33 Not included in the membership o this organization are the generic pharmaceutical manuacturers.

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the unique knowledge, expertise and educational resources available at universities and colleges and totrain students in essential technical skills required by industry.

CRD projects can be at any point in the R&D spectrum. Eligible collaborations include focused proj-ects with short- to medium-term objectives, as well as discrete phases in a program of longer-rangeresearch. ypical grants are in the $5,000 to $500,000 per year range and a matching contribution of the amount received from NSERC is expected from the industrial partner, one-half of which can bean in-kind contribution.

Te last program, the Idea to Innovation (I2I) Program, is designed to accelerate the pre-competitivedevelopment of promising technology and promote its transfer to Canadian companies. I2I has twodifferent phases to which application can be made. In the first phase, the direct costs of research aresupported by NSERC; in the second phase, they are shared with a private partner. Te technology development may begin with a Phase I (Reduction-to-Practice Stage – i.e., demonstrating that theinnovation is suffi ciently tested and will work for its intended purpose) project followed by a Phase II(echnology Enhancement) project or, if the development is at a later stage, it can start directly with aPhase II project. In any case, a maximum of three years’ funding will be available for any given project.Phase II projects expect the cash contribution from the industrial partner to be at least 40 per cent of the amount received from NSERC.

SSHRCC.

Although not normally viewed as a source of funding for university-industry collaborations, SSHRCin more recent years has expanded its funding programs to encourage knowledge translation projects with appropriate groups external to universities. Although non-profit community groups – which isthe targeted partnering group of SSHRC’s programs – are clearly not industry, the notion that suchprograms exist are certainly indicative of SSHRC’s interest in broadening its researchers’ interests tothe practical impact of their research. Although additional detail is not provided here, they are listedin the interest of completeness.

RI-COUNCIL PROGRAMSD. As the name implies, ri-Council programs are those that involve all three research councils. Of these,the most significant program is the Networks of Centres of Excellence (NCE). Another tri-council pro-gram described below is the Intellectual Property Mobilization program. Not described is the CanadaResearch Chairs program which, although providing significant support for researchers at universities,is not tied to industry funding.

As noted above, the NCE program has been referred to as the ‘most dramatic science policy innova-tion’ in Canada. Te program is now four different program streams.

Te original NCE program was first funded in 1989 and made a permanent government program in1997. Funding is currently at over $80M per year which in turn levers an additional amount of morethan $20 M per year from the private sector. An NCE funded network runs for a seven year period andmay be renewed once only for a maximum 14 year term. Networks are funded in well defined subjectareas and conduct research supporting students and faculty members in universities across the country.Business is an important part of the networks providing both monetary support as well as participatingin the governance and setting the research direction.

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A newly announced NCE program is that of Business-Led Networks (BL-NCE). Announced in the2007 federal budget, the new BL-NCE Program’s goal is to fund large-scale collaborative networksto support private sector innovation in order to deliver potential economic, social or environmentalbenefits to Canadians and to promote an Entrepreneurial Advantage. Over $45 M is available to fundfive BL-NCEs over a four year period.

BL-NCEs differ from existing NCEs in that they exist for a shorter term, are directly led by business(rather than university personnel) and focus on solving business research needs that have been identi-

fied. Te intention is to increase private sector investments in research in Canada, support the train-ing of skilled researchers, and optimize the timeline between research and commercialization. Te 10projects currently selected to proceed for further consideration are all led by industry groups.

A third program known as the Centres of Excellence for Commercialization and Research (CECR)program seeks to create world-class centres to advance research and facilitate commercialization of technologies, products and services in identified priority areas. 11 CECRs have been provided $15 Min funding each in the areas of health, information and communications technology, environment,and energy and natural resources. As this program has just recently begun, it is not clear what theimpact will be.

Te fourth and final program is an Industrial R&D Internship Program (IRDI) which is run by an umbrella group of NCEs. Te program over two years will help place 1,200 Canadian graduatestudents and post-doctoral fellows with businesses all over the country. Te interns will undertakeresearch that meets the innovation needs of the host firms which will share the cost of hosting theinterns. Te internships consist of collaborative research projects involving graduate students and post-doctoral fellows, their supervising professors and industry partners. Over $8 M has been allocated forthe first program.

A tri-council program known as the Intellectual Property Mobilization34 (IPM) program is targetedto assist in the transfer of knowledge and technology residing in Canadian universities, hospitals, andcolleges for the benefit of Canada. IPM grants are intended to further strengthen the ability of these

institutions to manage their intellectual property, attract potential users, and promote the professionaldevelopment of intellectual property personnel through a network approach. Te ultimate goal is tocontribute to strengthening Canada’s competitiveness in a knowledge-based global economy.

Te program provides funding in partnership with universities, hospitals, and colleges to support ac-tivities related to managing and transferring intellectual property resulting from research falling underthe jurisdiction of the three federal granting agencies. Specifically, the program encourages institutionsto coordinate their approaches and activities in support of innovation on a local, regional, and nationalbasis. Te IPM program also aims to increase the pool of trained technology transfer personnel withhands-on experience available to Canadian academic institutions.

C ANADA

FOUNDAION

FOR

INNOVAIONE

.Te Canada Foundation for Innovation35 (CFI) is an independent corporation created by the Gov-ernment of Canada to fund research infrastructure. CFI’s mandate is to strengthen the capacity of universities, colleges, research hospitals, and non-profit research institutions to carry out research and

34 Intellectual Property Mobilization Program (IPM) website (www.nserc.gc.ca/proessors_e.asp?nav=pronav&lbi=b6)

35 Canadian Foundation or Innovation website (www.innovation.ca)

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technology development. Since its creation in 1997, CFI has committed more than $3.8 billion toresearch institutions across Canada. CFI normally funds up to 40 percent of a project’s infrastructurecosts which are invested in partnership with eligible institutions and their funding partners from thepublic, private, and voluntary sectors who provide the remainder.

In many provinces in Canada, the provincial government hosting the institution will match the CFIcontribution of 40% leaving just 20% to be funded. In some regions of the country, there are alsofederal agencies directed to address fiscal inequalities among regions that may also provide appropriate

matching funding. Tese are described below under the heading of Federal Regional Development Agencies.

FEDERAL MINISRIES AND A GENCIES F.

Tere are a large number of federal ministries and agencies. Of these, 16 belong to an umbrella groupknown as the Federal Partners in echnology ransfer (FP) which helps to provide informationthat assists in research collaborations as well as technology transfer and other industry engagementactivities.

Active since 1916, the National Research Council (NRC) of Canada is the Government of Canada’s

leading federally funded resource for science and technology (S&) development and commercializa-tion. NRC runs the Industrial Research Assistance Program (IRAP). IRAP provides non-repayablecontributions to Canadian small and medium businesses interested in growing by using technology tocommercialize services, products and processes in Canadian and international markets.

Although not directly a program that supports university-industry collaborations, numerous IRAPfunded projects are conducted at universities. Many IRAP industrial technology advisors are co-locat-ed in universities and an important function they serve is to help Canadian SMEs understand what re-search capabilities are available throughout the university and college and federal government systems.Support provided by the IRAP program to businesses is about $130 M36 per year.

Many other ministries and agencies also run programs within their mandates which help encouragepublic-private partnerships in research. Many of these will also involve university-industry collabora-tions. As an example, Agriculture and Agri-Food Canada (AAFC) runs a number of programs37 suchas the Advancing Canadian Agriculture and Agri-Food Program, and the Agricultural BioproductsInnovation Program which can support such collaborations in association with itself. In fact one of thecases reported on in this study arises from a direct AAFC-industry collaboration.

FEDERAL R EGIONAL DEVELOPMEN ORGANIZAIONSG.

Canadian federal government policy identifies four specific regions of the country which require special at-tention. In order to address economic disparities, special federal organizations have been developed. Tese

organizations have a number of programs that, among other things, serve to enhance university-industry col-laborations.

36 National Research Council, Annual Report, 2007 (http://www.nrc-cnrc.gc.ca/aboutUs/corporatereports/

annual_report2007/pd/nrc_ar_2006-2007_e.pd ) notes: Grants and contributions costs totalled $143million in 2006-07, with most o this unding going to small and medium-sized enterprises (SMEs) through

the NRC-Industrial Research Assistance Program (NRC-IRAP).

37 Details o which can be ound at www.agr.gc.ca, selecting Science and Innovation and then selectingPrograms and Services

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FedNor, the organization concerned with Northern Ontario, provides funding to help Northern On-tario companies interact with those who can provide applied research and development and assist todevelop, apply and transfer new technologies to the challenges of northern Ontario.

Te Atlantic Canada Opportunities Agency (ACOA) launched the Atlantic Innovation Fund (AIF)in 2001. AIF is designed to help businesses be innovative and to interact with research institutions inthe Atlantic region. Commercial projects can receive 75% of the project costs from the program andany payments made to industry are conditionally repayable. Other programs run by ACOA (such as

the Business Development Program38 and the Seed Capital39 program) while not specifically designedto encourage university-industry research collaborations provide funding directly to a company whichmay, in turn, be used for collaborations with public research institutions.

Although Western Economic Diversification Canada40 (WECD) has similar goals to those of FedNorand ACOA, its support is less direct for university-industry interactions. Its Western DiversificationProgram41 only provides support to non-profit entities. However, under the mission to ‘support acompetitive and expanded business sector’ in the region, WEDC has funded the West-Link network which has been singled out42 as a model of how to train people who can work between business anduniversity communities.

Te federal government also provides targeted funding for the province of Quebec through the Eco-nomic Development Agency of Canada for the Regions of Quebec43. Tis agency is responsible forpromoting the long-term economic development of the 11 regions of Quebec. Te Agency helps Que-bec SMEs directly by providing counselling services and financial assistance. It also encourages regionalbusiness communities and the organizations which support them, including knowledge institutions(research centres, college technology transfer centres and universities)

INDIREC FEDERAL SUPPOR PROGRAM

Tere are two types of programs by which the federal government in Canada provides indirect supportfor university-industry collaborations. Te first is tax credits for expenditures on research and devel-opment – which indirectly support the area – and the second is federal support for the creation andfunding of innovative start-up companies and businesses.

Te Scientific Research and Experimental Development (SR&ED44) program is a federal tax incentiveprogram, administered by Canada’s taxation authorities, that encourages Canadian businesses of all

38 Atlantic Canada Opportunities Agency website (www.acoa.gc.ca/e/nancial/business.shtml)

39 Atlantic Canada Opportunities Agency website (www.acoa.gc.ca/e/nancial/capital.shtml)

40 Western Canada includes the provinces o British Columbia, Alberta, Saskatchewan and Manitoba. Web-site: www.wd.gc.ca

41 Western Diversication Program website (www.wd.gc.ca/301_ENG_ASP.asp)

42 Guthrie, Brian and Treor Munn-Venn, Six Quick Hits or Canadian Commercialization: Leaders’ Roundtable

on Commercialization, Conerence Board o Canada, April 2005

43 Economic Development Agency o Canada or the Regions o Quebec website (www.dec-ced.gc.ca/asp/

General/main.asp?LANG=EN)

44 The acronym is colloquially pronounced as ‘shred’ and the program requently reerred to as ‘shred cred-its’

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sizes, and in all sectors to conduct research and development in Canada. It is the largest single sourceof federal government support for industrial R&D. Although not specifically designed to encourageuniversity-industry collaborations, the Income ax Act provisions45 relating to the SR&ED programmakes it clear that payments made to universities for research projects qualify for the program. Teprogram provides for refundable tax credits varying on specific criteria46. Te effective rate of the creditalso varies from province to province as described below.

Indirect support programs for the creation and funding of innovative start-up companies are even more

indirect. Trough the Business Development Bank of Canada (BDC), a financial institution owned by the government of Canada, a number of venture capital programs are offered effectively financed by the federal government. Using more commercial norms, BDC echnology Seed Investments Groupprovides financing for the creation of technology businesses.47

Te venture capital arm of BDC regularly receives funding commitments from the federal governmentto support the objective of supporting the creation and funding of innovative start-up companies andbusinesses.

PROVINCIAL PROGRAMS

In addition to the federal regional development programs described above, many provinces also sup-port industry engagement directly and indirectly. Rather than attempting a comprehensive listing of such programs, this section will highlight the programs in the three largest provinces: Ontario, Quebecand British Columbia.

In Ontario, programs supporting university-industry interactions are grouped under the Ministry of Research and Innovation48 (MRI). Of the 19 programs listed on the referenced website, a few deservesingling out for consideration.

Te oldest program is the Ontario Centres of Excellence (OCE) program49. Similar in operation andfocus to the federal NCE program, the OCE program is focused on 5 areas of science: Communica-

tions and I; Environmental Science and Energy; Material and Manufacturing; and, Photonics. A number of programs run by the OCE specifically focus on and encourage university-industry researchcollaborations.

45 Income Tax Act (Canada), specically, subparagraph 37(1)(a)(ii)

46 A more complete summary o the program can be ound at http://www.cra-arc.gc.ca/E/pub/tg/t4052/t4052-e.html

47 Business Development Bank o Canada website (http://www.bdc.ca/en/business_solutions/venture_cap-

ital/about_us/techno_investments.htm)

48 See Ministry o Research and Innovation website (www.mri.gov.on.ca/english/programs/MRI.asp) or alisting o programs. Other provincial ministries and secretariats also operate programs supporting re-

search and, indirectly, university-industry interactions. A listing is at: www.mri.gov.on.ca/english/pro-grams/Ministries.asp

49 See Ontario Centres o Excellence program website (www.oce-ontario.org/Pages/Home.aspx)

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Another significant project is the MaRS ‘Discovery District’, a two-square kilometre area of downtownoronto, Ontario, encompassing universities and research hospitals50. Te cornerstone of MaRS is atwo phase real estate project which also houses the MaRS Incubator, which provides companies withoffi ce and lab facilities for research, the Business Resource Centre, and the MaRS Collaboration Centreconference facility, business support services and retail operations. Te project provides indirect sup-port for university-industry collaborations in large part by facilitating interactions of all types betweenthe two groups51.

Other MRI programs more specifically provide support for university-industry interactions. Even pro-grams which on their face might not appear to be in support of industry engagement activities – suchas the Early Researcher awards, which helps researchers beginning their careers to build their support– include the potential of matching private sector contributions52 which, in turn, encourages engage-ment.

In Québec, programs to encourage industry engagement are grouped together in the Ministère deDéveloppement économique, Innovation et Exportation53. In Québec, the ‘technology transfer’ func-tion is generally managed by within universities by a Bureau de liaison enterprise-universités54 assistedfor commercialization efforts by Sociétés de valorisation which are shared among universities and inlarge part, capitalized by provincial funds. Tere are also Centres de liaison et de transfert in specific

subject areas. Five exist in targeted subject areas designed to be bridges between universities and indus-try. Finally, there are three research councils which are closely mapped to the federal councils as well asa number of other science councils targeted in specific areas.

An interesting aspect of publicly-funded research institutions in Québec is the provincial government’sintervention in intellectual property policies. A common intellectual property policy exists among allsuch institutions with a minimum level of requirements including an initial position of joint owner-ship between researchers and institutions55. It is be noted that his policy does not prevent transfer of ownership of intellectual property to sponsors under commercially-sponsored research contracts.

Te Quebec government also tracks a score card of sorts relating to the Quebec innovation system.

Available only on its French-language website56

, various metrics relating to its science strategy aretracked and displayed for all to compare to other jurisdictions. For university-industry relations, onthe local environment set of metrics at: www.mdeie.gouv.qc.ca/index.php?id=2950, the percentage of

50 MaRS website (www.marsdd.com/MaRS-Home.html)

51 The events listing at www.marsdd.com/Events.html is one o the most comprehensive listings o interac-tion events available in Canada.

52 Ministry o Research and Innovation (Ontario) website (www.mri.gov.on.ca/english/programs/era/pro-

gram.asp). This program will match up to $50,000 in private sector contributions.

53 In reviewing documents rom the Province o Québec, care must be taken to ensure the correct transla-tion o terms. As noted in Milot, 2005, ‘commercialization’ is not correctly translated as ‘commercialisation’

but more correctly by ‘valorisation’..

54 Literally a university industry liaison o ce.

55 See: www.mdeie.gouv.qc.ca/index.php?id=4052

56 See: www.mdeie.gouv.qc.ca/index.php?id=2948

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university research expenditures – the same number suggested in the use of OECD data above – isreported. No other metrics related to the subject are suggested.

In British Columbia, the Ministry of echnology, rade and Economic Development has responsibil-ity for fostering university-industry relationships. Research and innovation policy was transferred tothis ministry as of July 2008.

Funded by this ministry, the BC Innovation Council (formerly the Science Council of British Colum-

bia) funds a number of programs. Most university-targeted programs are focused on commercializa-tion efforts. Although some of these – such as the Proof of Concept Development Fund – are open toindustry for work at universities, BCIC’s programs are generally targeted to commercialization efforts within BC-based universities.

Other provinces also run similar programs. However, those of BC, Quebec and Ontario give a flavourof what is available to foster university-industry relationships.

Indirect programs in all provinces also help support relationships through the tax credit system. Eachprovince has different incentives. Rather than attempting to describe all of the different systems, refer-ence is made to the latest summary provided by the federal government to attract foreign companies

at: www.investincanada.gc.ca/download/142.pdf which provides a summary for all of the provincesshowing that the combined tax credit rate can range from a low of 23.6% to a high of 36%. Referenceis also made to the study findings on the issue of tax credits.

CONCLUSION

As can be seen, there is no shortage of programs available to fund interactions between universities andother publicly-funded research institutions and industry. Te challenge seems to be in communicatingall of the programs in a manner that is useful to industry. As will be seen in the analysis of the study results below, many projects relied on the existence of matching programs. However, it was invariably the university – and likely the individual researcher – who was aware of the existence of the fundingprogram, not the industrial partner.

A cursory review of many university’s research web sites, show a dearth of information relating tomatching programs. Although many such websites have information about some programs, there is noconsistency in how information is made available to industry. Few websites give industry an easy way to access the research infrastructure of an institution or even useful contact information57.

Another anecdotal observation made to the author by those who work in the administration offi cesof research institutions is that the multiplicity of programs involves a great deal of administrativeoverhead. Since each program involving the industry engagement function will likely have regularmeetings of collaborating institutions, the number of programs will lead to an exponential increasein the administrative burden for such offi ces. Such considerations should be made as programs are

introduced.

57 On the websites o many universities, it is di cult to determine the correct addressee o an inquiry; theyusually list all staf in a department with little direction to an industrial inquiry as to whom to contact.

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Analysis

Te actual study results are analyzed in this chapter. wo sections of analysis are given:the first is a variability report in a format consistent with that being prepared for thestudies being conducted in other countries to allow comparison among the countries.Te second section provides narrative analysis with the objective of drawing conclu-sions from the interviews.

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Chapter Four: Analysis Page 23df

CHAPER FOUR - SUDY FINDINGS

HE INERVIEW

Te heart of each interview was first to ask the interviewee to identify a research interaction with auniversity 58 which they believe generated the most value for their organization. If such an interaction was identified, the balance of the interview was based on that interaction.

In six interviews, the interviewee was not willing to disclose a specific interaction. Generally these casesfell into one of two categories: the interviewee was very large or very small. In the case of very largecompanies, generally the unwillingness arose due to not wanting to single out any specific interactionfor special consideration; in the case of small companies, the unwillingness was as a result of competi-tive concerns given that this report would become public providing details of the interaction.

In the case of interviews where the interviewee was not willing to disclose a specific interaction, the in-terview continued in the normal form making appropriate changes to reflect the interviewee’s generalpractice. In the analysis below, these are organizations referred to as having a generalized system.

Te balance of this chapter reports on the interviews in two sections. First, a statistical report on six

principal dimensions is given. Te six dimensions were chosen in order to maintain comparability across the international studies being conducted using the same methodology. Te second sectionthen examines the actual interviews qualitatively and attempts to identify trends and patterns in theinterviews. Te next chapter identifies conclusions and findings from the interviews.

V ARIABILIY R EPOR

CLASSIFICAIONS OF INFORMAION

CONAC ORIGINS A .

How did the contact between the University and the Company which led to the interaction arise ?

Number %

University approached the Company (note 1)pany (note 1) 6 30

Contacts met through common networks 1 5

Contacts were already amiliar with each other 7 35

Company Approached the University (note 2) 6 30

Notes:5 o these are companies that have ‘generalized’ systems to choose projects.1)One uses a ‘generalized’ system to choose projects2)

In the first category of ‘university approached the company’, five of the six respondents are those thatdescribed their general practices. It is believed that the generalized approach of these companies may,in fact, be a response to the large number of requests that they receive from universities given the sizeor reputation of the companies.

58 Although the interview asked about university research, one interviewee provided inormation about an

interaction with a community college (Motor Coach Industries) and one described an interaction with aederal government laboratory (Bioriginal). Other interviews also dealt with interactions with a univer-

sity’s a liated hospital or research hospitals in general. These interviews have been retained as indica-tions that, in the Canadian market, such institutions are considered in association with universities.

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In the case of the middle two reasons (common networks and already familiar), it is believed that giventhe relative smaller size of the research market in Canada, companies and universities are more likely to already be familiar with each other rather than having to rely on common networks.

Another comment is in order given the comments in the conclusions of Chapter Tree on the dif-ficulty that companies may have in determining whom within a research institution to contact. Inthe six cases of companies approaching university, in many cases, the contact was where some otherrelationship might have existed between the the parties. Respondents were only classified into ‘already

familiar’ if the previous contact was also a research relationship.

If the six responses in the final category were reclassified on that basis, there would be very few true‘company approached the university’. Te implication of this could be two-fold: good projects comefrom existing relationships of any type or where the university seeks out the corporate partner and,secondly, research institutions could do a better job at delivering relationships with industry.

PROJEC ORIGINSB.

By what process was the project which developed between the university and the company formu-lated?

Number %

University specifed the project (note 1) 2 10Common development as an emergent process 3 15Company identifed issues with which it was aced (note 2) 7 35

Company identifed a technical objective or problem to whichthe university responded (note 1) 6 30Company specifes the project 3 15

Notes:In one case (YM), a company with a generalized process both licensed technologies on ofer as1)well as advising what technology areas it was interested in. Accordingly, it is classied under both.O these, 4 companies are companies with ‘generalized’ systems to choose projects.2)

As noted in the previous section, the contact is most likely to originate within the research institu-tion. However, when we move to how the actual project subject arises, we see that the research-sidehas much less say in what the actual project will be. As can be seen by the statistical analysis only oneactual project was specified by the university, all other projects to some extent or another moved fromthe company.

We also note that even though the company is predominantly the source of the project, it is rarely afully-specified project. In only one case59 did the project involve a Request for Proposals process. Morelikely was a project arising from discussions between industry and institutional researchers on eitherproblems or technical objectives that the company had.

It should be remembered that the projects included by the interviewees were based on the highestperceived value. A possible inference to be drawn from this statistic is to note that it is likely not rep-resentative of all university-industry interactions60 but does suggest that the highest value interactionsdepend on the company – rather than the university – defining the project objectives.

59 Motor Coach

60 In act, the author’s own experience suggests that most university-industry projects have their origins inthe university researcher speciying the project. This usually occurs as a result o the university researcher

having a research idea that they then seek research unding or.

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PROJEC IMPLEMENAIONC.

Trough what modality was the project implemented?

Number %

License o technology oered by university (note 1) 3 15

Collaborative research (with license i appropriate) (notes 2 and

3)10 50

Consortium research (notes 4 and 5) 5 25

Consultancy 0 0

Graduate / Student Project in Company (notes 3 and 5) 3 15

Recruitment / Sta Development (notes 2 and 5) 2 10

Network Development (note 5) 1 5

Provision o Space (note 6) 2 10

Notes:One o these respondents (Innovotech) with a generalized approach has indicated a willingness to1)licence in technologies rom universities as part o that process.One o these respondents (Motor Coach) has identied two key implementations being Collabora-2)

tive Research and Recruitment o Staf.One respondent (Provincial Crown Corporation) with a generalized process has identied two key3)implementations being Collaborative research and Student projects.In Canada, there is a popular program known as an ‘Industrial Research Chair’ which involves the4)creation o a co-unded dened term research chair in a specic area. These have been includedunder consortium research. Specically, Baader-Canpolar and 3M have identied such chairs.One respondent (Pratt & Whitney) has identied a project with Consortium Research, Student5)Projects, Staf Recruitment and Network development as key implementation points.

Two respondents (Cathexis and Innovotech) have identied the provision o space by a university6)as the most signicant value they have received.

In this table, there were the largest number of multiple entries per project. In many cases, projectssought to accomplish a number of the options. Although generally a prime option could be identified,

in a number of cases, multiple entries for the same project have been identified. Only one of thesemultiple entry situations relates to a ‘generalized’ interview respondent as identified in the notes.

No ‘consultancies’ have been identified in Canada. Tis may be a function of the selection methodolo-gy used to select interviewees which relied on institutional suggestions. Since, in Canada, consultanciesare rarely reported to institutions, a selection bias may have eliminated this option from possibility.

Te ‘Provision of Space’ option identifies two projects where the company received value (directly related to its start-up phase) from the provision by the University of space.

Te final observation relates to the general lack of importance of patents and their licensing in the re-

sults. Although there were a few mentions of the licensing of patents, most industry interviewees gavea low emphasis to this preferring to engage in research projects. Tere were many comments receivedin the interviews that questioned the availability of immediately commercializable patents from uni-versities. From the staistics, it is obvious that companies prefer to be part of the research projects incollaboration with universities.

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RANSFER / EMBEDDING PROCESSD.

Trough what process is the knowledge generated in the project expected to be embedded in the com-pany ?

Number %

Company Sta Embedded In University or Period (note 1) 3 15

University Team Reporting to / Meeting with Company 13 65Weeklya) 1Monthlyb) 5Longer period than Monthly (note 1)c) 7

Joint Team 3 15Student / Academic In Company 1 5

Notes:Each o the three situations represented very unique circumstances: BUL would embed a company1)representative in each university in order to ensure a ull interaction; Pratt & Whitney’s Manager,

Turbine Component Centre acts as the Director o the University Institute and in the case o Baader-Canpolar, employees o the company are part-time students supervised by the universityresearcher.

Five o these are respondents with generalized processes. These respondents acted more like2)granting councils in that they expected reports at the end o projects as a minimum. Althoughsome o the respondents may have had specic projects where interactions were more requent,the process established only required end o project reporting in most cases.

Te knowledge generated by a project only has value for a company if it can embed that knowledge within the company. Tis analysis seeks to determine how companies tend to do that. As can be seen,the preferred means is by meetings between company and university.

Te frequency of meetings was, in large part, mandated by physical proximity between the parties.Given distances and travel times, the ability to interact was inversely proportional to the distance be-tween parties.

Te embedding of company personnel in the university took very different forms.

Although there is only one entry in the student in company, interviewees generally had an interest inthe training of students. In some cases61, the company’s interest was, in large part, motivated to ensurethat there would be future students to hire. Companies were also interested in using students on proj-ects in order to assess their capabilities for possible hiring purposes.

Another consideration of how companies deal and embed the knowledge generated is the absorptivecapacity of the company. Even in some cases of large respondents62, those managing projects were, at

times, challenged in finding capacity within the company to properly deal with the findings or outputof the research. Some referred to their role as ‘brokers’ between university and company personnel inorder to ensure proper embedding.

61 For example, Baader-Canpolar

62 For example, Bell University Labs

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V ALUE CHAIN IMPACE.

Trough what means is the project considered to have created value for the company ?

Number %

Technology into Product 5 25Technology into Process 0 0

Knowledge into Product Development Process 5 25

Knowledge into Business Process Redesign 2 10Knowledge into Service Delivery 4 20

Knowledge into Service Development 1 5Capability Development 3 15

Te option with a null response may, in part, be a function of a possible selection bias in the respon-dents. As noted above, respondents were selected based on suggestions from institutions. Since institu-tions may very well recommend interviewees based on past history which is more likely to come fromtangible science and engineering projects, this may represent the lack of process and service oriented

responses that may, for example, have come from business and social science research.

As can be seen, products and the product development process were the predominant impact on valuechains with less emphasis on service and business processes. Again, this could be a selection bias in thedata. Almost all of the interviewees are involved in the creation of tangible products, none of them were in service businesses although service might be a means by which they add value to their tangibleproducts.

E VALUAIONF.

On what basis has the company evaluated the success of the project?

Number %

Financial (note 1) 8 40Metric Based / Non Financial (note 2) 8 40

O which, matching unds is cited (note 3) 6By Traction and Use 1 5Subjective 3 15

Notes: Two o these (Innovotech and SemBioSys) identied their spin-of rom a university and, accord-1)ingly, owe their entire nancial success to that.

The actual metrics used vary rom ‘back o the envelope’ style calculations to very sophisticated2)project ranking systems.

Baader-Canpolar; Nortel; 3M; Bell; Pratt & Whitney; and Bioriginal all noted the importance o the3)existence o government matching money to evaluating its success.

Clearly, financial measures predominate. Companies were normally aware of the costs of a researchcollaboration and can track the success of the outputs of that research.

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Although matching funds could be considered a financial measure, since the matching money is notreally received by the company but only goes to increase its purchasing clout, it is considered a non-financial metric.

As noted above, the existence of matching money from governments constitutes an important factorthat respondents have used in evaluating a project. Obviously as the existence of matching money isknown going into a project, to suggest its importance as an evaluation tool as well is a little paradoxical.However, anecdotally, the companies interviewed have indicated that matching money certainly helps

reduce the risk of a project thus ensuring an altered evaluation. Many also implied that, without thematching money, the project would likely not have proceeded.

As can also be seen, tangible metrics , financial or otherwise, predominate. Very few projects dependmerely on subjective measures. Again, this is likely due to the focus of the study on the perceivedhighest value projects: in order to justify their choice, an interviewee will likely have used metrics tocompare the results of projects; if no such metrics existed, it would be much more diffi cult to identify any one project.

