Resolving intellectual property issues increasingly critical
A strong, self-sustaining innovation environment requires a university that can provide allimportant research that leads to new and exciting discoveries.
While Canada boasts many vibrant universities that support research and yield important discoveries, a significant hurdle remains.
That would be the issue of intellectual property (IP) — who owns it, where does it reside and how are the benefits shared.
Capitalizing on Canadian developments will be difficult without thoughtfully and fully addressing the issue. That’s because the way these initiatives are financed has changed significantly since the 1990s when some documents governing IP were drafted.
Many important developments have since occurred at universities, in the corporate world and how the financial community interacts and funds the new ideas and companies that are created as result of research and development. ( What’s in place at the University of Calgary, for example, apparently dates back to 1991).
The U of C says it has recognized the need to update its IP policy, and is taking steps to do so.
Corporations once had robust research and development departments, but those days are long over.
That’s especially true for the oilpatch, where significant resources were devoted to R&D. With the downturn of the 1980s, many labs were downsized significantly if not shuttered entirely, leaving universities to fill the gaps.
For many companies these days, without those research labs, it’s about finding the right university partner.
“As corporations cut down on their internal R&D activities and look to open innovation as an alternative, universities have become an even more essential partner,” stated a research paper published last year by MIT.
“Indeed, companies are now looking to universities to anchor an even broader set of external activities, especially those grounded in engaging with regional innovation ecosystems.”
And, with universities paying the bills for this research, there is no disagreement they should benefit — financially and reputationally — from the undertakings.
“Innovation has changed pretty dramatically since 1991 and everything should be on the table,” said Marty Reed, CEO of Evok Innovations, a Vancouverbased clean tech fund formed through a partnership between the BC Cleantech CEO Alliance, Cenovus Energy and Suncor Energy.
In addition, some of the mechanisms designed to capitalize on the value of the research need to be rethought and restructured.
For example, many Canadian universities have so-called tech transfer offices. But talk to investors interested in supporting university research and they’ll tell you the process takes too long and involves too much uncertainty. Also, what the university may want as an equity stake — in some cases 25 per cent or more — is too high for the economics to make sense.
They cite the University of California at Berkeley, which may take a 2 per cent ownership in a company spun out of its labs. Something is clearly working at Berkeley, where 450 companies that received the backing of venture capital have launched in the past seven years.
Evok’s Reed, a Silicon Valley veteran, said if universities can speed up the process of helping professors and students move forward with their ideas when it comes to dealing with IP issues, companies will more quickly be created and launched from under the university umbrella.
“What has been discovered, what ultimately benefits the university is velocity and volume. The quicker they get companies out, the more companies they get out, the more they are able to attract investors. It becomes a positive feedback loop,” said Reed, who’s involved with Creative Destruction Labs-Rockies at the U of C’s Haskayne School of Business.
“The objective is not to extract as much as possible from any one idea, it’s to create an ecosystem where ideas are flourishing.”
According to Reed, the trend is increasingly for scientists to own the IP, as is in place at Stanford and the University of Waterloo, for example. The university supports the commercialization of the discovery — including helping to fund the cost of obtaining the IP and connecting scientists and investors — but ultimately it doesn’t own the IP.
This allows the individual to access funding without the university overhang. The university may ultimately take an equity position and could yield significant results, as it has at Stanford, MIT and many others.
Some universities don’t take an equity interest on the theory that if the individual or company does really well, as result of getting important support from a particular institution, they will give back to the university in some significant way.
However, many are expected to cover the costs of their research leading to the commercialization stage.
For universities looking to attract big-name talent the ability to own the IP can be a draw. At Stanford, there are 20 Nobel Laureates on staff.
All this points to a radical rethink of what’s in place at our universities, whose goals include becoming centres for innovation and commercialization; elements that are key to long-term economic growth and sustainability.
Word has it this has risen to the top of the university research agenda.
The University of Calgary said Friday that it’s “committed to knowledge mobilization through commercialization and other mechanisms and is also committed to working with scholars and investors on fair dealings involving commercialization of IP.”
Sound policies, clarity and transparency will not only help advance the entrepreneurial and innovation culture, it will also attract companies interested in collaborating with the universities on research and development.
As the MIT paper pointed out, big name corporations — both the established and the disrupters — are increasingly using the universities as important pieces in their “early stage and innovation strategy.”
Alberta has world-class universities. For a province looking to diversify its economy, which includes leveraging its post-secondary institutions, this must be heeded to be competitive in the global arena in which they want — and should — play a larger role.