International Strategies to Enhance University-Industry Relations

1. International, Regional and National Strategies of Public Institutions on the Role of TTO s to Enhance University & Industry Relations INTERNATIONAL CONFERENCE ON MANAGING INTELLECTUAL PROPERTY IN UNIVERSITIESIstanbul, May 23 – 25, 2013Boğaziçi University

2. Topics • 30 Years After Bayh - Dole Act • University – Industry Partnership • Role of TTO s to Enhance University & Industry Relations in Knowledge Based Knowledge Economy • WIPO TTO Projects and Capacity Building Related to Technology Transfer

3. Bayh - Dole Act • Bayh - Dole Act, 1980, United States • uniform IP policy among federal agencies funding research; • universities retain ownership to inventions made under federally funded research; • universities are expected to disclose, protect and to ensure commercialization upon licensing; • benefit sharing – inventor, department, university and TT process.

4. Bayh - Dole Act • Role of University TTO s – to focus on: • Massive Patenting • IP Commercialization • Exclusive Licensing to Industry • Start - ups • Royalty Flow • Myth about Return on Research Investment through Commercialization of Research Results • Stanford University – about 50,000 000 $ licensing income per year.

5. Bayh - Dole Act • US Universities the largest PCT filers among educational institutions; • PCT Report for 2012 – US Universities account for 26 of the top 50 educational institutions by the number of international applications published in 2012, followed by institutions in Japan (6) and the Republic of Korea (6); • First position – University of California – 351 international applications; • Massachusetts Institute of Technology (MIT) – (168); • Harvard University – (146 ).

8. AUTM U.S. Licensing Activity Survey: FY2011 • Highlights from the AUTM U.S. Licensing Activity Survey: FY2011 include: • 591 new commercial products introduced • 4,899 licenses executed • 1,152 options executed • 416 executed licenses containing equity • 38,600 active licenses and options • 670 new companies formed, 487 of which had their primary place of business in the licensing institution’s home state • 3,927 startup companies still operating as of the end of FY2011

9. 30 Years After Bayh - Dole Act • Diferrent opinions about the impact of the Act on innovation in US and its applicability in other countries; • Since 1980, US academic patenting, licensing, and associated revenues have steadily increased. • BD accelerated this growth by: • clarifying ownership rules; • simplifying bureaucratic procedures regarding commertialization of research results; • by changing norms toward patenting and licensing at universities. • Significan progress in certain areas of research – such as biotechnology and ICT. • . • Frequent Critics • Universities became more interested in business opportunities than public interest; • Exclusive licenses limited access to research results of public interest, such as research and diagnostic tools; • Licensing of upstream research results diminished incentives for downstream research and commercialization; • Commercial success is not a general trend, but the case of limited number of universities; • Huge public and venture capital investment in science influenced innovation in public sector, not only BD Act application; • Licensing income represents only 5% of the research expenditure, and cannot be concerned as return on research investment, etc.

10. 30 Years After Bayh - Dole Act • BD Act – Model for technology transfer policies in number of countries, in particular in emerging and developing countries that recently addoopted their technology transfer strategies: • Brazil • South Afrika • India (“Indian Bayh – Dole Act”) • Is BD Act applicable as a “model that fits all”? • Each strategy should be customized, even when incorporating certain principles contained in instruments such as BD Act. • 30 years after – the context changed, in areas of: • IP Laws • Scientific Work • Model of Economy

11. Changing Value of Knowledge in Economy • Row Material Based Economy – Commodity Based Natural Resources • Production Based Economy – Commodity Knowledge - Based Physical Products • Knowledge Based Industrial Economy – Proprietary Knowledge - Based Physical Product • Knowledge Based Knowledge Economy – IP – Based Intellectual or Virtual Products and Services • Knowledge (valuable intangible) became in the same time input and output in innovation process • “Ideas and innovations have become the most important resource, replacing land, energy and raw materials” • The Economist 2005

12. From Row Material to Knowledge Based Innovative Product – Branded Ethiopian Coffee

13. Successful Story of Nespresso – Brand and Concept

15. New Type of Products - Based on Complex and Fast Changing Technologies Professional Specialization Global Competitiveness New Collaboration Partners Global Mobility - Funds/People New Business Models – “Open Innovation” New Knowledge Based Businesses Knowledge Based Knowledge Economy

16. Knowledge Based Businesses – Intangible Assets Represent the Core Market Value of Company • In 1975 IP and intangible assets represented less than 20% of the company's value. • Today, intangible assets represent more than 80% of the companies market value. • Center for Business Innovation of E&Y – Survey - 1981 – 2002 • AT&T – 1981 – 120 billion$ market cap, all in tangibles; 2002 – smaller AT&T – 75 billion $ market cap – 50 billion in intangibles: • General Electrics – 400 billion$ market cap – less than 4 billion $ in tangibles: • Microsoft – 300 billion $ market cap – only 5 billion $ in tangibles • Pfizer – 260 billion $ market cap – less than 10 billion $ in tangibles.