Although financial information was not shared by interviewees, most had reasonably precise data avail-able to them on new product sales that might be related to the research project. For example, both theDofasco and 3M interviews had this type of information. In some other cases63, the financial metric issatisfied on the basis that the company owes its very existence to the licensing-in of technology froma university.

Q UALIAIVE A NALYSIS OF INERVIEWS

Te variability report above helps the understanding of a number of key aspects of the interviews.However, this section examines the interviews from additional domains. Tis is done by examining anumber of relevant questions:

HOW DO PARICIPANS FIND EACH OHER ? A .

As noted under the first variability report above, of the six ‘university approached the company’, fiveof these are actually large companies that have general processes in place. It is believed that this wasinitially a reactive measure created by these companies to respond to a large level of inquiries fromresearchers seeking funding.

Probably of more interest are the companies that go seeking the research partner. One of these (Biorigi-nal) found a federal government lab and one (Motor Coach) found a community college. A conclusionthat can be drawn is that companies will find the right collaborator provided that they are geographi-cally proximate.

An analysis of the four interviews conducted in Newfoundland & Labrador (Baaader, Cathexis, Gar-rison and Provincial Aerospace) points to a possible area for future study. Despite being located inan isolated geographic area, all four of these interviewees spoke highly about their interactions withMemorial University of Newfoundland (MUN). In at least two of these cases (Baader and Cathexis),the collaboration resulted from the personal interaction of the Dean of the Engineering School who was able to assist the collaborator with, in the case of Cathexis, space or, in the case of Baader, by beingable to structure a research chair.

63 For example, Innovotech and OncoGeneX

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ensured that there would be students trained in a field of interest to them that they could hire in thefuture.

HOW DID NEGOIAIONS PROCEED?C.

Invariably all interviewees reported that the negotiations underlying their identified interactions went well. A conclusion that can be drawn from this might be that an important factor in high value interac-tions is that the negotiations go well. Is the inverse of this proposition that a diffi cult negotiation will

not result in a high-value interaction? Tis would certainly be an important subject for further study:interview companies which have had diffi cult negotiations with universities; did the ensuing collabora-tion generate value for the company?

Assuming that the conclusion is valid that an important factor to deliver value to a company is thatnegotiations go well, the interviews also provide some insight into how negotiations can be made moreeffective.

One respondent indicated that universities should be careful with a “one size fits all” approach. Tere was a general view that flexibility in negotiations is an important trait. Also noted by many respon-dents was the level of experience of the persons negotiating on behalf of the university, with concern

for the ability of universities to attract experienced persons who will be in their positions for continuedperiods of time. Many comments were received that negotiating personnel are perceived as being of fairly junior rank and that they seem to change in their positions too quickly.

Many respondents noted the existence of ‘master agreements’ which although diffi cult to negotiate andput in place, subsequently facilitate proceeding with projects.

Although intellectual property rights underlay most of the interactions, no one noted that they haddiffi culty in negotiating the rights to use that they were seeking. Universities with all types of intellec-tual property policies were included and, therefore, a conclusion is that the actual policy in effect haslittle relevance to the success of an interaction.

Tis conclusion is interesting to compare with the finding in Munn-Venn, 2006 which suggested that“there is a lack of clarity related to intellectual property” with the further suggestion that creating suchclarity ‘may help foster more collaborations’. Nothing in these interviews would suggest that any suchlack of clarity exists. Perhaps the difference between this study and that in Munn-Venn is that thisstudy was based on actual interactions; Munn-Venn on generalized interviews. Te solution to thediscrepancy would be a larger sample and an interview script designed to explore company perceptionson intellectual property.

Another means of resolving the finding in Munn-Venn, 2006 about the lack of clarity might be re-lated more to the experience of university negotiating personnel noted in this study. Perhaps industry perceives a lack of clarity in intellectual property policies because inexperienced negotiating staff havediffi culty in explaining those policies? An obvious use of such a conclusion would be the need to trainnegotiating staff. It is noted that in Canada, although there are courses for the training of technology transfer staff, there are no courses for the training of those who negotiate research collaboration agree-ments.

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Conclusions

Tis chapter presents conclusions arising from the foregoing analysis as well as sugges-tions for further study.

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Chapter Five: Conclusions Page 33df

CHAPER FIVE - CONCLUSIONS AND R ECOMMENDAIONS FOR FURHER SUDIES

Te following are suggested as the most important conclusions of this study:

A regular forum should be established to allow interactions and a comparison of practices to occur•among universities and industry negotiators at the level of those who actually negotiate transactions..

As noted, although the Conference Board of Canada deals with issues related to university-industry linkages, these usually occur at a very high level of management within the differentorganizations. In order to foster better relationships, a forum for creating dialogue betweenindustry and universities and other research institutions should be created.

Research institutions should decide how they will prioritize activities within their overall industry en-•gagement portfolio: will they emphasize commercialization or commercially-sponsored research?

In chapter one, it was pointed out that it is diffi cult for institutions to be good at both com-mercialization activities and commercially-sponsored research. Success in one area implies lesssuccess in the other. Tis dichotomy seems to be little understood by policy makers and is alsonoted as an area of further study.

Te companies interviewed knew how to interact with the university due to already knowing someone•

within the university; few of the cases of actual projects were the result of universities seeking out thecompany.

Since this study emphasized the highest value interactions of a company, as noted previously,this finding likely does not map the total research institution experience with all interactions.However, it is clear – as noted in the 3M interview – that companies are not prepared to makelarge investments in untried researchers.

An obvious implication for research institutions is to create as many opportunities as possiblefor companies to build relationships with individual researchers and to otherwise reach out tobusiness if the institutions wish

Universities should engage in activities that serve to introduce specific research capabilities to industry;•in some centres, such activities should be performed on a local basis

Tis conclusion leads from the previous discussion. Te activities referred to include websitesas well as other efforts that can serve to introduce industry to researchers.

High value outcomes need smooth negotiations which, in turn, require experienced and properly •trained university personnel to negotiate

As noted in Chapter Four, almost all of the interviewees reported smooth negotiations. Tisruns contrary to many anecdotes and some previous findings that suggest that industry-univer-sity interactions are hampered by a lack of clarity in such negotiations. Te solution is to have well-trained personnel with clear guidance.

Matching funding programs are well-perceived and help encourage collaborations•

A recurring theme with many interviewees was how well regarded matching funding programs were. At the same time, no interviewees spoke to the issue of tax credits contrary to previousstudies suggesting the need to increase credit programs.

Another implication of this conclusion is that research institutions as well as funders shouldmake more information available to industry on such programs. Generally, industry knowsabout such programs only because of the initiative of the university. As such, they should be ina better position to market such programs to industry.

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Chapter Five: Conclusions Page 35df

Tis study has provided information on what underlies high value university (and other research insti-tution) and industry interactions. Te study has identified:

Te need for institutions to foster relationships with industry •

Te significance of matching funds•

Te value of institutions having experienced and well-trained personnel to negotiate agreements; and•

Te importance of deciding on priorities as between commercialization and commercially-sponsored•

research activities.

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Appendices

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Appendix B: Summaries of interviews Page App.df

A PPENDIX B - SUMMARIES OF ALL INERVIEWS

OSARA NURIEN R ECOVERY ECHNOLOGIES AND OLD DOMINION

Te CaseOstara, a start-up company located in Vancouver, British Columbia, has engaged a Ph.D. engineering student at Old Do-minion University (Virginia, US) to assist in the testing of water treatment facilities it is establishing.

Case Background

Te company is a start-up company based on proprietary technology to remove phosphorus and other nutrients from wastewater. In addition to the removal aspect, the technology also allows the pelletization of the waste product in a mannerthat makes it a useful fertilizer.

Te connection with the Ph.D. student was serendipitous. Te company had entered into a piloting agreement with a waste water treatment plant in Suffolk, Virginia. Te student and his faculty at Old Dominion University were knownto this customer treatment plant. After finding out about the planned pilot, the customer put Ostara in touch with thestudent and his advisor, who were interested in participating and assisting with the pilot.

Te company engaged the student for this as well as a number of other subsequent pilot projects throughout the UnitedStates. Te intention is to hire the student on a full-time basis. He is in the process of finishing in thesis and is expect toget his PhD by the fall of 2008.

Te student’s work is related to the actual operation of the technology in wastewater facilities.

Te work will help the company identify the optimal operating settings for the equipment.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered?

As noted above, the connection with the Ph.D. student was serendipitous. Te company was proceeding with the testingof its technology in a number of wastewater treatment facilities. One of its customers, in Virginia, knew of the student’sinterest and made an introduction. Te student was interested in an engineering doctorate and was looking to be able to

work with the company’s technology in a production environment. Coincidentally, the company was also looking for testbeds for the scale-up of the technology.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Te application of the technology is applied research. Although this particular relationship was self-contained, it is at astage of the company’s ramp up of operations as it scales up its technology.

What internal justification in the company was needed to work with the university? Being relatively small, the company’s chief technology offi cer was able to get a go ahead on the sponsorship by simplediscussions with the CEO.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? Non-disclosure agreements were put into place with respect to the actual technology. However, given that the project relatesto the completion of a Ph.D., it is acknowledged that publications would be a key part of the project.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Negotiations to fund the Ph.D. went very smoothly and easily. Te company provided the funds to the university for thestudent. Intellectual property concerns were not raised. Over time, the student’s value to the company became apparentand it is likely that the company will consider a full time position for the student when appropriate.

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How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in co., work done in university with results transferred via report); by what mechanism did the knowledge transferred become embedded in the company? What was the nature of the embedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value gener-ated by the project? Te company has found great value in the student’s work in the optimization of the settings of its technology in a produc-tion environment. Te technology personnel of the company have worked closely with the student. In addition, as thestudent’s work has become more understood in the company, they have had him visit other plants to assist in the operations

of those other pilot projects. As noted above, if the company does hire the student in due course, the company will, of course, acquire the student’s skillsand knowledge as part of the company.

Te settings pioneered by the student are also being disseminated to other test centres.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te company is at an important stage of its development scaling up the technology to commercial quantities. Te work provided for a relatively minor investment has proven to be very valuable to the company as it affects the potential accep-tance of the product by a key market segment being the operators of wastewater plants.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,

more effi cient process) and how was it evaluated? Evaluation is principally anecdotal. However, the work in this case establishes the variability of the technology.

Has this project affected the company’s potential to collaborate with universities? Te company already had a good impression of universities given that its basic technology is licensed from one. However,this project establishes the principle that specific research projects with specific objectives can provide significant value tothe company. Tere are likely to be more such projects in the future.

ConclusionTis case shows how a small investment in a student can have a very large value return. In addition, it shows how it isimportant for a company to provide a certain level of detail about its technology and operations so that possible researchcollaborators can find it. In this case, given its start-up status, it could have been very likely that the company might nothave made this level of detail available initially. In this case, having this level of known detail made it possible for a customerto recognize the opportunity for collaboration and introduce the company to known researchers.

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DISIL INERACIVE

Te CaseDistil Interactive, the company, works in the area of digital interactive game-based learning using role-playing games. Tecompany designs training programs that are delivered through the games.

Because of competitive reasons, the interviewee, Kenton White, was reluctant to single any specific university interactionthat the company has had for special consideration. Instead, this case report describes the general considerations that thecompany uses.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? Te company sees universities as a source of highly-qualified personnel that is relatively inexpensive. Projects should matcha time scale relevant to programs of the university; for example, a Ph.D. student is perfect for a project that has a 2 to 5year horizon. (Beyond 5 years, the company has diffi culty in determining how it would fit in with the company’s objectivesin any event.)

Te best types of projects that the company likes engaging universities for are those where the question being researchedmay have a large (say a dozen) possible answers and it is seeking direction on which answers should be pursued.

Projects are usually initiated by the company. Te company keeps an eye on relevant literature but conferences are notgenerally a part of its process of identifying potential collaborators.

One of the most important types of projects which the company likes to engage universities for is where there is an expec-

tation that the project will not work; in other words, a project leading to negative results. In this case, the company findsgreat value from a project that fails quickly. A challenge for the universities is understanding when a project is unlikely toproceed further.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Projects are generally in the basic research field. Tey are self-contained.

What internal justification in the company was needed to work with the university? Before considering proceeding with a project, the company conducts an informal SWO analysis on why the projectshould be conducted externally to the company. If the project will be likely to proceed, the company will also consider how the results will get captured and what will be the likely impact on the industry if there is no recapture but the informationgets disseminated to competitors.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? Tere have been some patents arising from previous university projects. In large part, the obtaining of patents is moredriven by the needs of the company to show progress to investors than significant business needs. Generally, the company sees the need for patents out of university relationships misaligned with the true academic endpoint of publication.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? On the part of the university, the company sees the researchers and the technology transfer offi ces that conduct the negotia-tions as potentially having different objectives. It is important that expectations of all sides in the negotiation be understoodand accommodated in the end result.

Te company also recognizes at the time of a grant application is when the company has the greatest leverage. As the projectprogresses, there is far less leverage66. Usually there are not a lot of negotiations on financial terms. However, the company does find itself negotiating frequently with a number of the granting agencies that provide matching funds for research. Tecompany is quite adept in contacting the agencies’ program offi cers.

66 This is especially the case with programs that the company participates in that are matching programs.

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How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in co., work done in university with results transferred via report); by what mechanism did the knowledge transferred become embedded in the company? What was the nature of the embedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value gener-ated by the project? In terms of making the project work the company realizes that this is the most diffi cult aspect of the project. Te company also acknowledges that they have yet to be 100% successful in integrating the research with the company.

In terms of integration, the company recognizes that to be successful, the company needs to have a liaison person who is a

peer with the academic groups. Certainly the CO of the company is not that person.In the case of local universities, the company likes to have frequent (weekly) meetings with the research team.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? One group at a local university is used by the company as its virtual ‘think tank’ providing the types of focus questions thatthe company needs to look at in its work. Tis provides value at very early stages of the value chain.

Te use of university research concords with the company’s desire to use an ‘open innovation’ model. In this model, ideasare freely exchanged and improved upon with little regard to commercial application or benefit sharing from the use of theinnovation.

Generally, it is diffi cult for the company to identify at which stage of its value chain its university interactions have most

had an impact.What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated?

As noted above, probably the greatest value from its university projects has been generating negative results: what doesn’t work. In these cases, value is very diffi cult to estimate.

Has this project affected the company’s potential to collaborate with universities? Te company is likely to continue its collaboration with universities. As it is relatively sophisticated in the use and manage-ment of such projects, the company will likely obtain great value from them even though that value may be in the form of negative results.

ConclusionTe company in this case, albeit a start-up, is relatively sophisticated in the management of its university relationships.

In large part, this probably is related to the experience of the interviewee, the CO for the company. Te company usesuniversity research in a very targeted manner for specific types of projects. In the information technology field where thecompany works and where patent protection is less likely, this work is directed to ‘think tank’ type operations to see if ideasare possible or not. If not, the company receives value from the negative results by not having to continue on that path; inthe case of positive results from identifying a specific line of attack, the company will then take the research over for com-mercial development.

