Commercialising public research: New trends and strategies

1. Commercialising public research: New Trends
and Strategies
Directorate for Science, Technology
and Industry
Daniel Kupka

2. Setting the stage

4. Commercialising public research
• … is important for generating (more) economic growth
and jobs from innovation…
• … and is not easy, as public research and business are
two different worlds, with different motives, rules and
cultures.
• Commercialisation has been at the centre stage of
research policies in OECD countries for 20 to 30 years
now (e.g. OECD (2003), Turning Science into Business)
 What is it about?
 Where are we with it?
 What can we do to foster it?

5. (Simplified) Knowledge transfer and
commercialisation system
Evaluation of Invention
Invention
Disclosure
IP Protection
Patents
Copyrights
Trademarks
Trade Secrets
Public
Research
Results
No
invention
Disclosure
Market
technology
Benefits
Social
Economic
Cultural
Joint Publications
Mobility
Contract research
Facility sharing
Consultancy
Start-ups by students
and graduates
etc.
Environmental factors
Institutional characteristics
Organizational resources
e.g. Country's industry
characteristics, companies
absorptive capacities
e.g. University IP policies,
Norms, research quality,
university culture
e.g. technology transfer
expertise, relationships with
companies
Local and national S&T policies
Researcher incentives/
characteristics
e.g. motivation to
disclose/share research results
and data

6. WHAT DOES THE DATA TELL
US? A SNAPSHOT

7. Invention disclosures relative
stable but slight drop after crisis
Invention disclosures, 2004-2011
Per USD 100m research expenditure
Australia
Canada
Europe
United Kingdom
United States
50
40
30
20
10
0
2004
2005
2006
2007
2008
2009
2010
2011
Source: OECD based on data from Australia’s Department of Innovation, Industry, Science and Research, 2011
and 2012; European Commission, 2012; US Association of University Technology Managers (AUTM), 2008-2012;
Canadian AUTM, 2008-2012; HEFCE, 2009-2012

8. University patenting has increased for the
OECD area in 2001-05, but growth slowed
Patents filed by universities, 2001-2005 and 2006-2010
Patent applications under Patent Cooperation Treaty (PCT) per billion GDP (Constant 2005 USD (PPP))
2006-2010
2001-2005
0.900
0.800
0.700
0.600
Average annual growth rates for OECD area
(absolute numbers)
2001-05: 11.8%
2006-10: 1.3%
0.500
0.400
0.300
0.200
0.100
0.000
1. Patent applicant’s names are allocated to institutional sectors using a methodology developed by Eurostat and Katholieke Universiteit Leuven (KUL). Owing to
the significant variation in names recorded in patent documents, applicants are misallocated to sectors, thereby introducing biases in the resulting indicator. Only
economies having filed for at least 30 patents over the period 2001-2005 or 2006-2010 are included in the Figures.
2. Data broken down by priority date and residence of the applicants, using fractional counts.
3. Hospitals has been excluded.
Source: OECD Patent Database, February 2013.

9. PRI patenting has increased between
2001-2005, but growth turned negative
Patents filed by public research institutes, 2001-2005 and 2006-2010
Patent applications under Patent Cooperation Treaty (PCT) per billion GDP (Constant 2005 USD
(PPP))
2006-2010
2001-2005
0.250
0.200
0.150
Average annual growth rates for OECD area (absolute
numbers)
2001-05: 5.3%
2006-10: -1.5%
0.100
0.050
0.000
1. Patent applicant’s names are allocated to institutional sectors using a methodology developed by Eurostat and Katholieke Universiteit Leuven (KUL). Owing to
the significant variation in names recorded in patent documents, applicants are misallocated to sectors, thereby introducing biases in the resulting indicator. Only
economies having filed for at least 30 patents over the period 2001-2005 or 2006-2010 are included in the Figures.
2. Data broken down by priority date and residence of the applicants, using fractional counts.
3. Hospitals has been excluded.
Source: OECD Patent Database, February 2013.

