Disputes involving commercial funding, intellectual property
Objectives of this strand of the project are:
- to provide a reference list of key recent documents
- to invite contributions from HEIs to help us create a simple list of good practice principles.
- to list examples of the ways in which things can go wrong.
I Key recent policy documents likely to generate new areas of dispute involving HEIs
The Leitch Report
Leitch Review of Skills, Prosperity for all in the global economy - world class skills, was published in December 2006.
http://www.hm-treasury.gov.uk/independent_reviews/leitch_review/...
The Leitch Report discusses 'skills training' in higher education, making an explicit link with the 'Lambert Review' of' the UK’s HE system' (2003) with particular reference to 'the employability of UK graduates as well as the different drivers that influence the relationship between business and HE'.
Specifically, as Leitch summarizes it, the Lambert Review found that:
- 'there is a mismatch between the needs of industry and the courses put on by universities in a particular area; and
- businesses find it difficult to engage with universities to enter a strategic dialogue about skills requirements. This built on widespread employer concerns about the job readiness of graduates in the UK.'
Leitch supports the recommendations of the Lambert Review that the:
'Government should ensure that Sector Skills Councils have real influence over university courses and curricula. Otherwise, they will fail to have an impact on addressing employers’ needs for undergraduates and postgraduates'
Certain 'public goods' are put forward, for example to:
- 'increase co- funded workplace degrees [co-funded with business]'
- 'improve engagement between employers and universities'
Leitch also argues for 'refocusing HE courses and institutions' so as to 'influence the direction of HE', towards a 'focus on workforce development' and 'away from a sole focus on participation in HE by young people':
'This change will radically alter the incentives facing HE institutions, encouraging them to work with businesses in a way that they have not done to date. It is this change to incentives, rather than specific initiatives, which will drive the change in behaviour the Review has concluded is needed.'
Direct intervention is proposed in the appointment of senior academics:
' Improving the quality and quantity of senior research staff in higher education through employer collaboration and investment will facilitate greater levels of knowledge transfer, innovation and dialogue between leading employers and leading academic specialists in universities', by ensuring that the research 'rewarded' in future would be the kind which works with business and industry and leads to employment opportunities.
In all these areas HEIs will need to take careful thought in identifying good practice principles.
The Sainsbury Report
The Sainsbury Report, A Review of Government’s Science and Innovation Policies,
appeared in October 2007.
http://www.hm-treasury.gov.uk/independent_reviews/sainsbury_review/...
The Sainsbury Report appeared in October 2007. At its launch HEFCE's Chief Executive welcomed it in the following terms:
"David Eastwood said:'I am delighted that the Sainsbury Review gives such a glowing commendation to the contribution that the whole higher education sector is making to the competitiveness of the nation. It also clearly endorses the long-term approach that the Council has taken toward engagement with business and the community. "
HEFCE has also announced that, as Sainsbury recommends, the allocation of funding from the Higher Education Innovation Fund will in future be 'fully formulaic':
'this consolidates HEIF as a permanent third stream of funding to the HE sector and reflects the increasing esteem given to knowledge transfer and engagement with the economy and society.'
Sainsbury distinguishes between:
'research universities focusing on curiosity-driven research, teaching and knowledge transfer, and business-facing universities focusing on the equally important economic mission of professional teaching, user-driven research, and problem- solving with local and regional companies' (2.83).
'Business-facing universities' are to be encouraged by financial incentives from HEFCE:
'to undertake more knowledge transfer, as we see a major economic opportunity for them to do so. These incentives cover the use of extra Higher Education Innovation Funds and an increased number of Knowledge Transfer Partnerships' (2.85 ), concentrating on links with local businesses. There are to be ' high-technology clusters around world-class research universities'.
There is to be direct policy control of research funding by the state, and also of the content of teaching. The thrust of the Sainsbury Report is the proposal to integrate both the education of scientists and engineers and the conduct of research in a complex of 'inter-linked activities' and unify 'the fragmented technology and innovation landscape in the UK'.
To this end it is proposed that the transformation of the Technology Strategy Board into a 'business-driven Executive Non-Departmental Public Body', which took place in July 2007 ( Sainsbury Chapter 3), should lead to its having:
'a new leadership role, working with the RDAs [Regional Development Agencies], the Research Councils, government departments and the economic regulators to co-ordinate public sector technological innovation activity, leverage public sector resources and simplify access to funds for business.