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B AADER -C ANPOLAR AND MEMORIAL UNIVERSIY OF NEWFOUNDLAND (MUN)

Te CaseTe company is co-funding (with two government agencies) the establishment of an industrial research chair at Memorial(MUN) in Machine Vision.

Case Background Te company has had a number of different collaborations with MUN in the past. Te opportunity to co-fund an indus-trial research chair was of interest to the company for two major reasons: a) the ability to lever its money with governmentmoney to achieve more than it could fund on its own; and b) the goal of the chair includes the training of students in the

machine vision field which is of great interest to the company for possible future hiring.How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? Te company has had a personal relationship with the dean of engineering. Te company discussed its concerns that toomuch of the engineering faculty research programs were focused on oil and gas research67 and little was devoted to thetraditional industry of Newfoundland and Labrador being fisheries. By an appropriate designed industrial chair, the com-pany was able to ensure that there would be a research focus in its preferred area and students being trained that would beavailable to it for future hiring.

One of the alternatives that was considered was that of a secondment which the company had had extensive experience with. However, the research chair allowed the company to access significant matching funds as well.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Te purpose of the industrial research chair has included a broad range of subjects. However, for the purposes of this projectthey are classified as basic research because of the likelihood of that type of research.

What internal justification in the company was needed to work with the university? Te company is owned by private interests in Germany. Te actual decision to proceed with the project had to be made by the ultimate owner in Germany. Significant background was provided but ultimately the need for trained personnel andthe large matching increment were able to make the deal.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? Tere have been one or two patent filings with previous work with MUN. However, there have yet to be any patent filingsunder the chair although these are possible.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Te negotiations went smoothly with the university. A standard form of agreement was used which gives certain rightsof refusal to any resulting intellectual property to the company. Te university owns any developed with the intellectualproperty. Te company recognized that since they were not paying the full amount of the research, they wouldn’t be ableto require ownership of the IP. If any IP under the agreement is to be licensed, there are pro forma terms for such a licence

with caps on royalties well within what the company believes to be standards for the technologies involved.

Te significant interest during the negotiations of the company was the matching funds.

67 Signicant reserves o oil and gas have been identied in the last 2 decades of the coast o Newound-land.

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How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in co., work done in university with results transferred via report); by what mechanism did the knowledge transferred become embedded in the company? What was the nature of the embedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value gener-ated by the project? Te project is proceeding well. Tere are actually one or two employees of the company who are taking advanced engi-neering degrees on a part-time basis supervised by the chair holder. Te chair holder has been quite diligent in circulatingdrafts of academic papers, and applications for additional grants to the company for review. Te company is pleased with

the work that is being carried on.What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te ability to have personnel trained in the area is of the most value to the company. Te company believes that if it wasn’tfor this chair, the engineering school would not have anyone who was doing imaging work especially in the food processingarea. By sponsoring the chair, the company has assured that there will be students exposed to this area as well as a researcher

who is prepare to work in the area.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated? Te outcome is valued on an anecdotal basis. Te availability of highly-qualified personnel to hire is important for thecompany.

Has this project affected the company’s potential to collaborate with universities? Te company will likely engage MUN for other projects in the future. No other universities have contacted the company for possible projects so there is nothing projected at present.

ConclusionGiven the geographic isolation of where the company does business, the availability of a research chair in a field relevant toits business is important to ensure the availability of people to hire and a researcher in the area. In addition, the case showsthe importance of matching funds to encourage industrial participation in research.

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G ARRISON GUIARS AND A NDY FISHER (MEMORIAL UNIVERSIY )

Te CaseChris Griffi ths had an idea for an inexpensive guitar made from non-traditional68 materials in a non-traditional69 man-ner. In order to assist with the actual engineering that was required to put his idea into production, Griffi ths engaged theManufacturing echnology Centre at Memorial University of Newfoundland (MUN). Te actual idea was the creation of aone-piece bracing system for the body of the guitar. Te technical challenge was how to achieve the same acoustic resonancethat wood would provide in an injection moulded and machined part.

Griffi ths was the interviewee and his company is known as Garrison Guitars70.

Griffi th’s success has also been acknowledged with a number of different prizes including the prestigious Manning Awardof Distinction71.

Case Background Griffi ths started his first company at the age of 19 in 1993. He did this to ensure continued employment72. His businesscustom manufactured guitars. In 1995, when his company experienced supply delays, Griffi ths identified an opportunity to change the way in which guitars could be mass produced. Because he knew he did not have the engineering or produc-tion skills, he turned to someone whom he knew from his retail experience. Tat person was Andy Fisher who worked atthe Manufacturing echnology Centre (MC) at MUN.

Griffi ths approached Fisher and they discussed the problem over lunch. Tey discussed possible CNC or other automatedproduction methods. Griffi ths obtained funding from the Industrial Research Assistance Program (IRAP) of the nationalResearch Council (NRC) of Canada in order to properly research how others did it. On an airplane returning from seeingsuch a manufacturer in California, Griffi ths proposed to Fisher why no one had ever thought of building an acoustic guitar

from a one piece ‘cage’ to brace the interior of the guitar. A sketch on an airplane napkin led to a project conducted at MC which did all the 3D designs for such a part and thesimulations and calculations to ensure that the part would have the same acoustic properties as wood. Te actual perfectionof the design took over 6 years during which time Griffi ths was able to sell his first manufacturing company to concentrateon the development of the Active Bracing System™ guitar. During this time, Griffi ths frequently used the MC for rapidprototyping and other job shop functions.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? Griffi ths knew he did not have the technical skills. Griffi ths was assisted in his earliest days by the Genesis centre which wasan incubator centre located at MUN. Trough Genesis, Griffi ths became aware of the MC. He was also aware of Fisher

who had been a retail customer of his.

In addition to MC, Griffi ths also used a facility known as IRDI located in Midland, Ontario for the plastics work. Fisher was not a plastics specialist and, accordingly, IRDI was used for the making of moulds and prototyping production runs.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Tis was very much applied research. Te project had a specific product objective from the outset.

What internal justification in the company was needed to work with the university? Tis was a one-person company until the receipt of venture capital funding in August, 1999. Accordingly, little justification

was required at any point.

68 In other words, not wood

69 Rather than hand-crated individual parts tted together, the idea was or a one-piece machine injectedcore piece.

70 Gri ths’ rst company – reerred to later – was known as Gri ths Guitar Works. The garrison name was

chosen, in part, so as not to cause conusion with the rst company which has been sold to others.71 See: www.manningawards.ca/awards/winners/cgri ths-media.shtml

72 He had worked in retail as a sales person in a music store and was concerned about economic down-turns.

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What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)?

Although Griffi ths is named as the inventor on various aspects of the bracing system, these were outside of the MC rela-tionship. MC acted as the design and job shop at various stages during the development of the product.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Tere were never any specific negotiations and little contractual paperwork. MC would provide a quotation for various

work to Griffi ths who would in turn authorize that work which then proceeded as quoted. At all times there was no ques-tion that the ideas and the value belonged to Griffi ths. MC and Fisher at all times held this view and, accordingly, there

were no diffi culties in the relationship.

How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value generated by the project?

A key aspect of the relationship between Griffi ths and Fisher was that Fisher acted as Griffi ths’ first plant manager for theinitial start-up period after Griffi ths had obtained venture capital funding for the production phase of the company. Fisher

subsequently returned to the university in 2004. As noted above, MC was used (and continues to be used) as a ‘job shop’ for various manufacturing needs of the company.However, Griffi ths makes it clear that without MC, the company would not exist. It was able to help the company withits engineering needs. Again, Griffi ths describes the relationship with MC as close to having your engineering departmentas possible.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te company would not exist without MC and the engineering services that it has provided. Griffi ths also points out thatMUN’s Genesis incubator centre was also a key component of the company’s existence.


more effi cient process) and how was it evaluated? Again, Griffi ths acknowledges that the company would not exist without the support he received from MC and Gen-esis.

Has this project affected the company’s potential to collaborate with universities? Griffi ths still uses MC as required.

ConclusionIn this case, it is obvious that the engineering facilities of MUN as well as the incubator centre were the sine qua non forthis company’s existence. In part, this may be as a result of MUN’s geographic placement and relative isolation73. In thesecircumstances, the university plays a very large economic development role.

73 Located in the Province o Newoundland and Labrador on the island o Newoundland, MUN is the prov-ince’s only university. The province has a population o approximately 500,000 people. The major city, St,

John’s has a population o about 100,000 and is located a 1½ hour ight rom the closest large Canadiancity, Haliax.

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Appendix B: Summaries of interviews Page App.1df

C AHEXIS AND MEMORIAL UNIVERSIY OF NEWFOUNDLAND (MUN)

The CaseMUN’s faculty of engineering provided space to four students to facilitate them in getting their company, Cathexis, started.Te students asked for the space just before their graduation from the faculty and this arrangement continued for a few years until the company was well-established and moved to commercial premises.

ase Background Cathexis Innovations was founded by 4 engineering students in 2001. Te students had worked extensively in projects

within MUN’s engineering faculty building robots and generally using RFID technology. As part of that work, the students

had the idea which has lead to the foundation of their company.Te company was incorporated before the students’ actual graduation. Tey had started the company as students using thenormal space and facilities allocated to students to test their ideas.

As the students realized that their access to facilities would end on graduation, they approached the dean of the faculty tosee if there was space available for them in the building. Te dean was agreeable and had some space – that had been previ-ously used for storage – allocated to the students with a minimum of formality.

Te use of the premises also gave the students de facto use of other facilities within the faculty such as unused and underusedequipment74 and access to expertise.


Te students realized that if they were to have access to equipment and expertise within the faculty of engineering, they would need to be physically located within the faculty. Te students were very familiar with how things worked within thefaculty having been undergraduate students for a number of years. No commercial alternatives were considered due to theexpenses involved.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Te company’s work is a unique application of standard RFID technology. Te innovation lies in the RFID reader. Nor-mally, RFID tags are read using fixed readers (such as the arches found in airport security stations.) Cathexis uses portablepen-like readers. Tis is classified as Applied Research.

What internal justification in the company was needed to work with the university? Te financial consideration alone (the university was not charging for the space) was suffi cient justification.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? Tere has been no formal transfer of knowledge from the university to the company.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved?

As noted above, the dean of the faculty was the principal point of contact from the university’s side. Te students repre-sented the company. Negotiations past the initial decision to proceed on the part of the dean were almost non-existent.

Te university did not require any formal documentation other than a letter and no financial considerations.

Tere was some opposition within people in the faculty to this arrangement. Although at the time the space was providedto the company there was not a shortage of space, there now is. As this space was originally storage space, it is arguable thatthe students work in cleaning it up actually was valuable to the faculty.

74 Which included mundane items such as multimeters and oscilloscopes.

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How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in co., work done in university with results transferred via report); by what mechanism did the knowledge transferred become embedded in the company? What was the nature of the embedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value gener-ated by the project? Te actual occupancy of the premises went well. Te company was able to get started by accessing equipment and facilities.In addition to this actual use, the students also upgraded their knowledge of business and entrepreneurship using variousfacilities that were available to them at MUN.

What was the nature of the impact upon the company value chain (i.e. direct contribution of technology to product development, manufacturing or logistics process, upskilling/increasing knowledge of staff, service development)? How easy is it to identify?

Te company would likely not exist today if the faculty had not provided this space to it.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated?

As the entire company probably owes its existence to this transaction, it is diffi cult to place a value for it.

Has this project affected the company’s potential to collaborate with universities? Te company has a continuing close relationship with MUN. Although the opportunity has yet to arise where the company requires further assistance from a university, this experience has certainly given it a positive attitude to such interactions.

ConclusionTis case is an interesting example of how universities can work with companies being started by students. Te provisionof space in this case was a critical factor in the initial viability of the company. It is important to realize that the actualspace provided was probably secondary to the company having access to equipment and facilities at its formative stage.Te provision of space was not without its detractors within the faculty. However, the longer-term success of the company certain validates the initial decision.

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NOREL

Te CaseNortel is an international company with roots in Canada. It has an extensive external research program with many uni-versities around the world. Te interviewee, the director of external programs, was more comfortable speaking about thecompany’s program in general terms so as not to single out any specific university that it deals with.


Te company finds its university projects both by outreach by the company to specific researchers and by researchers con-tacting it. Te interviewee tries to ensure that her function is seen as a portal for both people within the company lookingfor research in specific areas and for researchers looking to interest the company in a research idea.

Before proceeding with any specific project, various alternatives will be considered.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Projects will be a combination of gray zone and horizon scanning types of projects.

What internal justification in the company was needed to work with the university? Te company has a highly developed scoring system for projects. Te 10 points that are considered are the following:

Clarity of Research Result: how clear are the objectives of what is being sought?1)

Horizon: when will the value in this research be achieved? Now or at some time in the2)future? If in the future, what else will have to happen?

Research quality: How well know if the research team to do the work? Are they con-3)

sidered experts in their field? What are their citation rankings like?

Technical impact? How likely is this research to change the ‘state of the art’ in a field?4)

IP Rights: hat IP rights are available? Is it exclusive or will it be public domain?5)

Competitive leverage: what competition is there in a field?6)

Community of interest: how many groups within the company are interested in this re-7)

search?

Customers: how likely will this research be of interest to some of their large customers8)

globally? (The company works with the largest companies in the world.)

Mind share and presence: to what extent will the company’s reputation be enhanced by9)

engaging in this research (the example was given that Nortel’s being the largest sponsor-

ship of MIT’s media lab for at least 25 years has certainly had a significant ‘halo’ effect)

Resource leverage: to what extent can the company lever its resources with matching10)

money and other opportunities?Te external research program works within annual budgets and there is a steering team that the interviewee works withfor the budget allocation.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? Tere have been patents resulting from funded projects. Te company likes to work with universities which are flexible onthe ownership terms of the patents which arise.

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How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Te interviewee called the company’s legal team ‘her best friends’. o the extent possible, the company tries to use standardagreements and, where possible, simple one page grant agreements. Most large projects will start with some small explor-atory projects to determine the performance of the researchers and the company’s interest in the area.

Te interviewee will conduct negotiations needed directly. She has noticed that in recent years most universities that have

had histories of dealing with the company are prepared to make accommodations to the fact that the company has hadincreasingly limited resources to apply to research in universities.

How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in co., work done in university with results transferred via report); by what mechanism did the knowledge transferred become embedded in the company? What was the nature of the embedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value gener-ated by the project? Projects generally have a technical contact in the company who is expected to meet periodically with the university. Tereis also a broad review of all projects sponsored by the company. As part of this process, the company reviews possible pat-ents, papers and, most importantly, identification of students that the company might want to hire. On this last issue, theinterviewee made it clear that they would like to hire more students using this route.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te company sees most projects oriented to its business directions. As examples, the 4th generation of wireless found itsroots in university research and the concept of wireless meshes75 that resulted from joint efforts by MI and Nortel.


Actual increases on product offerings are not measured. Tere is anecdotal evidence that the external research program hashelped develop product offerings which have resulted in new customers.

Has this project affected the company’s potential to collaborate with universities? Te company has always been very positive on its university research projects. Te future is likely to see expanded fund-

ing.ConclusionTis case illustrates how a very-large very-public company deals with its university research program. Tere is a highly-defined process for the selection of projects together with an infrastructure of committees that allows projects to be selected,reviewed and managed.