17. The Challenges of Adding Value to Products and Processes through the Generation, Protection and Commercialization of Intangibles • Do we need to create everything internally? • Can we share the knowledge and cost with partners? • Why protecting? • Do we own the best business model for commercialization of internally created intangibles? • What are the risks and benefits? • Changing vision of business innovation – from “closed innovation” to “open or networked innovation”.

18. Closed Innovation Exclusive use of internal R&D; Technology invented, protected, developed, brought to the market and distributed by the same company; Full internal control of the innovation – from R to D to C; Technology exploited only through internal business model; IP generators – mainly companies; IP – barrier to entry – not source of revenue; Huge IP non-performing portfolios; Companies usually selling but not buying IPR s; Lack of IP market . Open innovation Use of internal and external R&D and inventions; Openness to external business models; Variety of IP generators and collaborators – other companies, public universities and R&D institutions, users, customers, suppliers; Active IP asset management ; Development of Intermediate IP Markets; IP - an asset which can (and should) be managed through an adequate business model in order to increase value and become a reliable source of revenue. Open and Closed Innovation

21. TODAY IPR management Fund raising Branding Evaluation of technology Protection of research results Due diligence Technology marketing Licensing negotiation Collaboration with industry Partnerships Entrepreneurship development , by establishing business incubation of spin-offs/start-ups IP training for researchers Administration of institutional IP policy Monitoring deals etc. Changing Role of Academic Institutions • BEFORE • Education • Research • Publication

22. R&D Expenditure • Global R&D expenditure almost doubled in real terms from 1993 to 2009. • Most R&D spending still takes place in high-income countries – around 70 percent of the world total. They spend around 2.5 percent of their GDP on R&D – more than double the rate of middle-income economies. • Low- and middle-income economies increased their share of global R&D expenditure by 13 percent be­tween 1993 and 2009. China accounts for most of this increase – more than 10 percentage points.

23. Source: WIPO” World Intellectual Property Report – The Changing Face of Innovation”

24. Israel has the highest GERD - in excess of 4% of gross domestic product (GDP).; The OECD average stands at 2.3%; The United States accounts for 41% of OECD-area GERD; Japan - 15% of OECD-area GERD, and Germany - 8%. China’s domestic expenditure on R&D is the equivalent of 12% of total OECD GERD; it is therefore the world’s third largest R&D performer. The business sector - the main performer of R&D in most economies - nearly 70% of R&D performed in the OECD area. Israel’s business sector makes the largest contribution to GERD, with nearly 80% of total R&D, closely followed by Japan and Korea. Business R&D is exceeded by R&D in the higher education sector only in Turkey, Greece and Poland. Across the OECD, higher education OECD higher education R&D accounts for nearly 17% of total GERD. The government is the main performer of R&D only in Argentina, where it accounts for nearly 40% of GERD Gross Domestic Expenditure on R&D (GERD) – Trends (OECD Scoreboard 2011)

25. IP Ownership • IP ownership has become more central to business and innovation strategies on national and institutional level; • Demand for patents has risen from 800,000 applications worldwide in the early 1980s to 1.8 million in 2009. This increase has occurred in different waves, with Japan driving filing growth in the 1980s, joined by the United States (US), Europe and the Republic of Korea in the 1990s and, more recently, by China. • Middle – income countries are becoming an interesting destination for IP protection – in the first place China.

28. Source: WIPO” World Intellectual Property Report – The Changing Face of Innovation” • Public policies supporting commercialization of publically funded research

29. Source: WIPO” World Intellectual Property Report – The Changing Face of Innovation”

30. Innovation Trends – Rise of Tradability of IP • Knowledge markets based on IP rights are on the rise, though still nascent; • The trad­ability of IP has increased; • More frequent licensing of IP rights; • International royalty and licensing fee (RLF) receipts increased from USD 2.8 billion in 1970 to USD 27 billion in 1990, and to approximately USD 180 billion in 2009 – outpac­ing growth in global GDP.

31. Source: WIPO” World Intellectual Property Report – The Changing Face of Innovation”

32. University – Industry Collaboration • R&D and Universities - New Potential Solution for Needs • They are not competitors on the market; • Knowledge creators; • Leveraging on long term governmental investment in research and development; • New partnership supported strongly by government and society – as support for national and regional economies. • EU – Commission Recommendation –April 10, 2008- Knowledge transfer between universities and industry is made a permanent political and operational priority for all public research funding bodies within a Member State, at both national and regional level. • University – strong interest for collaboration with industries • Access to market technologies; • Funding; • Placement of Students; • Reputation; • Impact on local economic development and growth.