10. In Europe, revenue from licensing is low
compared to the US and is not increasing
Licensing income, 2004-2011
As a percentage of research expenditures
Source: OECD based on data from Australia’s Department of Innovation, Industry, Science and Research, 2011
and 2012; European Commission, 2012; US Association of University Technology Managers (AUTM), 2008-2012;
Canadian AUTM, 2008-2012; HEFCE, 2009-2012

11. Spin-off creation is higher in Europe, but
little evidence of growth and job effects
Creation of public research spin-offs, 2004-2011
Per USD PPP 100m research expenditure
Source: OECD based on data from Australia’s Department of Innovation, Industry, Science and Research, 2011
and 2012; European Commission, 2012; US Association of University Technology Managers (AUTM), 2008-2012;
Canadian AUTM, 2008-2012; HEFCE, 2009-2012

12. Business-funded R&D in the higher
education sector , 2000-2011
%
Canada
Germany
France
Japan
United Kingdom
18
16
14
12
10
8
6
4
2
0
Source: OECD, Main Science and Technology Indicators (MSTI) Database
United States
Total OECD

13. Business-funded R&D in the
government sector , 2000-2011
%
Canada
Japan
Germany
United Kingdom
14
12
10
8
6
4
2
0
No data for US
Source: OECD, Main Science and Technology Indicators (MSTI) Database
France
Total OECD

14. Co-authored publications can indicate the degree to which
business absorbs or integrates public sector knowledge
Industry-science co-publications, 2006-10
% of industry-science co-publications in total research publication output
Source: Centre for Science and Technology Studies (CWTS), Leiden University, using Web of Science
(WoS) database.

15. Mobility of people important for knowledge
diffusion and industry’s research productivity
Doctorate holders having changed jobs in the last 10 years, 2009 as %
%
Researchers
Non-researchers
90
80
70
60
50
40
30
20
10
0
Source: OECD, Careers of Doctorate Holders Database. www.oecd.org/sti/cdh
Total

16. After decades of reform in Europe and
emulation of Bayh-Dole around the world ...
… commercialisation outputs (at least what we can
measure on a narrow set of indicators) seems to
be levelling off in a number of countries.
• Did we reach an “equilibrium” or a “plateau”, or
have institutional and policy strategies
changed?

17. Some observations…
• Narrow policy focus on 4 elements:
• the natural/physical sciences,
• patenting & licensing,
• faculty inventors;
• little understanding of the broader determinants
(“What should I do with my patents?”)
• Limited evidence and metrics: current metrics
just the tip of the iceberg; those available most
relevant ones?
• Governance and incentives: Do we have right
individual incentives? No integrated national policy
approach?

18. Some observations…
• Mismatch between supply and demand: Firms
not always willing (e.g. high transaction and search
costs, research not relevant or of low quality) or capable of
making use of public research results (e.g. lack of own
absorptive capacity)

19. TRENDS IN STRATEGIES
AND POLICIES

20. A practitioners’ view on the
commercialisation of public research
Legislative and
administrative
reforms
Supporting the
emergence of
entrepreneurial
ideas
Incentives for
collaboration
TTO
Capacities to link with the
external environment
through bridging and
intermediary organisations

21. Legislative initiatives related to
commercialisation and patenting
• Increased autonomy (i.e. University by-laws) allows to
negotiate different IP arrangements
• Encouraging industry engagement through granting “free”
of charge licenses on IP rights
– e.g. Easy Access Innovation Partnership (Glasgow, Bristol and
King’s College London), University of New South Wales and CERN
• Legislative and administrative procedures targeting
research personnel and faculty
– Patents and commercialisation in tenure and promotion decisions
in some US and Canadian universities (16 of 64)
– “Student ownership” - University of Missouri