75 Wireless mesh allows wireless communications over gaps in coverage rom base stations by bridgingother wireless devices to get to the nearest base stations.

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3M AND PROFESSOR JEFF D AHN (D ALHOUSIE)

Te Case An Industrial Research Chair76 in Materials is held by Professor Jeff Dahn at Dalhousie University. Originally establishedin 1996 as a chair in Materials for Advanced Batteries for an initial 5 year period, and renewed for a second five year term,the research collaboration with Prof. Dahn has been broadened to include other materials. Tere has also been a recently concluded – and almost unprecedented – third five year renewal of the chair.

As part of the industrial research chair, Dalhousie University has been able to establish a leading materials discovery labora-tory. Professor Dahn has also been appointed as a ier I holder of a Canada Research Chair.

Te interviewee was Dr. Mike Irwin who is in charge of the management of all research collaborations in Canada for 3M.

Case Background 3M identified that Professor Dahn had special expertise in a number of areas that were relevant to businesses that 3M wasinterested in. Initially, 3M funded a chair in battery technology in 1996 which was later expanded to included fuel cell andcarbon materials. Te industrial research chair has led to significant knowledge transferred into practical use at 3M.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? 3M has an extensive program of sponsoring researchers throughout North America. Although the memory of how specificcollaborations with Professor Dahn were instituted is not available, the normal 3M process is to identify subject-matterexperts relevant to its business lines77 through searches of scientific literature and targeted conferences.

Once such an expert is identified, she or he is invited to work on a few small contracts for 3M. In the case of ProfessorDahn, such contracts were conducted when he was located at Simon Fraser University in Vancouver. His performance onthese contracts established his interest in working on industrially-relevant research projects and the quality of his work confirmed this.

3M created an industrial research chair at Dalhousie University in Advanced Battery echnology for Professor Dahn. 3Mhad successfully used this program in the past which it acknowledges provides significant leverage for its own financial andin-kind investments.

In part, the chair was created at Dalhousie University (on the other side of Canada from Simon Fraser University) as 3M was aware that Professor Dahn had a personal interest in moving to that region.

In short, the origins of this case are classified as “Company sought out a specific researcher.”

What were the origins of the knowledge transferred and how would it/they be classified? Was this

part of a sequence of activities with the university or a single self-contained project? Te work performed by Professor Dahn can be characterized as ‘Gray Zone’ or ‘Iterative or Interactive’ research. Whenasked, the company representative noted that although much of the research was initially ‘basic’ there has been significantapplication of the research results to commercial applications within the company.

As part of the knowledge transfer activities – more fully described below -- there is a high level of interactivity betweenProfessor Dahn and specific research and product development groups within 3M. Due to this, it is also possible to char-acterize this project as ‘Iterative or Interactive’.

Because the case covers more than 10 years of work in a number of different materials research areas, it is obviously a se-quence of activities. It has also been classified as a project where the company has specified the technical issues that wereto be covered.

On this latter issue, an interesting story arose from the management of the research by 3M. Initially, 3M only had ProfessorDahn interact with a specific research group in the advanced batteries area. After the collaboration had operated for 4 years3M research management introduced Professor Dahn to other research areas within 3M. Doing so identified a number of new areas where Professor Dahn and his research group were able to provide significant insights and work. A conclusionof this within 3M has been to ensure that all university relationships are now publicized more widely within 3M’s internalresearch community.

76 The Industrial Research Chair is established under a special program o the Natural Sciences and Engin-eering Research Council (NSERC) o Canada. The program provides unding o between $80K to $500K per

year. Companies are expected to match the NSERC contribution through cash and in-kind contributions.77 3M has approximately 40 diferent business lines

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What internal justification in the company was needed to work with the university? An important observation of this interview is 3M’s process for engaging university researchers. Significant research col-laborations are only created with those university researchers who have proved their interest and willingness to conductindustrially-supported research through an initial series of small contracts from 3M. Only if such contracts prove to 3M’sresearch management that more extensive research collaborations are likely to yield high quality projects will negotiationstake place for larger collaborations. In this case, the initial contracts proved to be of a high quality and the chair negotia-tions were entered into.

Overall, 3M has a large budget for research collaborations and all projects are managed within the annual budget. Becausecertain projects such as this case require a minimum five year commitment, budgeting issues need to be considered care-

fully. Te renewals of the chair agreement were easily accomplished within 3M. Professor Dahn is personally known tomany in the executive research ranks of 3M because of the quality and quantity of his contributions to 3M’s business.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? Tere have been about 15 to 20 patents applied for or issued on Professor Dahn’s work for 3M. Because of some vagariesrelating to intellectual property in the three different chair agreements (touched on in the next section) over the term of theindustrial research chair, these are either licensed directly from Professor Dahn or owned by 3M outright. 3M’s extensiveinternal patent department generally handles the actual preparation and prosecution of patent applications.

Far more important than the patents is the personal interactions between Professor Dahn and 3M personnel. He is engagedin many internal seminars and presentations for 3M personnel travelling to St. Paul, Minnesota on a quarterly basis. Dr.Irwin likely sees professor Dahn about once a year and will speak to him on the telephone on a monthly basis.

As noted above, because of Dr. Dahn, 3M now seeks to more widely publicize the skills and capabilities of their supported

researchers more broadly within the company.How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Negotiations for the industrial research chair were potentially more complicated by being a three party agreement: the uni-versity, the company and NSERC. Te initial contract however went well. 3M had concluded a number of such agreements

with Canadian universities and in 1996 there were no issues that were contentious.

On the renewal in 2001 and the subsequent 2006 renewal, intellectual property issues started becoming more problematic. Although the first chair agreement had 3M owning any intellectual property was developed, changes in the University’sprocesses78 as well as the establishment of an Intellectual property Policy by NSERC79 caused some challenges on the renew-

als of the agreements. Ultimately these were resolved by negotiating a compromise position acceptable to the three partiesin the first and second renewals80.

3M is very positive on the value provided by the industrial research chair program. Tis allows 3M to engage in research atCanadian universities in a very cost effective manner. NSERC’s contribution of half the project costs allows 3M to conductresearch that it believes may be important for it in the long run in a cost-effective manner.

How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value generated by the project?

As suggested above, 3M believes that Jeffrey Dahn represents one of the highest value research collaborations that they have

every undertaken in Canada. In addition to patents produced from his research and the quarterly seminars and presenta-tions that he makes for 3M staff scientists, 3M has also hired students of Professor Dahn’s at a number of different levels.

78 There was a realignment o unctions which included the re-establishment o a technology transer o-ce.

79 Available at: http://www.nserc.gc.ca/proessors_e.asp?nav=pronav&lbi=p11. The policy provides that

although NSERC will not seek any intellectual property rights in any developed projects, it expects theuniversity or the inventor to own the same and the industrial partner to only have rights to acquire a

licence.80 Both o which have slightly diferent IP terms.

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As was also noted above, as a result of the expansion of the research areas in Professor Dahn’s work, 3M has adjusted itspractices to ensure that there is wider circulation of the information relating to its research collaborations within 3M. AS alarge company this can, of course, be diffi cult.

Certainly the large number of personal interactions between Professor Dahn and 3M research scientists is, in large part,responsible for the very positive regard for this collaboration.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Value to 3M has occurred right across the value chain. Professor Dahn’s impact has included early research findings thathave increased the knowledge of 3M scientists on the basic science underlying their work, the creation of new and im-proved products that are now in commercial production and the creation and implementation of improvements to produc-tion processes.


Although there may not, in many of the situations described in the previous section, be an easily measured value to 3M,the perception has been that the collaboration has provided 3M with great value. Tis value is likely in the tens of millionsof dollars.

Has this project affected the company’s potential to collaborate with universities?

3M will certainly conduct more research projects with universities. In this case, Jeffrey Dahn was an important factor in theproject’s success. As an example of how highly 3M regards his dedication, the example was given of the need to find a junior

chair holder. He took it as his personal obligation to find someone who was both worthy of the position and interested inthe work of 3M.

ConclusionTis case identifies a research collaboration that provides great value to the company.

In large part, the case’s success is a result of the personality and motivation of the researcher81 as well as his integration in thecompany’s research groups through his quarterly presentations. An important observation made by 3M was that in order tofind more of these successes, university administrations should “pick winners and then back them financially”.

Another important aspect of the case is the importance of the government matching money. By taking half of the financialrisk out of a research project directly, 3M regards NSERC’s industrial research chair program as an important factor infunding research projects at Canadian universities.

81 In the words o Dr. Irwin: “Jef gets it!”

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BELL UNIVERSIY L ABS

Te CaseBell University Laboratories (BUL) represents a unique manner in which a large Canadian company has made a commit-ment to fostering university research collaborations. Assembling approximately 100 researchers located at some 30 univer-sities82, BUL looks to foster a closer relationship with university researchers in the communications and other research areasrelevant to Bell Canada’s – its parent company – business by actually embedding personnel within the universities to bothbroker opportunities and provide liaison.

Rather than identifying any specific collaboration, this case study reports on the overall program. Tis approach was pre-

ferred by the interviewee (Alan Bernardi). He felt that BUL and its parent company receive value from the entire programand was uncomfortable in highlighting any given case.

Each of the university collaborations follows a different model designed to meet the circumstances. In some of the largestcollaborations, there may be a full time83 or part-time84 academic director for ongoing projects located on the university campus.

Te actual ‘collaboration’ is a master agreement between BUL and the university concerned. Projects can then be proposedby researchers at that university and funded by BUL.

Case Background Bell Canada is Canada’s largest supplier of telecommunications. Founded in 1998, BUL was a commitment by Bell Canadato university research and development especially in the area of communications. Objectives of BUL include both provid-ing research opportunities in fields of interest to the parent company as well as a more generalized corporate social responsi-bility of ensuring that research capacity at Canadian universities expands. Objectives also include the idea of levering BUL’s

financial contribution with other partners.How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, con-tact fromuniversity, networking events, conference)? What alternatives were considered?

As a large company that had funded many different collaborations in Canada, the founding of BUL helped the parent com-pany channel projects into a more easily managed system. In addition, the creation of BUL made it easier for researchers

who had an idea that they thought might be worthy of funding to present it in an easy environment for consideration.

BUL now sees itself to some extent as a ‘broker’ for technology needs of its parent company on one hand and the technolo-gies on offer from the university researchers on the other. As a broker, it has financial assets as well as networks of otherpotential partners that it can bring into a project.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Most research undertaken tends to be very early stage basic research. Although some projects eventually develop into ap-plied research, BUL sees continued value in basic research in communications.

What internal justification in the company was needed to work with the university? BUL is allocated an annual budget from the parent company. BUL reports to the technology group of the parent (whichhas not changed since inception.) Justification for any specific project is considered within the BUL administration – whichis relatively flat and lean.

Evaluation of proposed and completed projects is currently based on an informal and anecdotal system although BUL isdeveloping a scored system for the future.

Research proposals are made on a very simple basis and are selected in accordance with their ‘fit’ to BUL’s overall researchobjectives. BUL also considers research projects on the basis of how BUL’s contribution can lever other industrial and gov-ernmental contributions. Some projects – especially in the social sciences areas relating to communications use – may be

more in the realm of ‘corporate social responsibility’. However, BUL feels strongly that given how poorly social sciences aregenerally funded, such projects are important for the parent company’s business as well.

82 Some collaborations also involve other industrial and government partners. Full details o all partnerscan be ound on BUL’s website: www.bce.ca/en/community/innovation/universityresearch/partnerships/universities

83 An example o a ull-time academic director is ound at University o Toronto which, in turn, runs its ownwebsite: www.bul.utoronto.ca/site3.aspx

84 An example o a part-time director is the University o Waterloo which also has its own website: icr.uwat-erloo.ca/BellUniversityLabs.html

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When patents are required, Bell Canada’s own patent group will prosecute these. A generalized comment on the need forsuch knowledge transfers was that universities tend not to be very observant of the publication delays provided for in theBUL master contract. Usually, the need for patents is identified by the BUL academic director identifying the need fromtheir personal knowledge of the research rather than any identification of patentable material in a proposed publication.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each

side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved?

A significant advantage of the BUL structure is that all negotiating issues are covered in a master agreement with each in-stitution; once a master agreement is signed, all matters are governed by that. Generally, universities were happy to agree tothe terms proposed although in some cases there were challenges due to different perceptions of certain issues.

Tree different examples were given of problems with issues. Te first had to do with the use of students where the students would be working in Bell facilities. In one case with a lack of under standing of commercial realities, a scholarship was heldup for a student until the matter was considered by the University’s Board of Governors.

Tere is a generalized lack of understanding on the part of the universities as to what will need to be done with an early stage finding in the communications area to bring that development to market in a marketable product. BUL will fre-quently have to realign expectations on values in this type of situation.

A final concern has to do with ‘customer service’ aspects of the relationship. Despite funding millions of dollars into variousuniversities, BUL is surprised of how much time can be spent on little issues such as obtaining parking for its employees oncampuses and other ‘client service’ issues that are taken for granted in the commercial sector.

How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realize the potential value generated by the project? BUL spends a lot of time as part of its administration in monitoring progress of projects both generally and specifically. Inthe case of campuses with academic directors, the expectation is that they will manage this task.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-

nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te actual impact that BUL has had on its parent company’s value chain is diffi cult to ascertain. As noted elsewhere, therehave not been a lot of research results that can be traced directly into products. However, BUL also sees its value as ensuringthat the parent company has access to the most cutting edge aspects of Canadian university research. In addition, the BULoperation fulfills some aspects of the parent company’s corporate social responsibility mandate.


As noted in the previous section, this is not possible to estimate.

Has this project affected the company’s potential to collaborate with universities? BUL’s experience with universities has generally been very positive. Although it is diffi cult to point to new product offeringsthat were a direct result of research collaborations, the project is working. Tere is a well-publicized impending change of

control with the parent company. As a result, there is some concern as to how new senior management will want to deal with university R&D and corporate social responsibility in the future.

ConclusionBUL provides an interesting example of how a large Canadian company has organized its university research R&D col-laborations into a semi-autonomous organization that looks to effect a more significant interaction with the universities.Te most significant challenge for this organizational style is ensuring that actual research findings can be communicated

with the parent company and used as appropriate.

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As noted above, there were concerns that the agreement lacked guidance in key areas and did not anticipate certain situ-ations. In terms of embedding, the company has had the university’s principal research scientist now make the transitionto the company. In addition, the company has hired up appropriate research staff and conducts its key development inhouse.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te company would not exist without the technology licence. Te technology is critical to the foundation of the com-pany.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated? Te company is successful in that it has achieved public offerings and has started to achieve revenues.

Has this project affected the company’s potential to collaborate with universities? As the company has a need to produce market ready products, it is currently less interested in university collaborations.Tere is a deep concern that whereas the research is easy, the actual development of products is diffi cult. In part, this stemsfrom the ability of universities to execute on the research collaborations.

