IP and commercialisation training for university researchers, staff and students
Immediate benefits of this training:
- With enhanced IP management and commercialisation skills, you’ll have broader career prospects.
- With increased understanding of key issues and terminology, you’ll interact more easily and productively with commercialisation and industry professionals.
Long-term benefits of well-managed IP protection and commercialisation:
- You’ll have the satisfaction of seeing your innovations put to use in the wider world, while still being able to publish and present your work in academic journals and forums.
- You’ll find new avenues for research and additional funding sources by increasing engagement with industry.
- As an IP creator, you may receive financial returns.
- Society will benefit from innovative products and services that improve lives, and from the creation of new industries and jobs.
What will you learn from this training?
You’ll learn about Intellectual Property (IP), its protection and commercialisation, including:
- key IP management issues
- types of IP protection, and how to choose between them
- the ideal commercialisation process for universities, and who’s involved
- commercialisation vehicles and pathways, and how to choose between them
- where to find assistance with all of the above.
How to use this training tool
You don’t have to complete the training in one session – you can save your progress, and come back later.
You’ll need at least one hour to complete the training, but you can take as much time as you need, especially if you want to view the optional, additional information and videos offered throughout the training.
The training includes some simple, multiple-choice exercises, to aid your understanding. When you complete each exercise correctly, you can move on. You can always go back through the training to revise any content as needed.
Part way through the training, you’ll be asked to select your general field of work/study, either:
- Science, Technology, Engineering, Mathematics, Business, Accounting, and related areas; OR
- Humanities and Social Sciences (Arts, Law, Linguistics, