Dr. Guriqbal Singh JaiyaDirector

Small and Medium-Sized Enterprises DivisionWorld Intellectual Property Organization

www.wipo.int/sme

University-Industry University-Industry Partnerships: Role of Partnerships: Role of Intellectual PropertyIntellectual Property

KNOWLEDGE AGEKNOWLEDGE AGE

Universities and high schools Universities and high schools become the raw material of become the raw material of

economic development as coal economic development as coal mines were the raw material of mines were the raw material of

the industrial age !the industrial age !

The 21st Century Context for The 21st Century Context for Linking Universities and the Linking Universities and the

EconomyEconomy

► The Knowledge Economy – A world-wide The Knowledge Economy – A world-wide phenomenonphenomenon

► Knowledge – The new raw material driving Knowledge – The new raw material driving innovation, competitiveness, and economic innovation, competitiveness, and economic developmentdevelopment

► ““Economic success is no longer determined Economic success is no longer determined by possession (e.g., of raw materials or by possession (e.g., of raw materials or physical prowess), but by capacity to physical prowess), but by capacity to generate new knowledge and by the ability generate new knowledge and by the ability of the workforce to apply this knowledge of the workforce to apply this knowledge successfully” successfully” (M. Walshok, Knowledge Without (M. Walshok, Knowledge Without Boundaries, 1995)Boundaries, 1995)

► Develop effective and close co-Develop effective and close co-operation between universities and operation between universities and industryindustry innovationinnovation start-up of new companiesstart-up of new companies licensing of university intellectual propertylicensing of university intellectual property promotion of effective university-industry promotion of effective university-industry

relationsrelations better exploit the results of their better exploit the results of their

knowledge in relationship with industryknowledge in relationship with industry evaluation criteria for the performance of evaluation criteria for the performance of

universitiesuniversities

The role of universitiesThe role of universitiesin the Europe of in the Europe of

knowledgeknowledge

SUCCESS FACTORS FOR TECHNOLOGY SUCCESS FACTORS FOR TECHNOLOGY TRANSFERTRANSFER

AcademicBusiness

Government

Community

Talent Technology Capital Know-How

Market - Need

Successful Value-AddedTechnology Transfer

G. KozmetzkyUT-Austin

StudentsBrokers

Itinerant managers Consultants

EcosystemEcosystem [Thanks to Jeff Skinner, [Thanks to Jeff Skinner, UCL]UCL]

Investors’s Lawyers

Headhunters

PR agents

Realestate

LeasingBanks

Accountants

Patent Firms

Otherstart-ups

Government Funding of

Basic ResearchIn Academia

Reservoir ofKnowledge

IncreasedEfficiency

New Companies

(Jobs)

TaxesScience, The Endless Frontier, 1945

NewIndustry

But why does the But why does the government invest in government invest in

research?research?

Vannevar BushReservoir Theory of Knowledge

The Business of Academic The Business of Academic ResearchResearch

Source: National Science Board Report 2002

Federal dollars Federal dollars to Universities to Universities have continued have continued to climb, even to climb, even while falling in while falling in other sectorsother sectors

Traditional academic Traditional academic rolesroles

• ResearchResearch• Creation of new knowledgeCreation of new knowledge

• Breakthroughs and basis research (about half of all Breakthroughs and basis research (about half of all

basic research in U.S. conducted by universities)basic research in U.S. conducted by universities)

• Incremental technical advancesIncremental technical advances

• EducationEducation• Dissemination of knowledgeDissemination of knowledge

• Graduation of studentsGraduation of students

• ServiceService• Transfer of knowledge and transfer of technologyTransfer of knowledge and transfer of technology