Conclusion An important conclusion from this case is the importance of ensuring that licensing arrangements provide a framework within which unexpected situations can be incorporated into the licence. Such transactions need to be structured to ensurethat both university and company feel that they are fully benefiting from the relationship. Tis might be facilitated by en-

suring that the company is given an independent voice in the process from the outset86

. Tis case also shows the importanceof the provision of space by a university as a way of incubating its start-up companies.

86 This could, or example, be achieved by ensuring a CEO or even a virtual CEO o the company is availableat the time the licence terms are negotiated.

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PRA AND W HINEY AND HE CONCORDIA INSIUE OF A EROSPACE DESIGN AND INNOVA -ION (CIADI)

Te CasePratt and Whitney is one of the companies that has supported the foundation of CIADI. CIADI is the first initiative inCanada to bring together major Canadian and international aerospace companies under one roof in order to enhance theeducation of undergraduate students. CIADI provides students with real design and research projects.

Te interviewee, Hany Moustapha, is the Manager of Pratt & Whitney Canada’s technology programs and also acts asCIADI’s Director and an Adjunct Professor in the program.

Case Background Te company, as one of the largest R&D funders in Canada87 has a large number of university collaborations88. When askedabout identifying a specific university case, the interviewee was reluctant to single out any particular case. Te responseprovided was that the company received the most value from a project where the university provides the least administrativeheadache on all issues relevant to the company.

Te CIADI project was chosen after the actual interview as an obvious choice where the company receives significant valuefor the reasons outlined below.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? Te company had identified a gap between what engineers were being trained on and what the company wanted their

new recruits to be trained on. CIADI was one of three undergraduate aerospace institutes spearheaded by the company.CIADI was actually the first with the other two being subsequently established at École de technologie supérieure (ES)and Ryerson University.

Concordia was chosen for its proximity to the company’s main facilities. Although other universities were approached as well, the company decided for a number of reasons to proceed with Concordia.

Te company has an annual hiring requirement of 20 to 150 engineers in the aerospace area and has found that CIADI hasallowed it to meet its hiring targets more easily.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Te important aspects of the institute are not so much the research projects conducted (although the company certainly receives value for these) but for the scholarship generated.

What internal justification in the company was needed to work with the university? Te company establishes annual budgets for its university programs and provides complete control over the projects chosento the interviewee.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? In any project, there are always a requirement for non-disclosure agreements with the student and supervisor concerned.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Te negotiations for the centre proceeded well.

Te company is concerned that in the negotiation of many research collaborations, universities too frequently try to use a‘one size fits all’ approach to intellectual property issues. Te company takes the view that it needs to control intellectualproperty in the fields of use relevant to its business and has diffi culty dealing with universities who are not able to accom-modate this.

87 See: http://www.pwc.ca/en/0_0/0_0_1/r_d.asp 88 See: http://www.pwc.ca/en/0_0/0_0_1/university_coll.asp

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How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value generated by the project? CIADI is a success. Te students produced find jobs easily in the aerospace community including the company. Teincrease of students who are interested in aerospace has been important for the company. In addition, there has been asignificant number of students who have been hired as a result of working on company projects during their degree.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te impact is on the R&D staffi ng function of the company. Whereas a few years ago there was concern about having suf-ficient personnel to hire in the aerospace field, this concern has been addressed. Te company has kept careful records of the students in the program who have an excellent job placement rate in the aerospace industry.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated?See section above.

Has this project affected the company’s potential to collaborate with universities? Te company has been very positive on this project. However, there are, as noted above, concerns about university’s expec-

tations for research collaborations in general. Specific concerns raised include government pressure on commercializationoutcomes. Tere is also concern about university researchers’ expectations of how important their early stage findings may be. Te company seeks practical solutions to product problems and will seek out researchers who can do that for them ina timely manner.

Conclusion Although not strictly speaking a research project, CIADI provides an innovative solution to the hiring problem that thecompany identified. By encouraging student-based research projects in the aerospace industry, the company has been ableto dramatically impact the number of students interested in the filed of its business.

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PROVINCIAL CROWN CORPORAION: A UILIY COMPANY

Te CaseTe company in this case is a provincial utility provider.89 Te company sets aside a specific university research budget eachyear which has remained relatively stable but for cost of living increases. Te company believes that the entire programprovides it value so, rather than singling out any specific project, this report provides a description of the overall program.

Case Background Te company is a provincial crown corporation providing the services of an electrical utility to a particular province. Tecompany operates a number of hydroelectric facilities throughout the province, as well as two thermal and four diesel gen-

erating stations. Te company generates almost C$2 billion in revenues per year.Te company funds university research at two local universities as well as other Canadian universities when the project tobe performed is of interest to the company.

At any given time, there will be between 20 and 30 projects on the go. Te annual total value of sponsored research is $1million. Tere are also 2 university chair agreements funded by the company.

Te company funds university research for two distinct reasons: 1) as part of the company’s corporate social responsibility (CSR) program; and 2) to ensure the training of an appropriate number of students that may be interested in the company’sbusiness and seek a career with it.


Projects can occur in one of two major routes. First is where the company is looking for specific expertise. In this case, thecompany will seek the expertise at the universities, first among the two local universities. In this case, the company main-tains close ties with the engineering schools and can readily identify people who are interested in fields of work of relevanceto the company. If this is not possible, the company will look further afield to other Canadian universities although this isnot a regular occurrence.

Te second route that the company uses is to encourage applications for projects directly from researchers. Tese research-ers are encouraged to propose projects that will be of interest to the company.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Most research projects fall into the applied research classification. Tey are usually directed to practical problems that thecompany is facing.

What internal justification in the company was needed to work with the university? Tere is a research management board that holds monthly meetings. Tis board operates in a highly-structured fashionand has the ultimate authority to approve projects in the context of the overall budget. Projects should have an internalchampion among the company’s R&D department. Proposed projects make a presentation at this board and the decisionis made to proceed or not.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? If any legal advice or action is required, this will be dealt with in the law department of the company. However, experiencehas been that little IP is generated by the funded university projects.


side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Te most significant contractual expectation of the company is that it will be able to freely use any research findings thatarise.

Te company’s experience with its two local universities has been good in terms of their expectations. Te company hasnever encountered a situation where it was expected to pay royalties.

89 The utility company requested not to be identied.

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An important objective of many projects is the involvement of students. Student-based research is important to the compa-ny. Since the normal annual hiring requirement is about 20 students, it is useful for the company to have students includedon projects sponsored by the company to expose students to the issues that the company faces.

How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working incompany, work done in university with results transferred via report); by what mechanism did the knowledge transferred become embedded in the company? What was the nature of the embedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value gener-ated by the project?

Projects usually proceed well. Tere is little involvement with the company during the project. Funding is based on actualexpenditures so the company will not advance money without actual expenses being incurred.

Once the project has been approved at the research management board mentioned above, there will be no further reportsto that board. It is strictly up to the research management staff within the company to ensure that reports required underthe funding are received as required. Tere is an exception reporting system.

Research reports are disseminated within the company. However, there is little integration of findings within the com-pany.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Impact on the value chain depends on which part of the company generated the initial research project. An important

justification though for the company is the CSR impact as well as the impact on ensuring that there are students comingout of the local universities who are interested in applying for jobs to the company.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated? Tere is no formal valuation of specific research projects results. Rather the overall budget for university research projects isconsidered as part of the annual budgeting cycle. As noted above, there is some thought that the university research budgetis really part of the recruitment and CSR processes.

Has this project affected the company’s potential to collaborate with universities? Te company, under current leadership, will continue to fund research at its local universities. Te company will fund any reasonable project presented to it and will not turn away anything that looks sensible.

ConclusionTis crown corporation has a highly structured approval system for projects yet has few mechanisms to integrate researchfindings generated into its actual business operations. Te projects are funded as part of a general CSR commitment as wellas part of a recruitment process.

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YM BIOSCIENCES

Te Case YM BioSciences’ business is to in-license products at early stages of development and to advance those products along theclinical and regulatory pathway to approval. Teir product portfolio is the result of careful, rational identification and selec-tion of investigational products from research institutions around the globe.

Because of concerns related to competitive reasons, the interviewees, Jennifer Seibert, the Senior Director, echnology As-sessment & Intellectual Property and David Allan, the CEO, were reluctant to single out any specific licensing case. Tisreport includes general comments received from the company on university research collaborations in general.90

Case Background Te company’s business is to in-license products at early stages of development and to advance those products alongthe clinical and regulatory pathway to approval. Obviously with this business model, the company receives a significantamount of value from sponsoring university research projects and licensing in promising therapies.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? Te company specifically avoids early-stage research and the risks associated with it. It specializes in development of early findings into drugs and the management of the clinical trials process.

Te company engages in many activities to identify sources of new opportunities. Tese include publications scans, andpersonal contacts. Although the company has a well-placed scientific advisory board, it tends not to use this group for theidentification of new opportunities. Rather, the medical director of the company will identify the need within the company for expertise and will contact appropriate researchers directly.

What were the origins of the knowledge transferred and how would it/they be classified? Was thispart of a sequence of activities with the university or a single self-contained project?Knowledge is usually applied research.

What internal justification in the company was needed to work with the university? Since the company’s business model is to in-license products, there is no justification needed to work with a university provided the relationship involves a promising therapy.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? Te company has not had any research collaborations that lead to patents. In fact, in very early stage collaborations, thereis almost a preference that there not be patents until there is a well-defined clinical opportunity.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? In dealing with universities, the company has noticed some difference between United States and Canadian universities interms of their expectations. With a few ‘big hits’ in the United States, there is more sensitivity on the part of US university offi cers as to what it expects from a collaboration or licence. Te company finds Canadian universities a little easier to deal

with likely as a result of not having a regulatory framework that requires them to assert ownership to research findings.

A significant challenge in expectations as well that the company has noticed is the experience of the people that it has todeal with on behalf of the universities. Te company finds that it is very common to have one experienced person together

with a number o inexperienced people. Expectations and the negotiation run better if the company can deal with the ex-perienced person; however, press of work usually makes this person diffi cult to access.

Te company also has a preference to work with universities where the research contract administration offi ce is separatefrom the technology licensing offi ce. Tis is driven by the fact that the company perceives that the LO is always trying togenerate licensing opportunities even from research contracts.

90 Specics o some o the company’s licensing arrangements can be ound in the investor’s inormation,including prospectuses, on the company’s website at www.ymbiosciences.com

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How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working incompany, work done in university with results transferred via report); by what mechanism did the knowledge transferred become embedded in the company? What was the nature of the embedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value gener-ated by the project? Projects usually proceed well with monthly telephone conferences and quarterly in person consultations between thecompany and university researchers. An issue of some concern is the access to data. Te company would prefer that datadissemination be limited; after all, data is a critical component of what is required in the regulatory approval cycle.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te company has received very high value from its university collaborations. Te value of the information generated hasbeen high and the company is supportive of the publication of data in these circumstances.

Tere have been some unfortunate collaborations where research had been funded but the results were not produced. Someuniversity labs have seen industrial sponsorships as a money pipe. Although this happens rarely, the company finds that ittakes about 10 to 12 months into a project to identify such situations and take steps to address the problem.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated?Te company has had new opportunities identified as a result of these research collaborations. Although the company doesnot have a formal evaluation process, it does feel that it can easily identify when value is being received.

Has this project affected the company’s potential to collaborate with universities? Te company’s business model depends on its continued partnering with those in the early stage research field. Accordingly,universities will continue to be an important part of its product pipeline mix.

ConclusionSome interesting comments relating to the need for a common intellectual property policy are offered in this report. Gener-ally, this company has found some diffi culty from working in the American environment where IP is a driving factor andprefers the more fluid and flexible Canadian environment.

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FP INNOVAIONS, OPES AND UBC

Te CaseTe co-development of technology between the University of British Columbia and Paprican – a forerunner of FP Innova-tions and its licensing to Opest for the creation of a new fibre measuring device.

Case Background In the early 1990s, research conducted at the University of British Columbia was begun with the basic research goal of measuring wood fibres quickly. Further research was conducted at Paprican – the forerunner of FP Innovations – to furtherdevelop an applied method of actually measuring the fibres. Te technology was licensed to Opest, an instrumentation

company, which then took the technology into a prototype and then a working product.FP Innovations (FPI) is an interesting research entity. It is a private, not-for-profit research institute conducting researchinto forestry, solid wood products, pulp and paper products, chemicals and energy from biomass. Funded by a combina-tion of private companies working in the area and various government programs, FPI actually combines the strengths of FERIC, Forintek, Paprican, and the Canadian Wood Fibre Centre of Natural Resources Canada under one roof. In doingso, it conducts applied research that will be of interest in this area. 60% of the research funding available to FPI comesfrom private industry.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? Tere had been a number of interactions between Paprican and the university in many pulp and paper areas. Since Paprican

was known to have expertise in applied applications relating to wood fibres, it was logical that the university would turn to

Paprican for additional assistance on the development of the project.What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Paprican had been working closely with the university for many years on many different projects. Te fundamental work in this area was carried out at the university and , the more detailed application work was carried out by Paprican. Tis wasapplied research in that the actual counting of fibres had a practical utility.

What internal justification in the company was needed to work with the university? No justification was required. It was expected that researchers at Paprican and UBC would find opportunities to work together.


A patent was filed on the invention jointly made by researchers at each of Paprican and UBC. Te patent was jointly ownedby them and licensed to Opest.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Tere was no requirement for a separate contract to conduct the work between Paprican and UBC as there was a generaloperating agreement that applied.

How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working incompany, work done in university with results transferred via report); by what mechanism did the knowledge transferred become embedded in the company? What was the nature of the embedding

(e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value gener-ated by the project? Te project proceeded easily. In fact, the project has proved that 3-way collaborations can work.

FP Innovations sees its role as taking the risk out of a technology developed at a university before a company will be inter-ested in it. In this sense, this is exactly what happened in this case: Paprican was able to add significant practical value tothe technology before the company could take it over for a product.

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What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te company has had a new product added to its product line.


Although actual unit sales are small the company has taken this product and sold over 110 units worldwide, two-thirds of these have been sales outside of Canada resulting in revenues that would not exist but for this project.

Has this project affected the company’s potential to collaborate with universities? FP Innovations continues to expand relationships with additional universities other than just UBC. However, intellectualproperty seems to be a perennial concern of universities which concerns FPI In many cases, there is limited value in theUniversity IP until FPI carries out extensive application work on it. Te overall development is likely to be the result of the

joint efforts of both university and FPI and the reluctance of some universities to jointly own IP does hinder the ability toform col-laborations.

Conclusion

FP Innovations represents an important type of entity combining private and public money to work with universities tode-risk the early stage findings. Te subject case shows that it can be done successfully. However, in order to expand opera-tions beyond the one university that it currently works with will require universities becoming more flexible with respectto owning IP from an objective of owning intellectual property and recognizing the relative value of early stage findings issometimes relatively small.

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DOFASCO AND CRASH FORMING (U W AERLOO)

Te CaseDofasco (now the Canadian division of Arcelor-Mittal) wanted to test hydro-formed vehicle frames for strength – espe-cially in comparison with conventionally-formed vehicle frames. Te hydro-formed frames were made in Dofasco’s facili-ties and tested at the University of Waterloo. Te testing comprised testing the frames in simulated crashes to show theirstrength as opposed to conventionally fabricated frames.

