“Intellectual Asset Management for Universities”: The new guide by IPO - guest posting by Mehmet Artemel, Bogazici University, Istanbul

I am delighted to be able to publish a review of the IPO's recent publication by my good friend Mehmet Artemel from Istanbul - who knows much more about the topic, and is therefore much better qualified to comment on the guide, than me ... and he's probably less prejudiced about things like institutions changing their names and talk of "intellectual assets" than I am, too.

Published in May 2011, the new guide by the UK Intellectual Property Office (IPO) has been produced by a committee of representatives from PraxisUnico, the Higher Education Funding Council for England (HEFCE), Universities UK, the Association for University Research and Industry Links (AURIL), the Biotechnology and Biological Sciences Research Council (BBSRC), and the Department of Business, Innovation and Skills (BIS) under the chairmanship of IPO.

The Guide comprises 45 pages in total including five chapters and three annexes. The length of each chapter ranges between 3 to 7 pages i.e. chapters 1 and 3, and chapter 4, respectively. As it has already been noted by Professor Jeremy Phillips, the Guide is “… well written and clearly presented; some technical stuff, such as the explanation of the different Lambert agreements, is left to the annexes” (see IP finance, Universities and intellectual asset management: a guide, Monday, 23 May 2011, available at http://ipfinance.blogspot.com/2011/05/universities-and-intellectual-asset.html).

Essential IP terms and knowledge/technology transfer related expressions are explained throughout the Guide, as they arise, in a plain and straightforward language. The Guide is, indeed, so readable that there may exist a fair chance of overlooking some of the valuable practical advice that is recommended as well as the highlighted potential pitfalls that exist along the path of developing and implementing a successful IP strategy for universities. Likewise, much of the less prominent but equally significant, ancillary issues that are mentioned in the Guide within the context of intellectual asset management policies at universities risk escaping the reader’s attention. It may, therefore, not be such a bad idea, for those who are truly interested in the subject, to prepare their own checklists where relevant. Talking about checklists, there is a set of self-reminder questions at the end of each chapter that are listed inside a box that is superimposed on a photograph. Readers, it is suggested, might be advised to prepare their own checklists instead of confining themselves to the series of questions (and one checklist proper, at the end of chapter 3) that are provided in the Guide.

The scope of the Guide
The Guide does not set out to “provide an IP strategy that can be applied across all institutions” (Executive Summary, p. 2; Chapter 1, p. 9) nor contend to be a definitive or comprehensive tool for the management of IP. Quite to the contrary, an admission, which is almost reminiscent of a disclaimer, reads as follows:

“... this Guide is concerned with the management of IP in a narrow sense.” (Chapter 5, p. 29)

As is stated in the Executive Summary, the Guide is written with primarily senior administrators in higher education and research institutions in mind:

“This Guide is for vice-chancellors, senior decision makers and senior managers in universities and is intended to help them set strategies to optimise the benefits from the intellectual assets created by their staff and students.” (Executive Summary, p. 2)

Presumably, with this audience in mind, and indeed on account of the nature of the subject, management related terminology dominates the language of the text. Equally, definitions of intellectual property related terms which are provided throughout the text are indicative of the fact that the Guide does not, rightly so, assume that all readers should necessarily be conversant with IP terminology.

As T. S. Eliot puts it, “last year’s words belong to last year’s language” and hence, therefore, the stress on ‘knowledge transfer’ as opposed to ‘technology transfer’ prevails; perhaps, not surprising considering that IP commercialisation has tended to become invariably associated with ‘technology transfer’ and by extension with ‘hard IP’ or patents, which in the past might have had the undesired effect that led academics in certain disciplines to be under the impression that their contribution to the academe was deemed less significant. This may be interpreted as another sign of the Guide’s all-embracing approach to welcoming IP related contributions that may derive from diverse disciplines in academia as is revealed from the following:

“Firstly, it should be apparent that IP is not merely that which is formally protected for example by patents. Indeed the majority holding of a university’s IP is likely to be in teaching materials, software and output works such as literature or film or sound in the case of arts centred-[sic] universities.” (Chapter 4, p. 23)

The predominant use of the term “knowledge transfer” or “knowledge exchange” in the Guide accords, moreover, with the nomenclature in the European Commission Recommendation of 2008, on “The management of intellectual property in knowledge transfer activities and Code of Practice for universities and other public research organisations” (provided conveniently under Annex A of the Guide) where there are 37 references to “knowledge transfer” and only a single mention of the term “technology transfer”.

