1. European Business & Innovation Centre Network
Innovation Management Trends of
PROs
András Haszonits
Amman, 16 May 2010
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2. Agenda
• Evolution of IPR management models of PROs
• Global tech-transfer figures
• IPR Ownership questions
• Spin-outs
• Setting up a TTO
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3. European Business & Innovation Centre Network
1. Evolution of IPR Management
Models of PROs
András Haszonits
Amman, 16 May 2010
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4. PRO Models of Innovation Management
• Open science model
• Licensing Model
• Innovation model
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5. Open Science Model
Traditional setup
No IPR – Nothing left to manage
Publication ASAP
– No IPR to manage, public domain
• Contract research
– IPR acquired by industry (patent)
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6. Licensing Model
Roots in the US 80’s
Before: Invensions resulting from university research
(public finance) belonged to the state. US government
policy is to issue non-exclusive license.
Consequences:
• Researchers/PROs not motivated to apply for patents
• No willingness from industry to take non-exclusive
license from government
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7. Licensing Model
Then came Bayh-Dole Act
Main features:
• Universities are titled for invention (if they want to)
• If so, 2 obligations arise:
– Obligation to file patent
– Excercising effort to find licensee
– Obligation to share royalty with inventor
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8. Licensing Model
Then came Bayh-Dole Act
Main features:
• Government is granted free, non-exclusive license but
just for government procurement purposes
• Government retaining right for intervention and
commercialization if licensee fails
• In case of exclusive license, licensor must manufacture
within the USA
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9. Licensing Model
Effect of the Bayh-Dole Act
• Most US PROs have opened TTO, with main activity:
– Invention disclosure
– IP protection
– Licensing
• Increased patenting activity
• Higher number of formulation of start-ups
• More product developed based on university research
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10. Innovation Model
2 major alternatives:
• 1. Collaborative research with industry
In exchange for beneficial license option on
university’s background technology/knowledge,
industry partner funds research aiming
commercialisable product.
Often with public development grants.
CRADA serves as basis.
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11. Innovation Model
2 major alternatives:
• 2. Spin-out creation
Technology offered with favourable conditions for
share in the company and/or royalty
Need to invite enterpreneurs and seed-capital
First years of operation devoted to prove
technical feasibility and market potential
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12. Requirements on TTOs
Requirements set on PRO/TTOs (especially spin-outs):
• next to patenting, and licensing,
• business development,
• enterpreneurship,
• coaching,
• industry experience
• seed capital attraction competences,
• etc
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13. European Business & Innovation Centre Network
2. Global Tech-transfer Figures
András Haszonits
Amman, 16 May 2010
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14. Share of R&D Expenditures by Innovation Phases
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15. European R&D in context: Facts and Figures
Total Patents granted by the EPO per 1 mln Euro spent on R&D in 2004
0,250
Euro 4 mln+ of
GERD
per patent
0,200
0,150
Euro 10 mln+
of GERD
per patent
0,100
0,050
0,000
Finland
Japan
Spain
Poland
EU-15
EU-25
EU-27
Estonia
Bulgaria
Portugal
Lithuania
France
Hungary
Slovakia
Romania
Switzerland
Netherlands
United Kingdom
Slovenia
United States
Czech Republic
Turkey
Germany
Source: Eurostat, EPO
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16. University Patenting US
Source: The Knowledge Production Function for University Patenting
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17. Patenting US
Source: U.S.-Based Global Intellectual Property Creation
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18. University Patenting US
Source: U.S.-Based Global Intellectual Property Creation
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19. Results of University R+D US
Source: AUTM U.S. Licensing Survey
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20. Results of University Licensing US
Percentage of the patent portfolio being licensed-out:
Share of patent portfolio licensed-out
Univ (ASTP)
PRO (ASTP)
Number Univ (not ASTP)
of tech Other Research
transfer Institutes
institutes (not ASTP)
Percentage of patent portfolio licensed-out
Source: Final results of the ASTP Survey for Fiscal Year 2007, 2008.
