Archives
News
Submission on technology transfer and commercialisation at institutions of higher education
2 May 2008
Prepared for the Standing Committee on Industry, Science and Technology
The Innovation Partnership (TIP) appreciates the opportunity to address the Standing Committee on Industry, Science and Technology on the topic of technology transfer at institutions of higher education. TIP is an independent, not-for-profit organization located in Montreal, Canada. TIP’s mission is to enhance understanding, use and management of intellectual property policies that foster innovation, improve research capacity and increase access to new products. In the last year, TIP has provided policy advice on the use of intellectual property policies and dissemination of innovation to Health Canada, Industry Canada, UNITAID, the Organization for Economic Cooperation and Development and the Canadian Breast Cancer Foundation. TIP works closely with the Centre for Intellectual Property Policy (CIPP) at McGill University to translate cutting-edge social science and legal research into concrete policy.
The federal May 2007 Science and Technology Strategy emphasises the transfer of technology developed at Canadian institutions of higher education to the private sector. TIP has completed two studies for the government on technology transfer and, with the CIPP, has organized two expert workshops on technology transfer involving industry, the university sector and government. Drawing on this work, we highlight four actions that would enhance Canadian policy on technology transfer:
- The government should encourage the development of metrics to assess the contribution of technology transfer to education, regional economic growth, investment in infrastructure, the creation of collaborative research opportunities, the attractiveness of Canada as a location for investment, and the accessibility of technology to underdeveloped Canadian communities and developing countries;
- The government should renegotiate the Framework of Agreed Principles on Federally Funded University Research with the Association of Universities and Colleges of Canada to use the above metrics, rather than the current metric of revenue generated by licensing and the creation of spin-offs;
- Federal granting agencies including CIHR, Genome Canada, NSERC and SSHRC should promulgate best practice guidelines that encourage the broad dissemination of the results of publicly-funded research including the OECD Guidelines on the licensing of genetic inventions and that encourage researchers to enter into intellectual property agreements prior to conducting research; and
- Fund the development of business models that highlight the role of public-private partnerships in the areas of health, agriculture and information technology.
1. The need for better metrics
Our research and interviews with technology transfer office directors clearly indicates that the way that government and universities assess the performance of technology transfer – number of patent applications, number of licences, licensing revenue and number of spin-offs – is not only inadequate to encourage technology transfer but inhibits it. The simple fact is that most universities lose money on patenting and transferring technology to the private sector not only in Canada but in the United States. Although technology transfer officers recognize the inadequacy of the current measures, given the way their units are assessed, they have no choice but to try to identify those technologies that are most likely to provide a short term financial return to the university rather than those that may enable a suite of innovation over the longer term. This frustrates not only technology transfer officers, but their private sector partners who are routinely asked to make up-front payments in order to satisfy current metrics.
An increasing body of research indicates that technology transfer is far less effective at generating revenue than at increasing the capacity of university generated ideas to motivate innovation broadly and enhance the general economic environment of their home regions. Further, concentrating on economic returns to the university fails to enable universities to fulfill their primary missions of education and knowledge generation through the conduct of research and open inquiry. A longer term, more collaborative approach to technology transfer is needed.
Therefore, it is critical that universities and the governments who fund them and their activities agree on a set of measures that more accurately reflects both the mission and potential impact of universities on their communities. Such metrics would assess, in a more comprehensive and balanced way, a) the various channels by which universities share knowledge with potential partners in the public and/or private sector, b) efforts made to broadly disseminate foundational scientific discoveries, and c) the contribution of private sector funding to student education, such as financial support to students, and to university laboratories and buildings. They would also measure the impact of technology transfer activities on publications and the attractiveness of the university’s city or region to outside investors and highly-skilled workers.
Through direct funding and through research councils, the federal government can encourage the development of better metrics that coincide with the potential impact that technology transfer activities can hope to attain. The University of British Columbia has been a leader in measuring not only direct financial benefit to the university, but broader educational, social and economic returns to communities and developing countries.
2. Renegotiate the Framework of Agreed Principles on Federally Funded University Research
The Framework of Agreed Principles on Federally Funded University Research between the Canadian Government and the Association of Universities and Colleges of Canada calls for institutions of higher education to triple commercialisation performance measured as “the sum of income from intellectual property, cash dividends received by institutions and equity holdings, options and warrants cashed in by institutions, as measured by Statistics Canada.”
Given the inadequacy of metrics based on direct financial return to institutions of higher education for technology transfer, the Framework is in serious need of revision. Governments should link their financial support of universities and colleges not to financial return from technology transfer, but to the broader set of measures discussed above.
3. Promulgate best practice guidelines
Research and experience increasingly demonstrate the importance of collaboration between institutions in the public and private sector to encourage research and development. Key to such collaborations is the dissemination of early-stage knowledge between actors. Too often, however, entities in both the public and private sectors tend to hoard knowledge in the mistaken hope that they will develop the next blockbuster drug or product. This strategy has been a failure. Those industries that share knowledge and collaborate are more likely to develop significant new products and markets than those that hoard. In the pharmaceutical field, the falling number of new chemical entities worldwide and their falling quality illustrate this too well. So much so that the heads of major pharmaceutical companies have declared their business model dead and are actively examining how to collaborate more and better with the public sector.
In order for Canadian institutions of higher education to benefit from the development of international best practices that seek to share, rather than hoard, knowledge, Canadian research councils should develop strong guidelines and encouragement to those individuals and institutions receiving grants to seek to disseminate the results of publicly-funded research as broadly as possible. Sometimes this will be achieved through simple publication, sometimes through obtaining a patent and broadly licensing the invention and sometimes through a patent and a series of limited exclusive licences. Research and institutional performance on research grants should be evaluated, in part, on the success of universities and colleges to demonstrate effective, if not also broad dissemination.
When commercialization is a goal of the research, best practice guidelines need to also address the importance of entering into clear intellectual property agreements prior to the commencement of research. Contrary to what is sometimes suggested by technology transfer officials, empirical evidence shows that it is not important, as between institutions of higher education and researchers, who – whether the inventor(s) or the institution(s) – has formal ownership of the intellectual property. Rather, what is critical in the current environment in which different public and private-sector partners collaborate on research is that all parties enter into an agreement prior to the commencement of research that sets which person or institution has the power to sign a licence agreement. Doing so can radically reduce transaction costs associated with subsequent efforts to commercialize technologies resulting from the research, and give greater certainty to private sector partners.
4. Development of business models
In order to take advantage of collaboration, new ways of structuring relationships between institutions of higher education and the private sector are needed. Industry has been slow to develop these structures, largely because of their limited resources. Canada can become a world-leader in facilitating public-private partnerships by investing in the development of new business models that are predicated on smarter management of intellectual property assets. Such public-private partnerships offer a vehicle to harness Canada’s strengths in order to pursue commercialization goals, including rich sources of clinical data from our healthcare system. Because of the importance of public-private partnerships to Canada, TIP is developing new models for such partnerships.
TIP is dedicated to assisting Canadian policy-makers adapt intellectual property systems to Canada’s innovation goals. Based on our experience and knowledge, we believe that the above measures will enhance Canada’s ability to capture the social and economic benefits of research conducted at institutions of higher learning. We would be pleased to assist the Committee in any way possible during its deliberations on this issue.