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University-Industry Collaboration and Technology Transfer

Nov 9, 2005
Ben Rapinoja and Aura Soininen

This article discusses trends in university-industry collaboration and technology transfer in general and points out some key aspects regarding the Finnish regulative reforms

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Abstract

Universities lie in the core of successful, leading economies in the world. They have traditionally been thought of as the places for higher education and basic research, but serve increasingly also other than purely public interests. Particularly U.S. universities are actively pushing the commercialisation of their inventions through spin-offs, and technology and patent licensing. The political agenda of stimulating collaboration between universities and the industry, technology transfer and commercialisation of university-born inventions can also be perceived in Europe. New legislation regarding the ability of universities to hold shares in companies has been issued in Finland, for example, and another legislative change is on its way. In December 2004, the Finnish government submitted a proposal for a new Act on university inventions. The Act aims at diminishing difficulties concerning the distribution of intellectual property rights in research projects undertaken by universities and other institutions of higher education. This article discusses trends in university-industry collaboration and technology transfer in general and points out some key aspects regarding the Finnish regulative reforms.

Universities as Innovators

Universities are situated in the crossroads of research, education and innovation. Indeed, according to the Communication from the Commission "The Role of the Universities in the Europe of Knowledge" (COM(2003) 58 final) universities attract an increasing number of students, they employ 34% of the total number of researchers, and are responsible for 80% of the fundamental research pursued in Europe. However, compared to the U.S. knowledge is regarded as being transferred and disseminated efficiently enough in Europe. In Commission’s view cooperation between universities and the industry needs to be intensified and university-inventions geared more into innovations. One of the problems Commission has identified is that in Europe fundamental research is often separate from its potential business applications resulting in companies' willingness to invest in applied rather than fundamental research. In general, the share of so-called contract-based research is increasing, and universities are moving from exploratory science towards commercially profitable R&D changing the scope of academic research. Meanwhile, the fundamental research takes already potential business applications into consideration in the U.S. Nevertheless, universities work with the industry without compromising their guiding principles of teaching, research, open dissemination of information and serving the public. Also companies realize the benefits of being tapped into the university research pool through industry corsortia membership, for instance, and sourcing new inventions as well as skilled workforce from them particularly in new areas such as biotechnology and biomedicine.

It is vital that knowledge flows from universities into business and society. Most technology transfer takes place through traditional ways; teaching, publications, and students, but there are two main ways through which expertise possessed and developed by universities can flow directly to industry: licensing of intellectual property, and spin-off and start-up companies. The core for both paths lies in the creation and ownership of intellectual property. Indeed, when comparing the university-industry collaboration and technology transfer in the U.S. and European universities, one of the major differences resides in the ways intellectual property rights, such as patents and copyrights, are acquired, managed and exploited. The U.S. universities also provide a more entrepreunial environment than their European counterparts. Since 1980 there has been over 4300 university start-ups in the U.S. As to spin-offs for instance California universities and research institutes have spun-off over 600 companies.

Management of Intellectual Property Rights

Universities are entangled in many types of research activities, some of which are government funded and some which receive varying shares of financing from external, private parties. As regards to further development and commercialisation of university research the ownership of intellectual property (IP) is critical. It determines the ways in which research results can be utilized. The key players in this area, and thus the potential IP holders either by law or contract, are the following:

1. the university or other similar institution from which the research results have originated

2. the researcher who has created the work such as computer software or came up with the invention, and

3. the investor or other commercial partner seeking to further-develop and commercialise the invention.

All these parties have their own, often conflicting interests: universities tend to stress the free disclosure of research data and openness in sharing the results while investors act profit-potential in mind and typically require strict confidentiality and aim at making the results proprietary. Also, researchers may have their own views regarding the exploitation of the inventions. The situation is complicated even further by the fact that researchers often hold positions in universities, but are at the same time involved in various research projects funded by different parties, work for companies or even have their own firms. Thus, although the research agreements forged between universities and investors were very carefully constructed and the university had properly made sure that it holds the rights to the inventions made by its research staff, difficulties may arise in determining who exactly owns the rights in the first place. In the worst case the researcher, university and the company are able to claim ownership simultaneously.

The above-mentioned conflicts may have an effect on the commercialisation of university-inventions even if the university did its best in managing intellectual property rights (IPR). However, the problem is more severe in practise as many European universities have insufficient financial resources dedicated to IPR management, and their IPR policies and contract practices are often undeveloped. European universities are not typically as active as their U.S. counterparts in driving the protection or commercialisation of inventions. The ideology of "open science" is strong, and the benefits of patent protection regarded as limited. Indeed, although patent protection is often applied for if the research is contract-based, and thus companies have an agenda to finance it, it is not a standard procedure in European universities to patent inventions resulting from government-funded, so-called open research. Indeed, the initiative to file for patent protection comes typically from researchers themselves. Also, although many European universities offer different types of innovation services to researchers, they seldom have separate technology licensing units through which they would seek to generate revenues for both the university and the

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