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21. Univerity IPR Management Results EU / US
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22. Global Ranking of Universities and Their Patenting
Source:
AUTM U.S. Licensing Survey
Academic Ranking of Word Universities 2006
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23. University patenting EU
in Europe only 3% of 2005 filings come from universities
Source: Applicant panel Survey 2005
http://www.european-patent-office.org/aps/2005/epoapplicant2005.pdf
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24. European Business & Innovation Centre Network
3. Ownership of IPR
András Haszonits
Amman, 16 May 2010
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25. Ownership of IPR
Main issues to deal with for TTOs:
• Ownership of research results (IPR)
– Governed by:
• Employment related IP regulations
• Government research / fund regulations
• Univ-Industry contract
– Problems:
• Non-payroll (contractual or funded) researchers
• PhDs, students
• Professor’s privilege (in EU: I, S, F, N)
• „Rebell” payroll researchers
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26. Ownership of IPR
Main issues to deal with for TTOs:
• Ownership of research results (IPR)
– Recommendations:
• Payroll researchers: „University IP Policy” +
Extension of employment contract
(conditions as of Bayh-Dole Act)
• Visiting scientists, research grant scientists:
Written aggreement before joining research
– IPR assigned to PRO
– Profit sharing scheme for successful
exploitation
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27. Ownership of IPR – Industry Sponsored Research
Main issues to deal with for TTOs:
• Ownership of research results (IPR)
– Industry sponsored research:
• US practice:
IPR by PRO, Industry free non-exclusive license,
exclusive license under fair compensation
• EU practice:
Industry fights for IPR, and right of first refusal
Problem: PROs are supposed to own IPR.
Resolution: contractual transfer of IPR to industry
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28. Ownership of IPR – Joint Ownership
Main issues to deal with for TTOs:
• Ownership of research results (IPR)
– Join ownership? – AVOID in EC!
• EC: joint owner can utilize IPR own its own, but
can not assign license to 3rd party without
consent of all joint owners!
Industry can exploit himself, but PRO is banned
from commercialisation (license)
• US: joint owner can utilize on its own, and grant
non-exclusive license. Consent is required just
for exclusive license
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29. Ownership of IPR – Joint Ownership
Main issues to deal with for TTOs:
• Ownership of research results (IPR)
– Join ownership? – Recommendation for EC
• Agreement stipulating:
– joint owners to be allowed to use / grant of
non-exclusive license provided that first
option for industrial co-owners have been
refused
– exclusive use by one/more co-owner requires
consent of all joint owner,
compensation to be paid
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30. Education
Main issues to deal with for TTOs:
• IPR Awareness Culture Raising
– Prior review of planned publication
– Invention disclosure regime
• Review of draft manuscripts / interviewing
• Lab-note culture
– Discovery of commercialable inventions
– Enables opinioning on seeking IPR protection
– Base for detirmining inventorship
– Formal date of invention under US patent law
– Respect IPR of third parties
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31. European Business & Innovation Centre Network
4. Spinning-out
András Haszonits
Amman, 16 May 2010
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32. Spin-outs – Why?
Inventions of PRO are far from marketable application!
Tech transfer to industry usually takes place not on
favourable conditions to PRO.
Spin-out is a realistic alternative
– Externalize development from PRO not fitting to its mission
– New funds become available: obtain development fund not
available for pure research for financing cost of development
– Participate in FP programs as industrial partners (with PRO)
– New opportunity for researchers with enterpreneurial spirit
– Retain researchers: know-how is hard to license-out on attractive
terms, thus researchers with such know-how do not have to
leave to industry
– Capital gain on spinout equity is potentially larger than on license
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33. Spin-outs – Key to Success
Sucess factors for Spin-outs
• Key enterpreneurs (management), enterpreneurial spirit
• Ongoing support from mother-PRO
• Pre-seed / Seed capital, development loans
• Expertise in tech transfer and investment acquisition
• Coaching in technology incubators
• Further education and enterpreneurial training for
management
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34. Spin-outs – PRO Support
Support required from PRO
• Communication that creation of spin-outs is a policy
objective of PRO
• Fostering spirit of enterprise in scientific community
• Encouraging by supportive measures (e.g. part-time
release) scientists to be involved in spin-out
• Providing access to technology of PRO
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35. Spin-outs – Capital Need
Capital requirement
• Pre-seed capital: 2 – 3 years
– to cover:
• market analysis,
• competitive analysis
• secure access to IP
• freedom of operation
• additional team members
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36. Spin-outs – Capital Need
Capital requirement
• Seed capital: 2 (ICT) – 5+ (biotech, pharma) years
– USD 300.000 – 6.000.000+
– Business Angels
(too much for founders, too small for venture capital)
– Development grants (from EC through local government)
50-80% of development cost, has to be paid back if
commercialization succesful
– Bridge funding from proof-of-principle to break-even
Spin-out reach self-sustaining phase
• Then comes Venture capital, and after 3-5 years IPO
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37. Thank you very much for your attention
András Haszonits
haszonitsandras@upcmail.hu
The training material is to be
used exclusively in conjunction
to the SRTD project in Jordan
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