Moving research to the marketplace

As the life sciences industry continues to face the challenge of low public investment and declining returns from research and development, strategic
partnerships with universities will continue to play an important role in sourcing innovative ideas.

Collaborations between industry and universities have long been recognised for their success in supporting the flow and use of technological knowledge from life sciences and advancing the wider economy. Australia’s on-going challenge is to up-end our traditionally poor rates of university-industry collaboration.

Building a successful collaboration

There are common drivers behind a university and a researcher’s decision to invest in the process of commercialising intellectual property (IP), primarily access to funding and reputation. In our experience, some of the key markers of success for these ventures are as follows:

• Do the university’s policies and contracts with key researchers and developers vest in the university? This is vital for investors and provides comfort that the research is genuinely novel and will not infringe third-party IP.
  
• Does the technology or novel research have genuine potential that is capable of IP protection? What impact will that IP protection have on further research in the life sciences? Given that life sciences is inherently global, how will the IP impact the ability of a company and its competitors to do business and make money around the world.
  
• Is there a market proposition that is attractive to customers and investors, and where are the potential markets? If an organisation already exists, perhaps with greater experience and resources, will creating similar technology be worth the financial and personal investment involved (including being distracted from research and academic work)?

Assuming these questions are answered affirmatively, and that there are individuals with management experience committed to commercialisation, there are different pathways, each with their pros and cons. The key options are either licensing direct to industry, or creating a spin-off company to develop and commercialise the IP.

Relevant considerations and traps to avoid:
What is the nature of the IP?

Various forms of background and complementary IP (for example, software, specifications, processes and data) are required for the effective operation of life sciences technology, and there may be potential for new IP to be generated. IP ownership and licensing should be addressed (including university rights to use the IP for teaching and research purposes), particularly if a separate company has been set up or a joint venture entered into.

Are your project milestones (and any triggers for a future transfer or licensing of IP) realistic?

It is vital to consider what happens if a university’s strategy and research aims change, and how it impacts on project time frames. Should an industry partner be able to terminate and clawback IP? Regardless, project milestones should be clear and achievable. Appropriate incentives and structures should be used to ensure that research remains focused on a commercial outcome.

In a similar vein, what happens when key party representatives leave the scene? It is often difficult for parties to recall or objectively interpret original intentions, particularly when it comes to allocating IP ownership or commercialisation profits.

Where do the most appropriate commercialisation resources and networks reside?

Administration, marketing, product development and facilities may well reside outside of the university, so management of these resources is relevant when planning for IP commercialisation and will invariably affect the transaction structure.

This can be resolved through appropriate licensing arrangements, bolstered with milestone investments, structured royalty regimes, and ongoing commitments to develop and commercialise marketable technologies
in a timely manner.

When universities and industry partners engage in proactive preparation and comprehensive market research, and maintain open communication
throughout a project, it has every chance of delivering a mutually beneficial outcome (notwithstanding the current research and development challenges facing the industry) and a tangible benefit to society.

This article was originally published in the Australasian Biotechnology journal, October 2019.

This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.