Case Background In the steel fabrication process, tubes are easier to make than hollow square structures. However, in using such steel – par-

ticularly in the fabrication of steel vehicle frames – hollow square structures provide greater structural stability and usability.In order to convert a tube to a hollow-square, water under extremely high pressure is introduced to the interior of the tube

which is placed into an appropriate mould. Te water causes the tube to expand assuming the shape of the mould.

A challenge with hydro-forming has to do with the deformation of the steel tube especially in corners and on other ge-ometries that create pinch points. In these cases, the steel will think out and weaken. In order to have hydro-formed tubeaccepted by a key marketplace being vehicle manufacturing, Dofasco needed to show that hydro-formed frames acted as

well in critical events such as crashes as conventionally-fabricated frames.

Although there are a number of universities in the Province of Ontario – geographically proximate to Dofasco’s mainoperations – that were able to hydro-form91 and conduct the work, Dofasco chose the university of Waterloo and Mike

Worswick.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact from

university, networking events, conference)? What alternatives were considered? Tere were a number of research networks being developed in the 1990s to assist the use of university researchers by in-dustry. In particular, Auto21, a Network of Centres of Excellence had attracted the interest of Dofasco. As Dofasco was

working with General Motors on the issue of how to improve the safety of vehicles constructed with hydro-formed steel,various university researchers in this area in Ontario were known to Dofasco. It is not clear how Worswick came to Do-fasco’s attention but he was the one chosen to conduct this project.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Te project was clearly related to an applied subject. Although some aspects of the project touched on basic properties of the materials involved, the end result was clearly an application.

What internal justification in the company was needed to work with the university? Internally, the project was within the departmental budget of the R&D department and accordingly was approved at thatlevel.


Although there was a patent filed on some of the alloys devised during the project, the important knowledge transfer wasin the data sets. Te raw data had value in the approval of the use of hydro-formed frames in actual production use. Somechallenges arose when the data obtained with one vehicle manufacturer was wanted by another one. Even though the datacould be anonymized, there were some concerns in the use.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were

they resolved? Te university was very easy to deal with. Waterloo has a reputation as a place that tries to get things done. Te finaliza-tion of the agreement was problematic in that the vehicle manufacturer wanted to ensure that certain provisions wereincluded.

91 Hydro-orming requires heavy presses to hold the steel being ormed.

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How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value generated by the project? Te project proceeded in a straight-forward manner. Each of Dofasco and the university had specific tasks that were per-formed in their own facilities. Tere were regular interactions between the R&D personnel of Dofasco and the university.Generally, the company personnel would go to the university.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te work produced significant value for the company in that significant new product in the tube steel line could be soldfor vehicle fabrication.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated? Te value generated was easily in the tens of millions of dollars of revenues arising from this project. Tat was the value of new product that could be sold into a new channel with the information available on the safety of the final product.

Has this project affected the company’s potential to collaborate with universities? Te company has a long-standing history of supporting research at Canadian universities. Since the corporate transition92,

the company is waiting for information on the long-term direction. As part of its efforts, the company has been highlight-ing advantages of doing research in Canada including the tax credit regime for research and government support programsfor the subsidization of university research projects. Only time will tell what the long-term impact is.

Another important reason why the company is likely to continue to use university labs for projects like this is the ability to access specialized equipment.

ConclusionTe case illustrates a very practical project that delivered tens of millions of dollars of value to the company from new product sales. Te project utilized specialized facilities at the university in a project that the company would not have beenable to affect itself.

92 Doasco used to be independent. It is now the Canadian division o Arcelor-Mittal, a global operation.

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BIORIGINAL AND A GRICULURE C ANADA

Te Case A research collaboration and subsequent licensing arrangement for production processes related to the manufacture of conjugated linoleic acid (CLA). Te company has generated millions in sales further generating significant royalties for

Agriculture and Agri-Food Canada (AAFC). Interviewees at Bioriginal were Joe Vidal and Jenny Hoffman.

Tis case also illustrates the impact that federal government labs (AAFC) can have in the academic research field. In fact,this case won the award of the Federal Partners in technology ransfer as the 2005 echnology ransfer Award for the suc-cessful development, transfer and commercialization of a product.93

Case Background Bioriginal is a leading manufacturer of essential fatty acid (EFA) products. EFAs are processed from a variety of sourcesincluding various grains, plants and fish. EFAs are added to health supplements or foods and are generally known as nutri-ceuticals. CLA is a form of EFA.

In the 1990s as a part of its research program looking to expand its product lines, Bioriginal contracted with AAFC toconduct research under a Matching Industrial Initiative (MII) program. Tis program had both Bioriginal and AAFC co-funding research into various ways of producing CLA. Te research led to actual products that Bioriginal has marketedproducing significant sales for itself and royalties for AAFC.

How was the requirement to interact with [the government laboratory] identified? If the opportu-nity resulted from initial contact with [the lab], how did this occur (eg web search, existing contact,contact from university, networking events, conference)? What alternatives were considered? Bioriginal regularly scouted opportunities for new products in the EFA business. Te product development personnel of the company knew about a dozen different researchers who worked at the AAFC labs located in the same city (Saskatoon,Saskatchewan). Local proximity certainly played a factor in being aware of AAFC’s capabilities.

Although the company has collaborated on research programs with researchers located at universities, no alternatives forthis project were considered before entering into negotiations with AAFC.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Initially, the project could be characterized as basic research. Te project initially examined how CLAs could be producedfrom saffl ower oil. However, as the project progressed, it became obvious that actual products would result and, therefore,this project could more properly be classified as applied research.

What internal justification in the company was needed to work with the university? Although at various times, the company has used a semi-formal Stage-Gate system for new product development, ulti-

mately the justification for this specific project was based on the knowledge of the AAFC researcher and the availability of the Matching Industrial Initiative (MII) program which provided co-funding for the research.


A number of patents have been filed in the United States, Canada and Europe on aspects of the production process and theproducts. Licence terms were already built into the initial research contract.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Negotiations proceeded very smoothly. An important trade-off for AAFC was co-funding the research in return for a futureroyalty on any commercial use by the company. Te perception of AAFC that its MII funding would be repaid throughroyalties was a key aspect of the company’s interest. Te company felt this was an excellent approach for AAFC to have:rather than getting paid all of the research costs up front, by co-funding the costs and then taking a royalty, this was a cleardemonstration to the company of their interest in sharing the risk of the project. Although this project proved to be a win-ner, the research could just as easily have yielded little in the way of commercial products.

Another interesting negotiation challenge was how to deal with royalties on CLAs which might be added to an end product(say, as a food additive) or sold as the final product itself (say, as a nutritional supplement). Te parties were able to quickly

93 See: www.ptt-ptt.gc.ca/eng/success/awards2005/2005awards1.html

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come up with an appropriate methodology to reduce the royalties in appropriate cases to continue to make the productprofitable to produce and sell.

How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value generated by the project? Te project proceeded over two years. Tere was a great deal of interaction between AAFC and Bioriginal researchers. Tese

interactions normally took place at Bioriginal’s facilities. Te interactions were also facilitated by physical proximity. (Boththe AAFC researcher and the Bioriginal facilities are located in the same city.)

Te actual embedding of knowledge took place by the creation of the production processes in the company’s facilities usingtheir personnel. Te value from the project was generated by actual sales of CLAs.

Te actual timelines that AAFc research followed was considered to very good

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te company was able to add ten new products to their EFA line-up. It was very easy to identify the added value and, forthe appropriate payment of royalties to AAFC, regular accounting was a requirement.


more effi cient process) and how was it evaluated?New products with millions of dollars in sales (on the order of $3 to $4 million per year at its peak) were generated. Tisgenerated royalties in the range of $100,000 to $150,000.

Has this project affected the company’s potential to collaborate with [government labs]? Te company would certainly consider other appropriate projects such as this in the future. Te availability of the MIImatching funds was certainly a factor and the company would be interested in seeing such opportunities to lower its risk on new product development ventures in the future.

ConclusionTis case demonstrates the ability of federal government labs to also provide research that is commercially interesting andleads to viable marketable products. Te availability of co-funding for the research against a royalty stream was highly re-garded by the company leading to a decrease in their risk of the project.

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INNOVOECH AND HE BIOFILM R ESEARCH GROUP (UNIVERSIY OF C ALGARY )

Te CaseTis is actually a case that produced negative results but had significant value to the company. Innovotech is an early stagebiotech company sponsored a Ph.D. student to look at the question of heavy metals and their impact on biofilms. Te work

was conducted at the University of Calgary where a number of researchers had a close relationship to the company.

Te interviewee was Ken Boutilier the President of the company.

Case Background

Innovotech evolved from academic research at the University of Calgary. Te Biofilm Research Group (BRG) of the Uni-versity is recognized as a center for the testing of antimicrobials, biocides and device coatings and for developing animalmodels to study biofilm disease. Te BRG has produced intellectual property which has been licensed by the company andis the platform from which their R&D has evolved.

A question that arose of interest to the company was the issue of the use of heavy metals as possible agents against biofilms.In order to examine this question, the professor at BRG – who was involved with the company – suggested the use of aPh.D. student who was also supported by a Natural Sciences and Engineering Research Council (NSERC) grant. In fact,the student had already been recruited.

Te company determined that there was no other effective way to get at the question. Costs were very modest to the com-pany being $4,000 per year for two years. Te result though of the project was to establish the value of different metals asdisinfectants against biofilms.

How was the requirement to interact with a university identified? If the opportunity resulted from

initial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? As a spin-off from the BRG, there was a constant level of research interactions between company and university with twokey persons working for both locations. Tis was further enhanced by the fact that the company had its research staff lo-cated in university premises. Te project was just a logical expansion of this relationship. No alternatives were consideredfor how the project would be conducted.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? As noted, this was clearly part of an overall R&D approach for the company in the biofilms area. Tis specific research isclassified as basic research which was known, if successful, could easily lead to applied research projects and future prod-ucts.

What internal justification in the company was needed to work with the university?

Te company easily justified this project on the basis of the new knowledge in biofilms that would be created. Tis wasdone by the company personnel who directed the science program of the company. Te relative modest cost of conductingthe research made the justification easy.


As the project led to a negative result, there were no patent filings or other transactions needed.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Negotiations were effectively non-existent. Tis was the funding of a Ph.D. who was primarily supported by NSERC fund-ing. Accordingly, NSERC rules outlined what the expectations were. Te company and university both approached this asa research project and, given its very early stage nature, there was little consideration of intellectual property issues.

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How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value generated by the project? Tere was little interaction between the university and company for the conduct of the project. Te student was relatively

well motivated and supervised by a person who was also functioning for the company in the R&D area.

Te project effectively led to a negative commercial result: there were unlikely to be any products resulting from the re-

search area. Te company was provided the information in the form of oral reports and copies of the publications thatensued from the project.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te impact on the company’s value chain was to discontinue further research in the area. Te actual amount saved would belikely diffi cult to quantify. However, it was important to be able to easily get to a ‘No’ which this project accomplished.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated? Te value obtained was in the resources not expended on future research in the area. Although diffi cult to quantify, theamount was clearly a significant multiple of the amount invested in this project.

Has this project affected the company’s potential to collaborate with universities? As a university start-up with personnel straddling the company-university border, the company was already well inclinedto use universities for research projects.

Conclusion Although an example of a project that could have been considered to have failed, the ability to get to a ‘No’ as quickly asit happened in this project, gave the company significant value by obviating further investments in the research area that

would prove to be unsuccessful.

It is interesting to note that although academics might consider the research area to have been ‘disappointing’, negativeresults can not only be important to companies but may have very significant value if they can prevent the company fromhaving to continue to fund research in an area that is unlikely to yield commercial application.

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MOOR COACH INDUSRIES AND R ED R IVER COLLEGE

Te CaseTis case is important as an illustration of an interaction with a Canadian Community College.

Motor Coach Industries (MCI) is North America’s leading manufacturer of intercity coaches serving charter and touroperators; line-haul and scheduled-service operators; transit agencies; and conversion companies. In 2006, MCI identifieda project need relating to more stringent Environmental Protection Agency 94 rules relating to reduced emissions. MCIneeded to have a prototype and specifications developed related to incorporating a new heavy duty diesel engine into MCI’sD4500 model coach. Jim Macdonald, the director of engineering of MCI was the interviewee.

Case Background Red River College – Manitoba’s second largest post-secondary educational institution – was contracted by MCI after aproposal and bid process to develop the prototype. wo Red River instructors worked with a number of students on theproject which required a prototype to be built incorporating a new Cummins engine combination with a common coolingsystem plus a series of electrical and mechanical components into MCI’s mode coach chassis. Te prototype underwenttesting, certification, and full documentation at Red River before being sent for additional testing at Cummins facilities inCalifornia.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? MCI knew from a seminar that they attended at Red River that they had the facilities to do the work. A Request for Propos-als document was prepared and Red River was one of the proponents invited to bid. Other bidders were more traditional

private sector contractors. Although the Red River proposal was made outside of the RFP process, it was considered and chosen as the successful bidin accordance with the scoring system established in the RFP process. As a result of their success on the scoring criteria,MCI entered into negotiations with Red River. Red River scored well on the RFP system on the basis of having both thefacilities and personnel with technical expertise.

As part of the project planning phase, MCI had considered a number of alternatives including adding staff and contractingout to accomplish the project. Ultimately, the project was decided to be contracted out and MCI’s procurement process

was followed.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Tis was a self-contained project with Red River. MCI knew they had a specific need and sought to meet that need withthis project.

What internal justification in the company was needed to work with the university? Because Red River scored well on the RFP scoring system, no special justification was required. Tey were treated as anormal contractor on a procurement contract.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? Te physical prototype and the specifications were transferred to MCI. Te intellectual property contained in them wastransferred to MCI. Tere were no formal legal registrations (copyrights, patents, industrial designs) and therefore no needfor any licensing or transfer.


side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Te RFP process was conducted under a standard non-disclosure agreement that all proponents had to agree to. In addi-tion, the RFP included a proposed agreement for the project that all private sector proponents indicated they could agreeto without changes.

94 Although the EPA is an American agency, since MCI operates in both Canada and the United States asdoes its clients, the US regulatory change produced efects in Canada such as this.

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Unlike private sector proponents in the RFP, Red River did indicate that they would require alterations to the contract inthe intellectual property area. Specifically, Red River wanted to ensure that any background intellectual property that they

were bringing into the project would remain theirs.

Red River was very reasonable in their value expectations. Te contract’s finances were competitive with private sectorproponents and this was made more simple by there being no overhead or government funding issues. MCI was preparedto pay a ‘market rate’ for the project.

MCI was happy to make negotiating allowances as it recognized that as a publicly-funded community college, Red River was a “different animal”. Te negotiations were characterized by a great deal of openness on the part of both of the partiesin dealing with issues.

How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value generated by the project? Te project proceeded very smoothly. Although scheduled for six months, the majority of the work was performed in three.Likely the proximity of Red River to MCI was a contributing factor to successful scheduling. Te prototype constructiontook place on Red River’s campus and MCI personnel would visit as often as two or three times per week.