MARKETCAPTURE

INVENTION

Idea

TRANSLATION

COMMERCIAL-IZATION

TechnologyFeasibility

Prototype/Scale-up

ProductDevelopment

InitialManufacture

FEASIBILITY MARKET & BUSINESS PLANNING

BusinessPlan

MarketingStrategy

ApplicationsPro-forma

Business PlanMarketR&D

7-12 YEARS

SCIENCE&

TECH

MARKETING

FINANCINGTech TfrFunds

IPO

Expansion Capital RETURNSSeed Capital

The Technology Transfer Process

Technology Licensing at Stanford

1971- FM Sound Synthesis ($22.9M)1974 – Recombinant DNA ($255M)1981 – Phycobiliproteins ($46.3M), Fiber Optic Amplifier($32M), MINOS ($3.4M)1982 – Amplification of Genes ($30M)1984 – Functional Antibodies ($120.6M)1986 – CHEF Electrophoresis ($2.1M)1990-1992 – DSL ($28.7M)1996 – Improved Hypertext Searching (GoogleTM ($336.5M)

►Notable Inventions from Stanford Notable Inventions from Stanford ResearchResearch

University-Industry University-Industry partnerships: Economic partnerships: Economic

AdvantagesAdvantages► Licensing agreements are only a small Licensing agreements are only a small

part of the benefits university research part of the benefits university research generates.  Others include:generates.  Others include:

► Generation of new knowledge Generation of new knowledge ► Creation of human capital Creation of human capital ► Transfer of tacit knowledge Transfer of tacit knowledge ► Technological innovation Technological innovation ► Capital investment Capital investment ► Regional leadership Regional leadership ► Production of knowledge infrastructure Production of knowledge infrastructure ► Influence on the regional milieuInfluence on the regional milieu

SUCCESS FACTORS FOR TECHNOLOGY SUCCESS FACTORS FOR TECHNOLOGY TRANSFERTRANSFER

AcademicBusiness

Government

Community

Talent Technology Capital Know-How

Market - Need

Successful Value-AddedTechnology Transfer

G. KozmetzkyUT-Austin

Conflicting Values - Common Conflicting Values - Common InterestInterest

UNIVERSITY INDUSTRY

Commercializationof New and Useful

Technologies

Teaching

Research

Service

EconomicDevelopment

Profits

Product R&D

Knowledge for Knowledge’s Sake

Academic FreedomOpen Discourse

Management ofKnowledge for Profit

ConfidentialityLimited Public Disclosure

Blending the University Blending the University Research and Entrepreneurial Research and Entrepreneurial

CulturesCultures

► AcademicsAcademics research priorities research priorities

set by investigatorset by investigator

grant-seekinggrant-seeking

publicationspublications

patenting driven by patenting driven by publicationspublications

serendipityserendipity

transfer at early transfer at early stagestage

► IndustryIndustry research priorities set research priorities set

by managementby management

profit-seekingprofit-seeking

proprietaryproprietary

patenting driven by patenting driven by business decisionsbusiness decisions

controlcontrol

add value before add value before transferringtransferring

Blending the University Blending the University Research and Entrepreneurial Research and Entrepreneurial

CulturesCultures

Academic perspectiveAcademic perspective; ; ““Why partner with industry?”Why partner with industry?”

►Application of research for public Application of research for public

goodgood

►Exposure to industry collaborationExposure to industry collaboration

►Additional source of research fundsAdditional source of research funds

►Build research endowmentBuild research endowment

►Reward investigator/inventorReward investigator/inventor

Blending the University Research Blending the University Research and Entrepreneurial Culturesand Entrepreneurial Cultures

Industry perspectiveIndustry perspective; ; ““Why partner with universities?”Why partner with universities?”

►Research institutions are rich source of Research institutions are rich source of

new ideas and technologynew ideas and technology

►Cheaper to support research and to Cheaper to support research and to

license-in technologylicense-in technology

►Biotech industry looks to academic Biotech industry looks to academic

collaborations for early stage technologycollaborations for early stage technology

Blending the University Research Blending the University Research and Entrepreneurial Culturesand Entrepreneurial Cultures

How do you begin to bring the two How do you begin to bring the two

cultures together ?cultures together ?