The rationale for the new Guide
The Lambert Tool Kit (1st edition, 2005; 2nd edition, 2008) and the European Commission Recommendation C (2008) 1329 referred to above, are reported in the Guide as “the two major advancements” that have taken place in relation to the management of IP since the publication of the IPO’s original Guide in 2003. (Chapter 4, p. 21)

The guide is written in response to certain changes that have been observed in the field of knowledge transfer over the last decade, which are identified in the report as follows:

• There have been many changes in the world of IP commercialisation and in the context in which it is undertaken (Chapter 1, p. 8)
• Developments in innovation theory; the growth of the “open innovation” paradigm; evolution of ‘mass collaboration’ and ‘user-generated’ innovation that is facilitated by new social media tools; the growth in value of non-IP business assets such as business models (Chapter 1, p. 8) 
• The need for universities to recognise that that the purpose of the IP created by them is “to create wider social and economic benefit, and not only revenue generation” (Chapter 1, p. 9) 
• The change “in the role of the knowledge transfer office which no longer focuses only on an intellectual property professional service” but has “a broader role in the innovation system” (Chapter 1, p. 9) 

In sum, as the Guide puts it:

“These changes have forced new reflections on the content of the Guide, particularly as IP commercialisation has become more complex. Each institution needs clear objectives in its IP strategy, and this Guide aims to demonstrate how these objectives should be developed within an individual institution in order to gain the maximum overall benefit from its IP.” (Chapter 1, p. 9; emphasis supplied)

The comparators for the Guide in its assessment of the changes that have occurred over time are the findings and observations made in its own former guide that was published in 2003. Perplexingly, unlike other reports that have been mentioned in the text for which comprehensive references and links are provided, the new Guide appears to be resolute in not supplying a full reference to the original guide anywhere in the report, save for furtive allusions as follows: “Since the first IPO Guide in 2003 ...” (Foreword, p. 1); “The first edition of this Guide was published in 2003 ...” (Chapter 1, p. 8); “When the previous Guide was written ...” (Chapter 2, p. 15); “... since the original edition of this booklet was published in 2003” (Chapter 4, p. 21).

“The Purpose of this Guide”
The above title, which happens to be the very first subheading under Chapter 1, may conveniently serve as a useful section heading for the purposes of this review, to identify the objectives which the Guide has set itself.

The Guide is written with a view to (emphasis supplied)

• “... assist in the generation of IP policies that allow each institution to seize the opportunity and meet the responsibility to use their IP to secure maximum benefit for the economy and society” (Foreword, p. 1) 
• “... help senior university managers set strategies to optimise the benefits from the intellectual assets created by their staff and students” (Chapter 1, p. 7) 
• “... assist institutions to develop an intellectual property strategy that is consistent with their wider policy framework, their organisation, and their contribution to the economy and society” (Chapter 1, p. 7) 
• “... demonstrate how these objectives should be developed within an individual institution in order to gain the maximum overall benefit from its IP” (Chapter 1, p. 9) 
• “... demonstrate how the maximum value can be gained from IP...” (Chapter 1, p. 9) 
• “... assist in the design of internal measures and systems” (Chapter 5, p. 29)

The Role of Universities

The Guide, as will be seen from the above section, does not shy away from laying down certain responsibilities for universities unequivocally which it sees as fundamental for the benefit of the economy and society at large. Accordingly, universities are expected to:

• Act as “stewards of ... knowledge for all”, and consequently “to find ways to use this remarkable knowledge pool ever more creatively” (Chapter 2, p. 11) 
• Ensure “that IP in the UK is used to best effect for innovation and growth”, in their capacity as “key players in [the] economy” (Chapter 4, p. 21) 
• Use for public benefit the IP that they generate, based on “the overriding principle of a universities’ [sic] charitable status” (Chapter 4, p. 21)

An “individual business model”
The sensitive tone of the Guide would seem to transpire through the careful choice of the language adopted in the text. Cognizant of underlying tensions that may exist in different academic institutions vis-à-vis commercialisation of IP, the Guide is keen to draw a distinction between “individual” (Chapter 1, p. 9) business models that are “consistent with the institutional structure” (Executive Summary, page 3) as opposed to a uniform “IP strategy that can be applied across all institutions” (Executive Summary, p. 2).