22. Legislative initiatives related to
commercialisation and patenting (2)
• “Grace Period”: trend towards expanding grace periods
– Japan (2012): broader scope to include sales, any
exhibitions, press releases, and broadcasting
– Korea (2012): prolonged from six to 12 months
• European Commission’s Recommendation on the
management of IP and Code of Practice for universities
and other PRIs
– Set of general principles and minimum standards for the
management of IP and good practice principles for collaborative
and contract research
– June 2012: Guidelines on the management of IP in international
research collaborations

23. Intermediaries and bridging institutions
• Technology Transfer Offices (TTOs) have expanded their missions
• Convergence across countries towards a common set of
organisational and financial models
• New bridging and intermediation structures
– e.g. Innovation offices programme in Sweden
• Replacing or improving TTO structures
– Technology Transfer Alliances (e.g. Innovation Transfer Network
(ITN) in the US, SATT in France, cTTO in Ireland, Regional Patent
Agencies (RPAs) in Germany)
– For-profit models
– Internet-based models (e.g. Flintbox at University of British
Columbia, “iBridge network”)
– Free Agency model (theoretical)

24. Collaborative IP tools and funds
• Easing access to patent portfolios for start-ups and SMEs –
issue of “sleeping” patents
– e.g. US DOEs Next Top Innovator, France´s CNRS PR2 – Enhanced
Partnership SME Research
• IP sharing agreements
– e.g. UK’s Lambert Toolkit, Germany´s Model R&D cooperative
Agreements, Denmark´s Schlüter model Agreements
• Patent funds for SMEs and PROs
– e.g. Japan’s Life Sciences IP Platform Fund, France’s
Brevets, Korea’s IP cube partners, discussions for an “European
Patent Fund”

25. Promoting Openness in Science
• Requirement to publish in digital format
– National: e.g. Spain (2011 Science, Technology and Innovation
Law), New Zealand, US, Estonia)
– Institutional: e.g. US National Institutes of Health (NIH), Canadian
Institutes of Health Research (CIHR)

26. Spain: 2011 Science, Technology and Innovation Law, art. 37
The research staff whose research activity is financed largely with
funds from the State Budget will issue a digital version of the final
version of the contents which have been accepted for publication in
research journals or periodicals serial as soon as possible but not later
than twelve months after the official date of publication.

27. Promoting Openness in Science
• Requirement to publish in digital format
– Institutional: e.g. US National Institutes of Health (NIH), Canadian
Institutes of Health Research (CIHR)
– National: e.g. Spain (2011 Science, Technology and Innovation
Law), New Zealand, US, Estonia)
• Building knowledge repositories
– e.g. EC: Digital Repository Infrastructure Vision for European
Research (DRIVER), Open Access Infrastructure for Research in
Europe (OpenAIRE), etc.
• New co-operative models
– e.g. Lund University, the National Library of Sweden and Nordbib
to adopt online guides to open access journals publishing

28. Supporting the emergence of
entrepreneurial ideas form public research
Financing tools for different stages of research commercialisation

29. Supporting the emergence of
entrepreneurial ideas form public research
Financing (national level)
• Rise in specific financial schemes
– Public support shifted from seed funding to the proof-of-concept
(PoC) stage and funding for prototype development
Financing (institutional level)
• Setting up of own PoC and seed funds
– In Europe, 73 university and PRIs oriented seed funds and
48 PoC funds
– Wide heterogeneity in terms of how they function, governance
and business models
– Some funds also share features with private-sector patent and IP
funds (e.g. Karolinska Development Fund)

30. Source: European Investment Fund Presentation, April 2013

31. Supporting the emergence of entrepreneurial
ideas form public research (2)
• Lessening the burdens for spin-offs to license-in
university technology
– equity shares or shares of future revenues; Patent assistance
programmes
• Crowd funding – hype or reality?
– University of Utah’s TTO entered in 2013 an exclusive agreement
with crowdfunding platform RocketHub
• Corporate venturing (joint venturing, acquisitions and
corporate venture capital (CVC))
– Recent years have seen an increase in corporate venturing
activities
– e.g. Qualcomm’s IP investment programme