1. Employment Policy1. Employment Policy

2. Policy of Intellectual Property2. Policy of Intellectual Property

3. Revenue Sharing3. Revenue Sharing

4. Faculty Involvement4. Faculty Involvement

Employment PolicyEmployment Policy►Employer (University/College/Research Employer (University/College/Research

Institute) owns all property rights to any Institute) owns all property rights to any intellectual property conceived and/or intellectual property conceived and/or reduced to practice by its employeesreduced to practice by its employees

►Assignment form part of orientationAssignment form part of orientation

►Salary, supplies, space, other resources Salary, supplies, space, other resources of the University are utilizedof the University are utilized

Policy on Intellectual Policy on Intellectual PropertyProperty

►OwnershipOwnership►Transfer of ownershipTransfer of ownership►Rights and obligations of faculty Rights and obligations of faculty

(employee)(employee)►Rights and obligations of the Rights and obligations of the

University (employer)University (employer)►Royalty sharingRoyalty sharing►WaiversWaivers

The Bayh-Dole Act The Bayh-Dole Act Public Law 96-517Public Law 96-517

Patent and Trademark Act of 1980Patent and Trademark Act of 1980

► Allow small business and non-profit organizations Allow small business and non-profit organizations to retain title to innovations made under federally-to retain title to innovations made under federally-funded research programsfunded research programs

► Promote investment by the private sector in Promote investment by the private sector in commercialization of federally funded research commercialization of federally funded research discoveries for the public gooddiscoveries for the public good

In Passing Bayh Dole, In Passing Bayh Dole, Congress recognizes…Congress recognizes…

► Creativity is truly a national resourceCreativity is truly a national resource► The patent system in U.S. is the vehicle which The patent system in U.S. is the vehicle which

permits delivery of the resource to the publicpermits delivery of the resource to the public► It is in the public interest to place It is in the public interest to place

stewardship of research results in the hands stewardship of research results in the hands of universities and small business of universities and small business

► Existing U.S. policy was ineffective at a time Existing U.S. policy was ineffective at a time when intellectual property and innovation when intellectual property and innovation were becoming the preferred global currencywere becoming the preferred global currency

Source: Howard Bremer, University Technology Transfer Evolution and Revolution, COGR, 1999.

Bayh-Dole ProvisionsBayh-Dole Provisions

► Encourage collaboration with industry to promote Encourage collaboration with industry to promote the utilization of inventionsthe utilization of inventions

► Disclosure to government within 2 months of Disclosure to government within 2 months of inventioninvention

► Universities must file patents on inventions they Universities must file patents on inventions they elect to own, and share any monies with elect to own, and share any monies with inventorsinventors

► Government retains non-exclusive license and Government retains non-exclusive license and march-in rightsmarch-in rights

► Requirement to attempt to develop the inventionRequirement to attempt to develop the invention► Preference to small businesses in granting Preference to small businesses in granting

licenseslicenses► Products must be manufactured in the U.S.Products must be manufactured in the U.S.

Bayh-Dole Act 1980Bayh-Dole Act 1980► Allows universities to own and sell/license Allows universities to own and sell/license

inventions/novations generated with federal inventions/novations generated with federal dollars.dollars.

► Motivation:Motivation: Get ideas off the shelf w/o sacrificing Get ideas off the shelf w/o sacrificing

university mission university mission (synergies)(synergies) Generate university income for more researchGenerate university income for more research

► Critique:Critique: Increased commercialization of university Increased commercialization of university

research agendaresearch agenda Distraction from basic research Distraction from basic research (tradeoffs)(tradeoffs) Hold-ups/Anti-Commons approach to researchHold-ups/Anti-Commons approach to research

Bayh - Dole Act 1980Bayh - Dole Act 1980

►Gives nonprofit organizations and Gives nonprofit organizations and

small businesses the right to:small businesses the right to:

retain title to inventions made in retain title to inventions made in

whole or in part with federal fundswhole or in part with federal funds

grant exclusive term-of-patent grant exclusive term-of-patent

licenseslicenses

MARKETCAPTURE

INVENTION

Idea

TRANSLATION

COMMERCIAL-IZATION

TechnologyFeasibility

Prototype/Scale-up

ProductDevelopment

InitialManufacture

FEASIBILITY MARKET & BUSINESS PLANNING

BusinessPlan

MarketingStrategy

ApplicationsPro-forma

Business PlanMarketR&D

7-12 YEARS

SCIENCE&

TECH

MARKETING

FINANCINGTech TfrFunds

IPO

Expansion Capital RETURNSSeed Capital

The Technology Transfer Process

Executive(policies)