33. University – Industry Linkages • Even with technology transfer policies that are placing universities - industry collaboration as one priority objectives, the effective implementation of this goal continues to be a great challenge. • EU Horizon 2020 Strategy – one of the objectives is fostering regional R&D – industry collaboration. • What are collaboration problems?

34. University - Industry Linkages: Collaboration Problems • Basic Problems • Prejudice on both sides; • Lack of information; • Lack of communication; • Inadequate incentives for collaboration: • Different approaches to: • IP ownership • Funding • Timing of deliverables • Problems Related to Structures and Organizations • Lack of Operational IP Market; • Limited Number of Alternative Sources of Funding Specifically Allocated for TT Activities; • Complicated IP Valuation Processes; • Lack of Intermediary Organizations; • Scarcity of Technology Management Professionals; • Need for Efficient Incentive Policies – tax policies, immigration policies etc.

35. Role of TTO s to Enhance University & Industry Relations in Knowledge Based Knowledge Economy • Understanding that academic institutions today are in relation with “Knowledge Based Businesses” (KBB) and that their interest is to shorten the time to market of innovative products and services ; • Therefore the priority subject of the collaboration with KBB would be in the area of “intangible assets” ; • Almost all activities of academic institutions can be considered as an intangible assets (knowledge, know – how, IP, scientific services, etc.) – if properly managed; • New challenge for TTO s – how to develop, control and manage the portfolio of intangible assets?

36. Focusing on the needs of KBB in the region as a part of international world ( “act locally – think internationally”) Role of TTO s to Enhance University & Industry Relations in Knowledge Based Knowledge Economy

37. Partnership and Collaboration Value chain is not any more linear Value Chain as a Network of research and industry partners with compatible assets Role of TTO s to Enhance University & Industry Relations in Knowledge Based Knowledge Economy KBB R&D TTO GOV UNV

38. “Collaborative Innovation” – requires permanent management of portfolio of intangible assets Important role of IP Institutional Policies “Openness” in collaboration Partners with / for Government Private Sector Benefit of the Society Role of TTO s to Enhance University & Industry Relations in Knowledge Based Knowledge Economy IP Institutional Policy Open Innovation

39. WIPO TTO Projects and Capacity Building Programs Related to Technology Transfer

41. WIPO Innovation Division’s Expertise HUMAN AND KNOWLEDGE CAPITAL • INNOVATION DIVISON • EXPERTISE • & • TRAINING • Patent Drafting • IP Valuation • IP Marketing • Successful Technology Licensing • IPR Management in Universities and PROs ORGANIZATIONS AND PROCESSES LEGAL FRAMEWORK FUNDING

42. WIPO Innovation Division’s Activities HUMAN AND KNOWLEDGE CAPITAL INNOVATION PROJECTS • R&D Networks - Colombia - Western Africa • TTO Project for Arab Region • Open Innovation Platforms ORGANIZATIONS AND PROCESSES LEGAL FRAMEWORK FUNDING

43. Establishment of TTOs in Arab Region • Assists developing countries to create an innovation infrastructure to support university-industry collaboration; • Algeria, Egypt, Jordan, Morocco and Tunisia; • Flexible framework – adjustable to needs of individual countries; • Each country “owns” its operation; • Second Phase – Arab Region Innovation Network !!!

44. Establishment of TTOs in Arab Region • Key operations • Transfer of knowledge • Setting up infrastructure • Creating intermediaries able to facilitate innovation and technology transfer • Two parts • Country-specific projects • Arab region innovation network • Innovation partnerships and networks • national, regional and interregional • Networked innovation model of • regional collaboration • Duration • 26 months in each country • 38 months for entire region

45. Establishment of TTOs in Arab Region – Project Partners • Core Project Partners – Parties of the Framework Project Agreement • Governments of Participating Countries; • Donor Partners; • Arab Science and Technology Foundation (ASTF); • WIPO (as executive agent). • Other Partners • Potential contributors with expert experience in relevant areas ; • Professional associations; • Scientific foundations; • Private sector ; • Financial institutions; • NGOs; • International organizations; • Other partners.

46. Institutional IP Policies • Model of Intellectual Property Policy for Universities and Research Institutions • Prepared by the WIPO Department for Transition and Developed Countries • http://www.wipo.int/export/sites/www/dcea/en/pdf/Tool_Cover_Model_Policy-Eng.pdf

47. Countries where WIPO has implemented capacity-building programs Europe Arab Countries Central and Latin America Asia Pacific Africa

48. Thank you ! Olga SpasicHead Innovation Structures Section Innovation Divisionolga.spasic@wipo.int