The reach of the TSB is to extend and it is to be given additional resources:
With increased resources the TSB should extend into new areas, such as the services sectors (including the creative industries) in which technological innovation is important. 'It should develop an international strategy, and it should work more closely with UK Trade and Industry (UKTI) to enhance the UK’s position as a centre for investment by world-leading companies.'
In Government Departments:
'Chief Scientific Advisors should work more effectively with their departments and with the Treasury spending teams to agree and manage their R&D budgets, and together to identify and act on cross-cutting areas of research.
This is all to be set in the context of a comprehensive redefinition of the purpose of a university:
'Today, we are seeing a transformation in the purpose and self-image of universities. Politicians, industrialists and economists are beginning to see universities as major agents of economic growth as well as creators of knowledge, developers of young minds and transmitters of culture. The change in the purpose and self-image of the university has been driven by the concept of the knowledge economy, an economy in which ideas and the ability to manipulate them are of more importance that than? the traditional factors of production. In this economy, a world-class university looks an increasingly useful asset' (Sainsbury, 2.81).
II Key recent documents and emerging problem areas
A. STARTING COLLABORATIVE RESEARCH: FUNDING CONTRACTS
Streamlining University / Business Collaborative Research Negotiations: An Independent Report to the “Funders’ Forum” of the Department for Innovation Universities and Skills, August 2007.
Introduction by Keith O'Nions, Chair of the Research Base Funders Forum
http://www.dius.gov.uk/publications/streamlining-august07.pdf
'Following a meeting of the Funders’ Forum in January 2007, the Director General of Research Councils invited a group of senior business people and university leaders to look at the issue of negotiating collaborative research agreements between universities and companies. The Group was asked “What are the remaining obstacles to more streamlined negotiations between universities and businesses at the outset of research collaborations?'
Public policy questions were not part of the group's brief nor were the arrangements relating to spin-outs from research which had been done solely with the aid of research council funding.
' the Group was specifically not asked to cover the wider question of how to encourage more interest in / demand for collaborative research in the first place (which would stray into issues eg of how universities should market themselves and how to stimulate the ‘demand-side’);
- and we were not asked to cover negotiations over intellectual property that has arisen from wholly publicly funded research (‘classic commercialisation’ through licensing and spinouts).
Several potential areas of dispute emerged:
'Three problem-areas were identified:
1. Overemphasis on IP. It is important that adequate protection is made for Intellectual Property, but we feel that both universities and businesses are guilty on occasions of putting excessive emphasis on ensuring their own ideal outcome from the negotiation in relation to IP, when it is often not even the most important aspect of the research collaboration.
2. Unclear messages. There is still a lack of clarity over some important high level
messages coming both from Government and public funders. For example, there is confusion as to whether the primary aim of collaborative research should be to generate income for universities or to create benefit for the wider economy; and it is not always clear what public research funders expect to see as an appropriate outcome in relation to IP.
3. Need for good practice in negotiating process. We have identified a number of aspects of good practice in the process of negotiations, such as understanding the motivations of the other party and having appropriate escalation procedures. Whilst some of these are commonly recognised practices that are self-evidently sensible, it is clear that they are often not followed.
The group gives guidance on principles to be followed in negotiation of contracts and dangers to be avoided at:
(3.5) Approach to negotiations
We heard evidence of good and bad practice in the way that both sides approach negotiations.
This can be summarised in the following four areas:
- entrenched positions
- understanding the other side
- creativity / flexibility
- escalation and decision making
This guidance is developed in the main text of the report and also in Annex B.
The group calls for the development of an institutional strategy:
(3.3) Clear Institutional Strategy
Whatever the official position of Government and funders may be, the senior management of each University will have its own particular strategy in relation to collaborative research with businesses and other research institutions. It is this strategy that will tend to feed through to those negotiating with companies and those taking the final decisions on contracts.