Other academics

Gene pool Commercially

active scientists

One University One University [Thanks to Jeff Skinner, [Thanks to Jeff Skinner,

UCL]UCL]

Tech transfer

office

Why Do Universities Why Do Universities Transfer Technology Transfer Technology

► Generate licensing revenue and research Generate licensing revenue and research fundingfunding

► Dissemination of new knowledge for the Dissemination of new knowledge for the benefit of societybenefit of society

► Development of University technology into Development of University technology into productsproducts

► Provide avenue for faculty members to Provide avenue for faculty members to interact with businessinteract with business

► Stimulate economic developmentStimulate economic development► Generate favorable publicity for the UniversityGenerate favorable publicity for the University

Patents as source of research Patents as source of research fundingfunding

► 25% of life scientists have a patent 25% of life scientists have a patent Median patent holder owns 2 patentsMedian patent holder owns 2 patents

► Patents as the “academic’s lottery ticket”Patents as the “academic’s lottery ticket” 33% of patent holders receive licensing 33% of patent holders receive licensing

revenues, representing 8% of all life scientists.revenues, representing 8% of all life scientists. Average royalties ~$16,500 per patentAverage royalties ~$16,500 per patent But in our sample:But in our sample:

► One patent accounts for ~90% of those royaltiesOne patent accounts for ~90% of those royalties► Of 1200 patents there are only three that make Of 1200 patents there are only three that make

~$1million or more.~$1million or more.► Median annual royalty income is $5,000 Median annual royalty income is $5,000 ► License revenues account for less than 1% of research License revenues account for less than 1% of research

budgets for those with patentsbudgets for those with patents

Is there a commercialization Is there a commercialization of US university life of US university life

sciences?sciences?► 53% of life scientists in our survey have no 53% of life scientists in our survey have no

engagement with industry engagement with industry No patents, invention disclosures, industry No patents, invention disclosures, industry

funding, service on industry boards, funding, service on industry boards, collaborations, etc.collaborations, etc.

► 20% of life scientists report private industry 20% of life scientists report private industry funding, accounting for 25% of research budgets funding, accounting for 25% of research budgets They still get 54% from federal sources They still get 54% from federal sources

► Overall in the life sciences, 67% of all research Overall in the life sciences, 67% of all research funding comes from federal sources, 15% from funding comes from federal sources, 15% from own university sources, 10% from private own university sources, 10% from private foundations, and only 5% from private industry.foundations, and only 5% from private industry.

Percent of lab funding from Percent of lab funding from different funding sourcesdifferent funding sources

SourceSource All life All life scientistsscientists

Scientists Scientists who do who do

100% basic 100% basic researchresearch

Federal Federal (NIH, NSF, etc.)(NIH, NSF, etc.) 66.966.9 71.271.2**

Own universityOwn university 14.614.6 15.715.7

FoundationsFoundations 9.59.5 9.7 9.7

IndustryIndustry 5.35.3 0.80.8**

State governmentState government 2.42.4 0.90.9**

* Significantly different at a 95% confidence level

Evidence on hold-up problems:Evidence on hold-up problems:Percent of life scientists reporting Percent of life scientists reporting

constraintsconstraints Not Not

applicableapplicableNone or None or minor minor

constraintconstraint

Some or Some or major major

constraintconstraint

Affordability of licensing Affordability of licensing intellectual propertyintellectual property

61.561.5 33.633.6 4.94.9

Materials transfer Materials transfer agreements from agreements from another universityanother university

49.149.1 39.139.1 11.811.8

Materials transfer Materials transfer agreements from private agreements from private industryindustry

56.256.2 33.433.4 10.410.4

Funding Basic ResearchFunding Basic Research► Very difficult to fund without federal money Very difficult to fund without federal money ► Patents unlikely to provide much help becausePatents unlikely to provide much help because

““lottery” – unpredictable returnslottery” – unpredictable returns timing of liquidity (can’t borrow against expected timing of liquidity (can’t borrow against expected

licensing earnings).licensing earnings). reinforced by basic nature of research that are less reinforced by basic nature of research that are less

likely to generate valuable patents.likely to generate valuable patents.