32. Qualcomm’s IP investment programme
Source: Qualcomm Presentation

33. IMPLICATIONS AND
CHALLENGES

34. Implications and Challenges:
National S&T Policy
• Tailoring national policies or strategies is inherently
complex
• Policy goals will differ according to countries’ public
research environments
– Academic excellence and commercial success are mutually
reinforcing (“A rising tide lifts all boats”)
– Countries on the research frontier may be most interested to
increase firms’ absorptive capacity, while those further behind
the research frontier may seek to reduce undesirable duplication
of investment

35. Implications and Challenges:
National S&T Policy (2)
• The major channel for knowledge transfer remains the
placement of students
• Those who generate ideas and inventions (i.e. from
professors to students), have relevant incentives
• Change in incentive structures with agencies and ministries in
charge of academic incentives
• Government oversight of academic incentives could help here to
remedy imbalances and conflicts

36. Implications and Challenges:
Management of Universities and PRIs
• Allow the potential for commercialisation while retaining
the fundamental integrity of the research apparatus
– Few universities give a clear policy mandate to innovation, IP
and entrepreneurial strategies
– Top-performing institutions are already learning how to operate
broad commercial activities without undermining the integrity of
core commitments (research and education)
• Attempt (and experiment) to organise relationships with
industry in new ways
• Collaborative and contractual research and professional
services are financially more important than patent
licensing
– they ensure also that needs of industry are well integrated in the
research agenda of the university

37. Implications and Challenges:
Management of Universities and PRIs (2)
• IP is still the foundation (“grammar”) on which new
forms of transfer and exchange are happening
– How to implement strategies and policies that recognise
different pathways and to link teaching, research and
commercialisation without creating undue burdens to the
research apparatus?
– Patents and commercialisation in tenure and promotion
decisions?
• Rise of open access publishing
– shifting of costs from the reader to the author and institution ->
undesirable esp. for smaller universities with high proportion of
publishing researchers
– How does it affect negotiations with industry?

38. Implications and Challenges:
Management of Universities and PRIs (3)
• IF NOT (enough) research activity and quality, a TTO is
NOT necessary
• Alternative solutions:
– Joint TTO services
– Technical support services offered by govt. institutions
and TTO Networks
– Private counseling

39. Implications and Challenges:
Management of Universities and PRIs (4)
• Students and alumni are usually better entrepreneurs
than professional researchers: need to develop an
entrepreneurial spirit among students
– Institutional co-financed student clubs?
• How to create a eco-system for student and academic
entrepreneurs when favourable local conditions are not
present?
– Smart programme design?
– Creating “Centres of Excellence” for certain disciplines to attract
talent, industry and star scientists (and hence capital)?
• Where do get the funding (e.g. POC funds) in times of
increased competition and diminished research funding?

40. Implications and challenges: TTOs
• Alternative models of technology transfer the road to
heaven? No one-size-fits-all
– Emulating national “best practice” models usually backfire
• Given tightening budgets, will we see an increased
consolidation of TTO services towards hub-and spoke
and for-profit models?
• Focus of TTOs on generating income through licensing:
Certain universities (in the US) have adopted aggressive
strategies vis-à-vis business (“troll-like”)
– With dubious social return; business can retaliate, reducing
overall impact (e.g. student placement, contract research)
– A risk elsewhere? Denmark: Science Ventures are for-profit.
France: The SATT should generate positive net-income in ten
years time

41. Tech company stopped graduate
recruitment following patent infringement
Source: www.patentlyo.com

42. Implications and Challenges:
Researchers
• Encourage to disclose research results that can be
accessed, used and reused by future researchers as well as by
TTOs and industry
• Designing incentives to encourage data and invention
disclosure is a difficult undertaking
– Policy makers, agencies and TTOs need to take into
account a range of variables and interests
– Monetary incentives to researchers entail also risks!
• How to create a more explicit link between the effort that is
required to manage and share data and research results and
career recognition and rewards?
• no standard for the citation of data

43. Thank you!
daniel.kupka@oecd.org
www.oecd.org/sti/innovation