It is stressed again and again throughout the text that the recommendations in the Guide are not intended to act as a blueprint that is to be adopted blindly by all universities in a uniform manner. This is one of the points on which the Guide deserves to be given full credit for. The expertise and inclination for which different universities might have become associated with is recognised as a starting point and accordingly the corresponding need to develop appropriate customised strategies that accord with each institution’s mission is acknowledged. This is expressed succinctly in the Executive Summary at page 3 in the following words:

“This Guide illustrates the need for universities to look at their IP policies in relation to their individual business models.” (emphasis supplied)

The Guide frequently reminds readers of this premise, in every single chapter (see Executive Summary at pp. 2 and 3; in Chapter 1 at p. 9; in Chapter 2 at p. 12; in Chapter 3 at p. 17; in Chapter 4 at p. 22; and in Chapter 5 at p. 31) that deals with another facet of intellectual asset management, by repeating that “there is no ‘one size fits all’ approach to IP management”. (Chapter 1, p. 9)

 

Common ‘areas’ for all universities

According to the Guide, notwithstanding the requirement for a customised IP policy that is in tandem with each university’s “own individual mission, those areas where policies are needed are the same for all” (Executive Summary, p. 3). Areas that are identified in common irrespective of the differences that may exist between universities are such as the right to ownership of IP by staff or students (Ibid).

A roadmap for developing an effective IP strategy

At the risk of missing out some of the valuable information that is stacked under some subheadings in the Guide, it might, nonetheless, prove a useful exercise to attempt to sketch out a roadmap that follows the steps, as recommended in the Guide, to be taken for the development and implementation of an IP strategy in respect of those areas that are common to all universities.

The different stages in the shaping of an IP policy as well as the recommendations and cautions that are provided in the text have been either paraphrased or quoted as far as space would allow for the purposes of this review. References are given for further details in the Guide. The fact that the number of steps, as determined by the reviewer, happens to be the same as the total number of the chapters in the Guide is purely coincidental, and should not, therefore, confuse the reader.

STEP 1

Each institution must establish its own goals in line with its mission (Chapter 1, p.7; Chapter 2, pp. 11, 12, 15, 16; Chapter 4, p. 21; Chapter 5, p. 32)

Caution: A “one size fits all approach” will not work (Executive Summary, pp. 2-3; Chapter 1, p. 9; Chapter 2, p. 12; Chapter 3, p. 17; Chapter 4, p. 22; Chapter 5, p. 31)

Example quoted from the Guide:

“A university IP policy should reflect the mission of the institution. Whilst the mission of the University of the Arts London, for example, will differ significantly from that of Imperial College London, their IP policies will have some elements in common but will also have differences.” (Chapter 3, p. 17)

• STEP 2

• Each university must determine its own business model (Executive Summary, pp.2-3; Chapter 1, p.9; Chapter 2, pp.11, 12, 15; Chapter 3, p. 17) 
• The IP policy must follow the business model of the university Chapter 3, p. 17)

Caution: Each university’s IP strategy will differ according to its overall business model (Executive Summary, p. 3, Chapter 2, p.11)

2.1 Each university must consider the “three main roles for IP in the university business model”, as listed below under 2.1.1 – 2.1.3 (Executive Summary, p. 2; Chapter 2, p. 11)

2.1.1 Role 1: Ensure that ‘freedom to operate’ is maintained (Executive Summary, pp. 2-3; Chapter 2, pp. 11-12; Chapter 4, p. 27)

Caution: Parties (i.e. university and industry) must discuss and identify specific issues instead of seeking a quick solution (Chapter 2, p. 12)

2.1.2 Role 2: Ensure that teaching models and research results are protected (Executive Summary, p. 2; Chapter 1, p. 7; Chapter 2, pp. 11-13; Chapter 4, pp. 22-23)

Caution: University must be careful to protect its ‘background IP’ (Chapter 4, p. 23)

2.1.3 Role 3: Do not overlook IP that might generate revenues (Chapter 2, p. 13-14)

Caution: University must not set unrealistic expectations to profit from IPRs (Chapter 2, p. 14)

STEP 3

IP policy should be focused on three areas in particular, as listed below under 3.1 – 3.3 (Chapter 1, p. 7)

3.1 Area 1: Internal rules (e.g. disclosure, confidentiality, and ownership of IP) (Chapter 3, p. 17)

Caution: Excessive fragmentation of IP ownership should be avoided (Chapter 3, p. 18)

3.2 Area 2: A policy for IP contracts (i.e. collaboration agreements and research contracts); in drafting a policy three key issues must be borne in mind, as listed below under 3.2.1 – 3.2.3 (Executive Summary, p. 3; Chapter 4, p. 21)