► Industry funding small and unlikely to ever be Industry funding small and unlikely to ever be much more than that (time horizon)much more than that (time horizon)

Good news that stem cells won’t likely be the Trojan Good news that stem cells won’t likely be the Trojan horse that brings commercialization into the universityhorse that brings commercialization into the university

Bad news that industry won’t fund enough of this Bad news that industry won’t fund enough of this research to make up for federal fundingresearch to make up for federal funding

Overview of the Overview of the Technology Technology

Commercialization Commercialization PathwayPathway

Strategy

Invention Disclosure

TTCEvaluation

IPProtection Licensing

Research

Invention Evaluation Invention Evaluation ProcessProcess

InventionInventionDisclosure

ElectronicSubmission

TechnologyTransfer

Committee

TechnologyTransfer

Committee

TechnicalReview

Patent SearchMarket Analysis

PatentTechnology

Release to Inventor

Hold forFurther

Evaluation

TestMarket

► Is it Is it protectableprotectable?? Patent, copyright, know howPatent, copyright, know how

► Is it Is it enforceableenforceable?? InfringementInfringement

► Is it Is it licensablelicensable?? The primary reason for investing in The primary reason for investing in

intellectual property protection is the intellectual property protection is the ability to license the invention.ability to license the invention.

Invention Evaluation Invention Evaluation ProcessProcess

Evaluation CriteriaEvaluation Criteria

► Level of IP ProtectionLevel of IP Protection► Related Industry R&D ActivityRelated Industry R&D Activity► Inventor Reputation and ParticipationInventor Reputation and Participation► Inventor R&D ActivityInventor R&D Activity► Promised Benefits and NoveltyPromised Benefits and Novelty► Market SizeMarket Size► Competing ProductsCompeting Products► Development Status and Time to MarketDevelopment Status and Time to Market► Validation and PerformanceValidation and Performance

Overview of the Overview of the Technology Technology

Commercialization Commercialization PathwayPathway

Strategy

Invention Disclosure

TTCEvaluation

IPProtection Licensing

Research

Licensing StrategyLicensing Strategy

IntellectualIntellectualPropertyProperty

Start-UpStart-UpCompanyCompany

LicenseLicenseAgreementAgreement

OptionOptionAgreementAgreement

Internal tensions: $ vs. altruismInternal tensions: $ vs. altruism Non-exclusive or exclusive?Non-exclusive or exclusive? (widespread access vs. investment (widespread access vs. investment

incentive)incentive) Exclusive: requires incentives/disincentivesExclusive: requires incentives/disincentives

Significant upfront feesSignificant upfront fees Effective royaltiesEffective royalties Appropriate minimums **Appropriate minimums ** Patents costsPatents costs Diligence milestonesDiligence milestones Legal and responsible useLegal and responsible use

Exclusive variationsExclusive variations Field of useField of use Sublicense incentivesSublicense incentives Return of rightsReturn of rights consortiaconsortia

Non-exclusive with “sliding scales” of Non-exclusive with “sliding scales” of termsterms

Balancing Public Good vs. Practical concerns in IP Licensing

Licensing StrategyLicensing Strategy

►Option AgreementOption Agreement Early stage technology that requires further Early stage technology that requires further

developmentdevelopment Proof of principle – add value or reduce riskProof of principle – add value or reduce risk Reach some minimal level of progress to be of Reach some minimal level of progress to be of

interest to investorsinterest to investors Does not give rights to develop or sell Does not give rights to develop or sell

productsproducts Exclusive or non-exclusiveExclusive or non-exclusive Convertible to license agreement on agreed Convertible to license agreement on agreed

termsterms

Licensing StrategyLicensing Strategy

►License Agreement – Existing CompanyLicense Agreement – Existing Company Technology likely to lead to a single Technology likely to lead to a single

product product Small number of large firms that dominate Small number of large firms that dominate

the fieldthe field►Exclusive or non-exclusiveExclusive or non-exclusive

Capital requirements to enter the industry Capital requirements to enter the industry prevent startups from being competitiveprevent startups from being competitive

