Management of intellectual property in publicly-funded research

The difference is attributed to the combination of several factors:• Most European PROs have a relatively low number of patents compared to their UScounterparts, not because the science in the US is better, but because of a largerpropensity to file patent applications. In addition, the US patent system is reportedly 5times less expensive than the patent system in Europe.• There is also a time lag effect, since the US PROs have been encouraged to patent sincethe passage of the Bayh-Dole Act whereas the interest for European PROs to managetheir IP is only recently starting to spread;• The demand for licenses from PROs is also larger from US companies than fromEuropean companies because of a larger domestic market and a more active network oftechnological SMEs backed by venture capital. Indeed the problem facing us could evenbe described as being a surfeit of potentially great new technologies, which because theycome from PROs are too early to warrant industrial investment. The recently publishedLambert Report from the UK 19 indicates one other reason for the lack of industrialuptake, namely the dearth of technology-dependant (research- active) industries inEurope. For those that are around, very often the risks are just too high.• The funding of PRO research by US government is significantly larger than in Europe,both in absolute terms and in relative terms, with the US government funding more than90% of all PRO research.Therefore we need to find ways of getting more development funding in order to weed outtechnologies that truly have no commercial application, thus ensuring that if the proof of principledoes work there is a greater likelihood of an industrial partner running with the development. This callfor a more strategic relationship with not just traditional industry (see chapter 4 below) but with otherstakeholders, such as local economic development agencies and VCs (see chapter 5 below).3.2. General Principles of PRO licensingTechnology Transfer from PROs into the industrial environment has traditionally adopted a licensingmodel. The PRO grants user rights to its intellectual property in the form of a licence, which can beexclusive, with or without the right to sublicense, which enables the industrial partner to develop andcommercialise covered products and/or processes in return for licence fees and/or royalty incomerelated to the commercial returns achieved by the industrial partner. There are a number of reasonsfrom the PRO perspective why this is a desirable model.Firstly there is no sustained dilution of the Intellectual Property Rights including know-how andmethodology which reflect the vast expertise developed and acquired by the PRO ResearchDepartments over many years, supported by a broad range of research sponsors.Where new technology is identified then PROs are obliged to ensure that appropriate development anddownstream use can be made of the early stage technology rather than it sitting locked away in auniversity laboratory or alternatively perhaps being sold or licensed to a company, which does notproactively develop or make use of the technology. Therefore, by entering into a License Agreement,the University establishes a direct partnership with the industrial partner, which means that there canbe a dialogue about the use of the technology and its potential as a commercial product or process. In19 “Lambert Review of business-university collaboration” – http://www.hmtreasury.gov.uk/media//06729/lambertemergingissues_173.pdf26