MCI acquired the prototype and specifications for future construction. MCI personnel were also involved on a hand’s onbasis with the construction of the prototype so that knowledge was quickly available to them.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Te value that MCI received was directly tied into needing to meet the EPA requirement. Te new model has also been asuccessful product in MCI’s line-up. As described by the interviewee: “It sells”. Te commercial success of the product islikely as a consequence of the model having lower operating costs.

MCI has also hired employees from Red River as a direct consequence of the project.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated? Te nature of the outcome is a new model that sells. As a result the expenditures on the project have had an 18 monthpayback period.

Has this project affected the company’s potential to collaborate with [community colleges]? MCI certainly expects to have more projects with Red River in the future. Physical proximity is a major factor in this.

MCI has also conducted projects with the University of Manitoba. However, MCI found these projects more diffi cult toget going than this case at Red River. MCI also has found universities to be less open to targeted projects.

Conclusion As the only interview conducted for a community college project, this case provides some interesting observations on thepotential of this type of educational research institution for the future. Projects involving the development of prototypes orskilled personnel in specific industrial skills are likely to be well-placed in such institutions.

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ONCOGENE X AND UBC

Te CaseOGX-011 (also known as custirsen sodium) was licensed by OncoGeneX from the University of British Columbia. Tedrug was the basis for the founding of OncoGeneX.

Te interviewee was Scott Cormack, the CEO of the company. He initially began part time with the company – having joined it from one of the early seed-round funders.

Case Background

OGX-011 was discovered and patented by a team of researchers led by Dr. Martin Gleave at the Prostate Centre at Van-couver General Hospital – affi liated with the University of the British Columbia. Te company was spun-out and licensedOGX-011 and is currently developing and commercializing OGX-011 with appropriate partners.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? Te company was initially incorporated not by the university but by Dr. Martin Gleave, the principal investigator behindthe discovery of OGX-011. Te incorporation occurred in May 2000. OGX-011 was subsequently licensed into the com-pany from UBC who represented the Vancouver General Hospital. UBC has an affi liation with VGH which provides thatthe university represents the affi liated hospital in all licensing matters.

Te requirement for the licensing transaction was driven by the company’s desire to ensure that it had proper licensed thetechnology.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Te research can be considered ‘Practise-based Research’ as it arises from understanding of actual clinical use of antisenseolgionucleotide therapy.

What internal justification in the company was needed to work with the university? Without the licence the company would not have had clear rights to the use of the underlying target or lead drug candidate.Tere was little justification required.


A significant patent estate has been established. Initially, all patent matters were handled by UBC. Over time, the company has hired a registered patent agent who has taken over the application and prosecution process.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Te actual licence agreement is a public document95. Te actual negotiations were very smooth as the expectations of value,royalties and other provisions were very reasonable on the part of the university. Te university also initially provided sig-nificant expertise to ensure that the patent applications were made in a proper form and prosecuted as required.

How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know

that this had occurred? What did the company need to do subsequently to realise the potential value generated by the project? Te university’s management of the licence is described by the company as ‘spectacular’. Tere have been various discus-sions at appropriate times as to related technologies that are included in the original licence or have required new licensing.Te company has felt that all such negotiations were conducted in good faith with the interests of all parties being takeninto account.

95 With the exception o certain nancial terms redacted or competitive reasons, the document is availableas part o a proposed initial public ofering, since withdrawn, at www.sec.gov.

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Te university has also been involved in subsequent negotiation of clinical trials relating to clinical trials of the drug andother licences of other technologies in the same therapeutic area.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? It is very easy to identify the contribution to the company’s value chain. It is to the products under development. Te po-tential market for the project – if it clears all regulatory hurdles – is large.


more effi cient process) and how was it evaluated? Again, the scale of a successful regulatory outcome will be dramatically large.

Has this project affected the company’s potential to collaborate with universities? Interestingly, the company has made a total of five technology licences with UBC. However, it has not been receiving thesame quality of disclosures from other universities as it did from UBC so it is diffi cult to say if it may collaborate withothers.

On the issue of working with other universities, the interviewee also noted that when the company was initially founded,it received approximately 400 disclosures of technologies from universities. However, recently, it has only been seeing fiveto 10 disclosures per year. Te company has diffi culty in understanding why there has been this significant drop-off otherthan to guess that the efforts of other universities may have just generally dropped off.

A final remark relating to what the company has seen out of universities is that most technologies on offer are generally attoo early a stage for it to consider developing.

ConclusionTis case provides a very positive story related to the licence of a lead compound or technology. As a result of the very goodrelationship between company and university, the company has licensed other technologies. Tere are also a few interestingobservation about the quality and quantity of technology disclosures that the company is seeing.

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PROVINCIAL A EROSPACE AND MEMORIAL UNIVERSIY OF NEWFOUNDLAND

Te CaseTe RAVEN (remote aerial vehicles for environmental monitoring) is supported by Provincial Aerospace Ltd and vari-ous Canadian government departments. Dr. Siu O’Young of Memorial University of Newfoundland’s (MUN) Faculty of Engineering leads a team that works with Provincial Aerospace Limited to develop collision avoidance systems for smallunmanned aerial vehicles.

Case Background Te company commenced airborne surveillance operations off the east coast of Canada in the early 1980’s. Teir first cli-

ents were involved in the offshore oil exploration industry operating in the ice-infested waters of the harsh North Atlantic.Using only visual surveillance tools they learned the importance of complete, timely and accurate information.

Te original interest grew into a need to complete the surveillance operations using unmanned vehicles. Partnering withDr. O’Young at MUN, the company has dramatically expanded its interests in the RAVEN program. Work as part of thisproject includes collision avoidance systems and specialized sensors.

Te company is proud of being the first civilian operator of unmanned aerial vehicles (UAVS) and partners with MUN tomaintain that leadership position.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? Te company has had a long-standing relationship with Dr. O’Young for a period approaching a decade. In some initial

work that was performed for the company, he demonstrated a high level of leadership with great chemistry between himand the company representatives on the project. Te current project is just an expansion of the earlier work.

No alternatives to using Dr. O’Young were considered.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Tis is applied research. Te work has been developing within the company with some of the development of UAVs con-tracted out to the university over the last 7 to 8 years.

What internal justification in the company was needed to work with the university? Te company has a strong corporate culture of innovation. New projects such as RAVEN are not diffi cult to receive ap-proval. Te actual approvals came from senior management of the company without a great deal of cost/benefit analysis.Tere was, however, a formal proposal considered by the senior management team prior to moving ahead.

A significant factor in proceeding with this project was the additional government funding that was available from one of the government partners.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? Te most significant legal documents in place are non-disclosure agreements. Patents are generally not a viable option asmost of the technologies used are known; the project depends on integrating these technologies in a useful fashion in thearea of UAVs.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved?

Te actual negotiations have been complicated by the involvement of multiple government agencies and the university.Te most significant challenge is the provider of the largest amount of the funding for the project and their concerns aboutsecurity for the amounts being advanced. Negotiations are ongoing.

Negotiations with the university have progressed with ease. Teir perceptions of value are reasonable to the company.

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How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value generated by the project? Te project is proceeding well. In addition to there being a high level of interactivity with the principal researcher, thecompany also enjoys a high level of interactivity with the dean of MUN’s engineering faculty. Te company is impressed

with the industry experience of both the researcher and the dean, which they believe keeps them highly tuned to industry

needs. Te company’s realization of value in this project comes from the improvements to the UAVs in actual use.What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify? Tis project has wide-reaching impact on most of the company’s value chain.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated? Te company actually uses the company’s relationship with the university as part of its annual performance review processfor some of the senior executives. As such, this is an issue that the company does work on. Another important aspect of thecompany’s relationship with the university is the issue of having suffi cient trained staff available to hire. Tere is a require-ment of 50 to 75 new staff members every year so the more that are attracted to the company because of the sponsorshipof the project at the university, the more beneficial for the company.

Has this project affected the company’s potential to collaborate with universities? MUN has an extremely healthy environment for industrial partnerships like has been constructed with the company. Tecompany will certainly look forward to future projects with MUN.

ConclusionIn part, this case shows the value of a solid relationship in order to develop a niche market. Te market may be more easily developed given the geographic reality of Newfoundland. However, the availability of an engineering school to also help thecompany as it develops its products is important. Another interesting issue raised in this case is the attitude of the company in their annual performance reviews of senior executives to fostering stronger relationships with the local university.

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PFIZER

Te CasePfizer is a well-known pharmaceutical company with world-wide operations including an extensive operation in Canada.Te interviewee for the company, Dr. David Brener, is known in the Canadian university research administration commu-nity having held important university-industry liaison roles at the Canadian Institutes for Health Research (CIHR) before

joining Pfizer as the Director, R&D Alliances. Rather than highlighting any specific Canadian university collaboration, theinterview dealt with a generalized view on university-industry collaborations at the preference of the interviewee.

Case Background

Pfizer has had a steadily increasing Canadian budget for research collaborations over the last few decades. Rather than look-ing for specific drug targets or ‘block busters’ for in-licensing, the purposes of the Canadian university liaison function areto search for innovative thinking known to reside in academic medical centres and institutions.

How was the requirement to interact with a university identified? If the opportunity resulted frominitial contact with a university, how did this occur (eg web search, existing contact, contact fromuniversity, networking events, conference)? What alternatives were considered? Pfizer is aware that the R&D conducted within the company is likely subject to the cultural constraints which normally arise in a corporate setting rather than the freer thinking that pertains in a public environment. Since these constraintslikely limit the ability to provide an innovative view of any specific research issue, university research is an important aspectof the company’s research.

Pfizer’s Canadian university liaison function seeks to understand where such thinking is required in the company and tomatch the company’s requirements with the university’s abilities. In order to identify appropriate expertise, the company

undertakes extensive outreach activities in order to have Canadian researchers considered for opportunities as they arise.Te company will frequently see general technology offerings and project proposals from those at academic medical cen-tres – including circulations from technology transfer offi ces of technologies. Te company attempts on its web sites andin other fashions to make its research interests widely known to the research community. Accordingly, it is concerned how many inquiries and communications that it continues to get outside of these areas. Academic medical centres should takeinto account the company’s expressed directions. Certainly, the company is looking to conduct research at earlier stages inorder to gain a more fundamental understanding of the processes involved.

What were the origins of the knowledge transferred and how would it/they be classified? Was this part of a sequence of activities with the university or a single self-contained project? Te research is usually Applied Research. Sometimes the research actually works from an applied or clinical perspective andseeks to work backwards to a more basic understanding of the fundamental principles at work.

What internal justification in the company was needed to work with the university? Te most important justification for the company is the quality of the research group. Canadian academic medical centresneed to understand how geography impacts on this as well. Te example was given of the oncology group of the company located in Southern California: they are more likely to seek collaborations with academic medical centres in southern Cali-fornia rather than wanting to travel to Canada. It is only be ensuring that the quality of research that is performed is of thehighest quality will the company’s personnel be interested in the collaboration.

Te desire to collaborate is also driven by the business environment that the company works in. Issues such as time tomarket, barriers to entry and the regulatory environment will also play a factor in making the decision to support researchprojects in Canada and work into the justification.

What transactions need to occur to support and give legal effect to the project KT (e.g. IP licens-ing)? Patents are filed when a true competitive advantage is identified. However, in the clinical environment, this happens fairly rarely.

How did the negotiations to set up the project proceed? How were the negotiations managed and,where there was a financial component (e.g. a research sponsorship, licence agreement) what was your perception of how the university approached this? What were the perceptions of value on each side and how were they assessed? Were there any issues arising in the negotiations and how were they resolved? Negotiations with any specific university really depend on which university the company is negotiating with. Tere is aconcern that Canadian universities are “all over the map” in terms of their expectations and contractual requirements. It

would certainly help if there was greater consistency in terms of the expectations of universities.

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Te real issue for the company is whether or not Canadian universities can see ‘the big picture’. Specifically, the company looks to acquire the best expertise in the world. At times, it seems as if the Canadian universities are competing betweendifferent provinces or regions whereas they really should be collaborating to compete with universities on the world stage.

A final consideration of interest to the company is the flexibility of the academic medical centre in negotiating the col-laboration. Generally, the company has seen institutions that attempt to approach negotiations from a rigid rules-based ap-proach. Tis is less desirable than those institutions that are ready to be flexible and deal with matters in a principles-basedfashion where there is room to negotiate.

Te company seeks out the best expertise and most qualified researchers for a specific task and then choose those most likely to comprehend the expectations. Te key to choice is the talent, competencies and ability to deliver on expectations.

How did the project proceed? i.e. What was the nature of the interaction (e.g. academic working in the company, work done in university with results transferred via report); by what mechanismdid the knowledge transferred become embedded in the company? What was the nature of the em-bedding (e.g. certain key individuals with new skills and knowledge)? How did the company know that this had occurred? What did the company need to do subsequently to realise the potential value generated by the project? Te most significant factor for the company in how projects proceed is anything that can shorten the time that it takesto get a product to market. Any work in the process of pharmokinetics, ADME 96, clinical trials, medicinal chemistry,manufacturing or regulatory approvals that can help shorten any of the times, will be given favourable review. In a similarfashion, anything that might lengthen the time to getting to market will be avoided. As such, the company looks favour-ably at academic innovations that may reduce timelines to development and help the company in speed up the process of getting products to market.

What was the nature of the impact upon the company value chain (i.e. direct contribution of tech-nology to product development, manufacturing or logistics process, upskilling/increasing knowl-edge of staff, service development)? How easy is it to identify?

As noted, time to market is an important driver for the company. Accordingly, the most significant value is found in any project (which could at just about any stage of the process) that can reduce that time to market. Reduction of time tomarket is an approval value chain impact for the company and any projects proposed in this area are likely to meet withfavour.

Te company does track dollar value of its university projects closely. It also tracks publications but does not do a good jobof tracking the value of a new perspective which is what academic medical centre research frequently provides. Te com-pany believes that it would be useful if both the academic medical centres and the company could develop better measuresfor tracking projects during the project. oo much assessment is left to the end of a project or milestone conditions whichmay be too late to identify significant potential for adjustment.

What was the nature and scale of the outcome (e.g. increased sales, new markets, faster to market,more effi cient process) and how was it evaluated?See previous section.

Has this project affected the company’s potential to collaborate with universities? Te number of collaborations with Canadian academic medical centres is likely to increase. A significant driver is the per-ceived return on research investment made by the company in academic medical centres. A secondary consideration is thephase of the business cycle that the company finds itself in at any given moment. .

ConclusionTis case provides insights into the considerations that a large pharmaceutical company makes in considering collabora-tions with academic medical centres. Although Canada presents a few opportunities such as tax credits, ultimately it is thequality of the research team that will be the most important. In addition, the company has a greater appreciation for thosethat approach it with projects that are closely aligned with its research interests than those that will merely ‘cold call’ or

make proposals without any insight into what the company is looking for. Te company will also make speculative invest-ments in new research ideas especially if key opinion leaders are involved.

96 absorption, distribution, metabolism, elimination

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