3.2.1 Issue 1: Distinguish between ownership and access rights (Executive Summary, p. 3, Chapter 2, pp. 12-13; Chapter 4, pp. 21, 23)

Caution: The rights of access in terms of both present and future potential uses (Chapter 4, pp. 23, 25)

3.2.2 Issue 2: Bear in mind the charitable status of universities and the consequences of commercialisation (Executive Summary, p. 3; Chapter 1, p. 9; Chapter 2, pp. 13, 16; Chapter 4, p. 21)

Caution: IP that results from university research is ultimately “a charitable asset to be used for public benefit”; commercialisation of IP will not by itself mean that “the public use obligation has been fulfilled” (Chapter 1, p. 9; Chapter 4, p. 21)

3.2.3 Issue 3: Uphold ethical standards (Executive Summary, p. 3; Chapter 4, p. 21)

3.3 Area 3: A knowledge exchange policy that lays down a framework for commercialisation and the sharing of financial returns from knowledge transfer activities (Chapter 1, p. 7)

Caution:

• Negotiate IP agreements on a case by case basis (Executive Summary, p. 3); in this context, the Guide recommends the use of The Lambert Tool Kit, which is aimed at “increasing the flow of IP from universities to business” and which represents “a consensus bargain between industry and academia” (Executive Summary, p. 3; Chapter 4, p. 21; see in particular Chapter 4 and Annex A for details of the Lambert system and the Lambert Model Agreements) 
• Be aware of the advantages and disadvantages of alternative forms of commercialisation and determine the type of exploitation, which would be most suitable for the IP (Chapter 3, p. 19) 
• Retain a right to ‘the research exception’ (Chapter 4, p. 28) 
• Beware of the temptation to overvalue contributions to a project when negotiating over shares of potential revenues; the Guide notes, that “There are signs that this is a growing problem in some areas of university-business technology transfer” (Chapter 4, p. 27) 
• Do not be pre-occupied with the anticipated value of IP which can stall negotiations at an early stage (Chapter 4, p. 22) 
• Be careful about the extent of access allowed to background IP (Chapter 4, p. 23) 
• Avoid joint ownership of IP (Chapter 4, p. 23) 

STEP 4
(Note that ‘STEP 4’ does not correspond to Chapter 4 of the Guide but is the 4th stage as identified by the review)

Each university must implement its IP policy across its own subject mix (Chapter 3, p. 17)
Caution: Conflicts may result from IP-related activities “when parts of an institution evolve separately” (Chapter 2, p. 15)

STEP 5

Universities should monitor and evaluate their IP policies (Chapter 5)
Caution:

• Separate evaluation frameworks for revenue and costs should be used (Chapter 5, p. 30) 
• Each university should identify those indicators that are in line with its objectives (Chapter 5, p. 32) 

5.1 The use of performance indicators has two advantages, as listed below under 5.1.1 – 5.1.2 (Chapter 5, p. 29)
Caution:
Research expenditure to output (e.g. patents and licence revenue) ratios should be used with caution (Chapter 5, p. 30)
Where indicators, such as disclosures, patent applications, and patents granted, are to be used as a benchmark for the commercial applicability of research outputs, it would be advisable to evaluate such indicators over a longer period of time (Chapter 5, p. 30)

5.1.1 Advantage 1: Proof of a university’s capability to manage IP effectively (Chapter 5, p. 29)
Caution: The Guide notes that “one of the reasons some sponsors give for seeking to retain ownership of IP is that they lack confidence in the ability of universities to manage the IP” (Chapter 5, p. 29)

5.1.2 Advantage 2: Tools to assist in identifying “problems and opportunities relating to IP management and to modify budgets and strategies accordingly” (Chapter 5, p. 29)
Caution: When making resource/funding allocation decisions, ratios should be interpreted and used with caution (Chapter 5, p. 30)

Concluding remarks

As will be seen from the above outline, the wealth of information that is supplied in the Guide is such as to render the presentation of a more condensed summary almost impossible. This does not come as a surprise, since with the exception of a number of, deliberately repetitive reminders scattered throughout, there appears to be hardly any detail, which could be considered redundant in the text. The Guide should serve as a very useful reference source for university managers and administrators in the UK as well as in other countries, provided that differences which may exist in legal regimes for IP management in universities, such as ‘professor’s privilege’ are kept in mind.