© IMG GmbH, T. Schwing, 2004WB-Seminar 09.06.2004 / Folie 1 IMG Innovations-Management GmbH World...

© IMG GmbH, T. Schwing, 2004 WB-Seminar 09.06.2004 / Folie 1IMG Innovations-Management GmbH

World Bank Seminar in cooperation with Ministry of World Bank Seminar in cooperation with Ministry of EconomyEconomy

and Latvian Investment and Development Agencyand Latvian Investment and Development AgencyJune 9th 2004, RigaJune 9th 2004, Riga

Management of Intellectual Property in publicly-funded research organisations:

Towards European guidelines

Thomas Schwing

Managing Director ofIMG Innovations-Management GmbH, Germany

Innovation Relay Centre - IRCHessen / Rheinland-Pfalz

Opinions and views expressed in this presentation are those of the presenter


Structure of the presentationStructure of the presentation

• Background

• European Situation and Research Policy

• Towards European Guidelines

• Models of IP-Management

• Conclusions and Recommendations


How is Knowledge transferred between PROs and Industry?

• Graduated students• Industry-funded research• Publications & presentations & Internet!• Informal & collegial networking• Consulting by Faculty Staff• Sharing of biological research materials• Intellectual Property – Licences• Spin-off companies• …


The European situationThe European situation

• Only a few countries have adopted Bayh-Dole like regulations

• IP-Management is poorly recognised and funded• No compatible legal framework in Europe• No compatible good practices in European PROs• Not enough professionals for technology transfer/licensing• Licensing (linear) model does not work well – not enough

uptake by industry (SMEs)• Partnering with industry works but needs developing into

“responsible and fair partneship”• Not enough spontaneous spin-out creation: the process

must be assisted


The European innovation sceneThe European innovation scene

• 1/3 of all R&D in Europe is performed by PROs

• 2/3 of all pre-competitive Research is performed by PROs

• Industry tends to concentrate on Development

• Development uses more resources than Research

• 70% of all patents based on PRO results

• There is no Development without seeding from Research

• But a large part of research results is not used for innovation


IPR & innovation issues in European research policy

• Political issues :– The Lisbon objective of becoming the most

competitive knowledge economy – 3 % action plan (Commission Communication

“Investing in research : an action plan for Europe”)– Commission Communication “The role of universities

in the Europe of knowledge”

• Practical issues in Sixth Framework Programme:– IPR provisions– Innovation-related measures


IPR & innovation issues in European research policy - 3 % action plan 2003• Commission Communication “Investing in research : an

action plan for Europe” aiming at raising R&D investment to 3 % of GDP by 2010, with 2/3 from private sector

• Improving the regulatory environment for R&D in Europe concerns not only R&D per se but also human resources, fiscal & financial issues, etc. … and IP/TT issues

• Broad support from Member States, industry, Commission presidency (new “Initiative for growth”), ...

• 46 new actions/recommendations to be implemented by the Commission, Members States and/or relevant stakeholders (universities, …)

• 5 of which relate directly or indirectly to IPR


IPR issues in publicly-funded research

Increased attention:

• at international level:

e.g. recent OECD survey/report “Turning science into business”

• at national level:

e.g. abolition of the “professors’ privilege” in Germany (2002)

• at EU level:• recommendations in the 3% action plan• statements in the Communication on the role of universities• EURAB recommendations• On-going activities in DG Research and DG Enterprise (Expert groups,

studies, ProTon network)


Towards European Towards European GuidelinesGuidelines

• Group of experts (Industry, Research, IP-Managers) assembled by the EC

• Conclusions published in the report: http://europa.eu.int/comm/research/era/pdf/iprmanagementguidelines-report.pdf

• Endorsed by Valencia statement of ProTon Europe (Public research organisations Technology offices network-Europe)

• Will serve as the basis for producing a manual and developing guidelines and tools


Main topics

• Should universities and other PROs take an active role in the innovation process, or should they leave that role to Industry?

• How can this be done most effectively in Europe?

• Which models of IP-Management are useful?• Why is strategic partnering with Industry so

important?• What can we do to improve it?

Public FundingEducation programs

Donations

IndustrySponsoring

InfrastructureScientists

RESEARCHDiscoveries

INVENTIONS

PROTECTIONIntellectual property

PUBLICATION

PROOF OF PRINCIPLECOLLABORATIVERESEARCH with

INDUSTRY

SCIENCEINCUBATORS

SPIN-OFFS &CAMPUS COMPANIES

SEEDCAPITAL

Public FundingEconomic Programs

EC FP

RESEARCH

INNOVATION

DEVELOPMENT

New ProductsNew Services

LicencesRoyalties

OwnershipOpen Science Model

LicenseModel

Spin-outModel

InteractionModel

Innovation Model

UNIVERSITY

UNIVERSITY+INDUSTRY

INDUSTRY


The Open Science Model

• University (PRO) does not retain any IP rights (no patent applications)

• No need for active IP management• Little incentive to invest in applications of

inventions• Often no direct impact on regional economy• Still the most widespread model in Europe• Innovation rests on Industry• Most inventions from PROs are not turned into

innovations• Responsibility of Inventor for IP


The Licence (linear) ModelThe Licence (linear) Model

• PROs can select to own inventions (and other IPRs), but must diligently protect IP and seek licensees

• Early (Strategic) patenting important because reconciles publication with investment

• Requires professional IP management in PROs• PROs can grant exclusive licences• Widespread in the USA since Bayh Dole Act (1980)• Very successful in the US, in terms of:

– License revenues for PROs and inventors– New products for licensees– New companies created spontaneously

• But does not work so easily in Europe (except U.K.)