The group identified a series of good practice principles:
'Government and Public Funders
1. Government should make a clear statement of policy that the primary objective of
their support for university / business interaction is to improve the knowledge base and increase the economic impact of research, rather than generating extra funding for universities
2. Research Councils should ensure there is clear and well publicised guidance on the
handling of IP in collaborative research which they co-sponsor – ideally this should be coordinated through RCUK to ensure consistency.
3. Likewise, other public funders of research such as Government Departments should
give clear guidance on the purpose of their contribution to collaborative projects and
expectations in relation to IP.
4. Government and public funders should make a statement of clarification, reminding Universities that the advent of Full Economic Costing does not require them to charge 100% FEC on individual contracts with business – rather the price charged is their own strategic decision, so long as overall sustainability of research is appropriately factored in.
Universities
5. Senior management in each university should issue clear policy statements setting
out their aims for collaborative research relationships with industry, so that there are clear messages to academic staff and those staff negotiating on their behalf. This should ideally be endorsed by the University’s appropriate Governing body.
6. University senior management should encourage a balanced approach to IP negotiations, recognising the benefits of the business relationship and the relative improbability that any individual piece of IP will ultimately turn out to be a ‘blockbuster’.
7. University senior management should check that their own internal targets and
metrics do not inadvertently drive the wrong type of behaviour in negotiations on
collaborative research
8. University senior management should ensure there is clarity over the balance
between facilitator and gatekeeper roles for Research Contract Offices (including where the decision making lies).
Universities and Business
9. Both universities and businesses should review the approach their organisation
takes on negotiations and consider whether it could be improved, in line with good practice. They should also ensure that there is sufficient senior management visibility of contracts, clear direction on desired outcomes, appropriate escalation procedures, and that decisions are taken at the right level, so that strategic considerations can be taken into account.
Business
10. Businesses should ensure that commercial officers, perhaps more used to the cut- and-thrust of supplier/customer negotiations, are attuned to the sensitivities of university research and the benefits of long-term research relationships.
Other
11. Knowledge transfer bodies such as AURIL, UNICO/PRAXIS and particularly IKT should consider what further role they could play in developing and promoting good practice to improve the quality of negotiations.
B. INTELLECTUAL PROPERTY DISPUTES
Intellectual property disputes are likely to emerge as issues of principle at an early stage of the setting-up of a research collaboration between academic researchers and industrial funders.
This was noted in the Lambert Review of University Business Collaboration of 2003 http://www.hm-treasury.gov.uk/consultations_and_legislation/lambert... as the 'Streamlining' Report observes:
“A number of businesses also comment that some universities overvalue their IP. This has stopped several businesses agreeing deals with universities”
In addition, the Lambert Report recommended that template model agreements be established to facilitate negotiations. This recommendation was implemented, and the resulting agreements, known as the Lambert Model Agreements, have been used (on a voluntary basis) by a number of universities and firms.
[For the Lambert Model Agreements, see: http://www.innovation.gov.uk/lambertagreements/]
'Streamlining' identifies areas of ambiguity in Research Councils' rules on ownership of intellectual property and calls for clarification of the principles which should obtain in collaborations with industrial funders.
'Streamlining' adds:
'Indeed, we found that this is a ‘hot topic’ in other countries as well. The European Commission’s recent Green Paper on the European Research Area noted that: “European universities and other public research institutions should be given incentives to develop skills and resources to collaborate effectively with business and other stakeholders, both within and across borders. A major hindrance is the inconsistent, and often inadequate, rules and approaches for managing intellectual property rights (IPR) resulting from public funding.”
[NOTE: The European Research Area: New Perspectives, COM(2007) 161 final, 4/4/2007. IP issues are also covered in more detail in? the Commission staff document: Voluntary guidelines for universities and other research institutions to improve their links with industry across Europe’ COM(2007) 182 final]
C. PROTECTING THE INTERESTS OF RESEARCH STUDENTS IN COLLABORATIVELY-FUNDED RESEARCH PROJECTS
Research students holding doctoral studentships within collaboratively-funded research projects may be exposed to the danger of disputes affecting the completion and examination of their theses:
- If research students are to be treated equally with others at the institution, confidentiality and patenting agreements in the funding contract must allow doctoral students to have their theses examined when they are completed and to publish and discuss their work at conferences.
- The implications of intellectual property clauses in the student contract should be explained to students and their right not to accept such clauses respected. Such clauses should not attempt to allow the HEI to take control of the student's intellectual property beyond the end of the course.