Existing company may be able to get the Existing company may be able to get the technology to market fastertechnology to market faster

Licensing StrategyLicensing Strategy

► Start-Up Company FormationStart-Up Company Formation Platform or disruptive technology with broad Platform or disruptive technology with broad

patent protectionpatent protection Ability to generate interest from investorsAbility to generate interest from investors

► Market size sufficient Market size sufficient ► Gross margins attractiveGross margins attractive

Viable business modelViable business model Begins with an option agreement conditioned Begins with an option agreement conditioned

upon milestonesupon milestones► InvestmentInvestment► Management teamManagement team

Technology MarketingTechnology Marketing

► Inventors are the single most important Inventors are the single most important step in marketingstep in marketing 70% of licensing leads come from the 70% of licensing leads come from the

inventorinventor

► Identify companies in technology areaIdentify companies in technology area►Network at scientific and industry Network at scientific and industry

conferencesconferences►Respond in a timely manner Respond in a timely manner ►Have a plan for next steps in researchHave a plan for next steps in research►Forward all licensing interest to the OTMForward all licensing interest to the OTM

Technology MarketingTechnology Marketing

►OTM Marketing EffortsOTM Marketing Efforts Technologies available for licensing Technologies available for licensing

are on the OTM web siteare on the OTM web site Focused business development Focused business development

relationships in specific technology relationships in specific technology areasareas

Relationships with local and national Relationships with local and national venture capital groupsventure capital groups

Industry conferencesIndustry conferences

Overview of the Technology Overview of the Technology Commercialization PathwayCommercialization Pathway

Strategy

Invention Disclosure

TTCEvaluation

IPProtection Licensing

Research

Licensing ProcessLicensing Process► Identification of interestIdentification of interest►Confidentiality agreement for scientific Confidentiality agreement for scientific

and IP due diligenceand IP due diligence►Discussion of license typeDiscussion of license type

Option versus license agreementOption versus license agreement Exclusive versus non-exclusiveExclusive versus non-exclusive

►Negotiation of financial, business, and Negotiation of financial, business, and legal termslegal terms

License Agreement termsLicense Agreement terms►License grantLicense grant

Exclusive or non-exclusiveExclusive or non-exclusive Field of useField of use TerritoryTerritory License termLicense term

►License ConsiderationLicense Consideration Upfront feeUpfront fee Maintenance fees / Minimum annual royaltyMaintenance fees / Minimum annual royalty RoyaltiesRoyalties Other – Milestones, equityOther – Milestones, equity

LEADLEADMANAGEMENTMANAGEMENT

SEEDSEEDFUNDINGFUNDING

PLATFORMPLATFORMTECHNOLOGYTECHNOLOGY

CORPORATE PARTNER/CORPORATE PARTNER/SOPHISTICATED VCSOPHISTICATED VC

University Approach to University Approach to Start-Up Company Start-Up Company

FormationFormation

Faculty Involvement with Faculty Involvement with Start-Up CompaniesStart-Up Companies

► PermittedPermitted activities activities Holding of equityHolding of equity Sponsored research from company Sponsored research from company Consulting relationshipConsulting relationship Scientific Advisory BoardScientific Advisory Board Entrepreneurial leaveEntrepreneurial leave

► ProhibitedProhibited activities activities Holding of greater than 20% equityHolding of greater than 20% equity Serving as PI for sponsored animal research or Serving as PI for sponsored animal research or

clinical studyclinical study Holding Board of Directors seatHolding Board of Directors seat Holding management position in licensing companyHolding management position in licensing company

Faculty start‐ups: “Best Practices”

► Faculty must► • Separate their on‐going University research from company

work► • Understand that their primary commitment is to the University► – Only advisory/consulting roles with the company► – Limit consulting for the company to 13 days a quarter, per