300 inventions rejected

50 inventions not licensed

34 licenses produce license issue fees

100 patent applications filed

50 inventions licensed

16 licenses produce income

15 licenses produce < $1M

1 license produces > $1M

Terrence Feuerborn, Former Executive DirectorUniversity of California System, Office of Tech Transfer


What prevents the licence model from working in European Union?

• Ownership of results by PROs missing (IP-laws) or not recognized as good practice in Europe

• Patenting costs are prohibitive (compared to US)

• No grace period in Europe• Non uniform IP laws across Europe• Not enough uptake by European industry• Most licensing deals are with non-European

partners: does not really benefit the European economy


The interaction model

• Builds on the Licence Model and IP management• Proof of principle is made in partnership with industry • Demonstration funded in part by public money

(example EC framework programs)• Fosters innovation as interactive process• Compatible with PROs missions:

– Contributes to Science– PRO can capitalize on foreground– Fair share of returns

• Contributes to regional economy• Starts to works in Europe, but could work much better


The Spin-out ModelThe Spin-out Model

• Also Build on the licence model and IP management• Background technology is used as platform to develop

new business concepts• Proof of principle by the researchers themselves• Development funded by seed capital and funding

(difficult)• Only alternative when no industry partner in sight• Contributes to regional development with labour• Contributes to European and national economy• Slow process: more than 10 years for mature companies• Works in Europe, but not spontaneously (shareholder?)• Often more support and help from PROs necessary


Consolidation: the « Innovation » ModelConsolidation: the « Innovation » Model

• Innovation is not a linear process. It is the “conversion of new knowledge into economic and social benefits – now acknowledged to take place as the result of complex long-term interactions between many players » (Source: Cordis glossary of innovation)

• PROs can contribute effectively to innovation only by the combination of the 3 models:– IP management & licensing as common core– Interaction with industry as a basis for medium term

innovation and development of the economy– Support for creation of new companies as long term

investment and rejuvenation of the economy.


Conclusions for PROs

1. PROs should seriously consider taking a pro-active role in innovation by managing IPR from research.

2. Main objective is maximize benefits for society.3. Returns for PROs are attracting students, retaining

good scientists, funding research. Not an alternative source of funding.

4. Straight licensing is not sufficient. More interaction with industry and creation of spin-outs are necessary

5. Staffing and training professional KTOs is the key.


Why is strategic partnering withIndustry so important?

• Can be the most effective form of knowledge transfer

• Fosters innovation through interaction• Benefits for the regional economy• May bring sizeable benefits (for research

results) in a reasonable time frame• Makes European based companies more

competitive• Interaction is good for industry and science

(new ideas and research topics)


Most common problems

• Ownership of results• Project management and performance • Compensation of indirect costs• Volatility of relationship• Others listed in the workbook with tentative

solutions• Unfair or „bad“ contracts• Danger also from involvement of third parties

(inexperienced technolgy transfer offices)• Unprofessionel/inexperienced PRO-administration


How to develop responsible partnering?

• Understanding and accepting each other’s constraints and objectives and find ways to align interests and create a win-win-situation

• Define mutually acceptable guidelines with representative professional associations

• Implement clear policies at company and PRO level on « responsible » partnering, consistent with such guidelines


Conclusions for Industry and PROs

6. Closer partnering is needed to achieve medium term measurable effects of innovation on the « knowledge economy ». The existing relationship needs be revisited, allowing a more active role of PROs

7. Industry and PROs should adopt and implement by mutual agreement voluntary codes of conduct and guidelines


IP and Technology IP and Technology CommercializationCommercializationin Latvian PROsin Latvian PROs

• Recommendations (3-7) of World Bank report „Creating a 21st Century National Innovation System for a 21st Century Latvian Economy

• Recommendations and pilot activities of RIS Latvija Project (finalized in 2004)

• Partnerships and best practise exchange with other European Regions and Technolgy Transfer (Licensing) Centers/Offices

• Participating in European and Professional Networks (PROTON, ASTP, LES, AUTM)


THE END!THE END!

Thank you for your attention!Paldies!Danke!

For more information:http://europa.eu.int/comm/research/era/ipr_en.html

http://europa.eu.int/comm/research/era/3pcthttp://www.ipr-helpdesk.org

© IMG GmbH, T. Schwing, 2004WB-Seminar 09.06.2004 / Folie 1 IMG Innovations-Management GmbH World...

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