D. WORKING WITH EXISTING BUSINESSES AND LAUNCHING SPIN-OUTS
'Streamlining' identifies a number of difficulties and disputes leading to delays.
Recent anonymised case:
FB build up a large and successful research group within an HEI, developing a device which showed considerable promise for spin-out purposes. Possible commercial collaborators and funders showed an interest. It was proposed that the academic research team should make 'knowledge' available for commercial R and D and some of the profits should come back to the team. A company was set up for this purpose on the independent initiative of the academic team leader and the business in question.
The academic turned to his University's administration for help and advice, since he knew nothing about the world of commerce. He had always made the results of his research freely available at conferences and had not attempted to patent outcomes of the initial research which was now proving commercially valuable.
The University was anxious to take a proportion of the profits, as owner of the academic's IP, since it was his employer. It also wished to clarify the future ownership of the work to be done in the spin-out company, since this promised to involve considerable sums of money. But there was no one in the administration who really understood the science. Its section dealing with this aspect of the University's affairs was new and inexperienced and inadequately staffed.
There were lengthy delays. The University did not have procedures which would allow it to accept the capital sum. Would-be funders and potential senior managers of the new company lost money while the company struggled to function without the University's interest being clarified. The business people involved became inpatient and set up a parallel company, issuing shares to the academic scientist without his knowledge and putting him in a compromising position with his employer. Squabbles at the business end led to attempts to get the University to take sides. The academic's 'involvement' through shares he did not know had been allocated to him led to disciplinary action being taken against him.
He left the University. The attempted collaboration failed. The University was not able to exploit the work and the academic scientist ceased to develop it.
E. R AND D ARRANGEMENTS AND INCUBATOR LABORATORIES IN UNIVERSITIES
The use of HEFCE-funded infrastructure provision such as laboratories by commercial and business organisations should be subject to clearly articulated principles.
Existing rules and codes of practice in HEIs relating to
Intellectual property
http://www.admin.ox.ac.uk/rso/policy/ip.shtml
http://www.admin.cam.ac.uk/reporter/2005-06/weekly/6010/6.html
AND FOLLOW THE BLUE LINKS BACK TO THE DEBATES
http://www3.imperial.ac.uk/clinicalresearchgovernanceoffice/projectplanning/...
Misconduct in research
http://armed.ilrt.bris.ac.uk/intranet/unit_details.html?unit_id=9
http://www.ox.ac.uk/gazette/1998-9/supps/3_4517.htm
http://www.admin.cam.ac.uk/offices/personnel/policy/misconduct.html
http://www3.imperial.ac.uk/learningtoresearch/procedures/appendix4/
Raising concerns in the public interest
http://armed.ilrt.bris.ac.uk/intranet/unit_details.html?unit_id=10
http://www.admin.ox.ac.uk/ps/staff/codes/pid.shtml
http://www.admin.cam.ac.uk/offices/personnel/staff/guide/terms/whistleblowing.html
http://www3.imperial.ac.uk/secretariat/governance/charterandstatutes/regulations/c7
http://www.ukrio.org.uk/home/index.cfm
An important collaboration
1. The stress on negotiation to produce good agreements which are less likely to lead to disputes is useful. I detect increasing interest amongst lawyers in negotiation training (10 years ago this was quite limited and courses I offered were attended reluctantly (at least until I started the games!). HEI folk have had very little if any training in this area.
2. Interestingly, on a quick scan the Lambert model agreements do not predicate ADR (or arbitration) as a model to resolve disputes. Would it be possible to use colleagues in this new strand to report how disputes in this area have been resolved?
Regards
Professor John Peysner
Professor of Law, Lincoln Law School'
A dispute about commercial exploitation of academic research
http://www.admin.cam.ac.uk/reporter/current/weekly/6108/10.html
http://www.admin.cam.ac.uk/offices/secretariat/ipr/ipr_appeal.pdf
Cambridge Ordinances on Intellectual Property rights are online at http://www.admin.cam.ac.uk/univ/so/so_ch13.pdf
We welcome URLs for the equivalent procedures in other HEIs.
We welcome contributions to and comments on this section of the project.