University policy► • Take a leave of absence if engaging in a management role► Faculty must not► • Negotiate with the University on behalf of the company► • Receive gifts or sponsored research from the company► • Involve University staff in activities at the company► • Involve company personnel in Stanford research► • Involve current students in company activities► • Involve junior faculty who are in a dependent role in company

activities► • Use University facilities for company purposes► • Undertake human subjects research or supervise faculty who

are human► subjects protocol directors for work related to the company’s

interests

Background/ContextBackground/Context

► Faculty ConsultingFaculty Consulting RationaleRationale – having faculty engaged with the corporate – having faculty engaged with the corporate

community may provide important opportunities to advance community may provide important opportunities to advance science and research and quality of medicine and patient care science and research and quality of medicine and patient care BUT there are issues and problems that must be addressed.BUT there are issues and problems that must be addressed.

ResponsibilitiesResponsibilities► Faculty Member’s responsibilitiesFaculty Member’s responsibilities

Understand University policies relating to conflict of Understand University policies relating to conflict of interest, intellectual property, time allowed for interest, intellectual property, time allowed for consulting, etc.consulting, etc.

Understand what you’re signing !Understand what you’re signing !► University’s responsibilitiesUniversity’s responsibilities► Disclosure obligationDisclosure obligation

► What’s the norm for consulting in IndustryWhat’s the norm for consulting in Industry??

Issues – The Consulting Plus Issues – The Consulting Plus DilemmaDilemma

►Conflicts of Interest and Conflicts of Interest and conflicts of commitment – conflicts of commitment – Consulting + sponsored researchConsulting + sponsored research Consulting + equity ownershipConsulting + equity ownership Consulting + management positionConsulting + management position Consulting + clinical trial (human Consulting + clinical trial (human

subjects)subjects) Use newspaper testUse newspaper test

IssuesIssues► Intellectual Property: Intellectual Property: Company’s general ruleCompany’s general rule: The : The

company owns any intellectual property created by the consultant company owns any intellectual property created by the consultant that relates to the research he/she does for the company”that relates to the research he/she does for the company”

► How does this impact the Consultant’s research with the How does this impact the Consultant’s research with the University:University: Scope of work – length of time (e.g. broad vs. Scope of work – length of time (e.g. broad vs.

narrow scope, one-day speakers’ board versus narrow scope, one-day speakers’ board versus two year consulting relationship)two year consulting relationship)

IP ownership – (remember: disclosure to UR). If IP ownership – (remember: disclosure to UR). If Company owns it, you lose the right to use it in Company owns it, you lose the right to use it in your researchyour research

Potential to compromise future research work or Potential to compromise future research work or fundingfunding

Terms suggested by industry are getting broader Terms suggested by industry are getting broader and broaderand broader

IssuesIssues►Confidentiality and PublicationConfidentiality and Publication Rights Rights

Is it clear what information is considered to be Is it clear what information is considered to be confidential?confidential?

Freedom to publishFreedom to publish

►Indemnification and Limitation of Indemnification and Limitation of LiabilityLiability General comments on liabilityGeneral comments on liability Consultant indemnifying CompanyConsultant indemnifying Company Company indemnifying ConsultantCompany indemnifying Consultant Try to limit your liability for the work you performTry to limit your liability for the work you perform

IssuesIssues►Exclusivity Exclusivity

Does the contract provide that you can’t Does the contract provide that you can’t do “overlapping” or “related” research do “overlapping” or “related” research for others? Other language purporting to for others? Other language purporting to restrict you or the University?restrict you or the University?

►Use of University resources in the Use of University resources in the consulting arrangement (includes consulting arrangement (includes space, equipment, students, etc.)space, equipment, students, etc.)

►Tax Issues related to receipt of Tax Issues related to receipt of consulting incomeconsulting income

TECHNOLOGY TRANSFER, INTELLECTUAL PROPERTY AND

EFFECTIVE UNIVERSITY-INDUSTRY PARTNERSHIPS: The

Experience of China, India, Japan, Philippines,

the Republicof Korea, Singapore and Thailand

►http://www.wipo.int/freepublications/ehttp://www.wipo.int/freepublications/en/intproperty/928/wipo_pub_928.pdfn/intproperty/928/wipo_pub_928.pdf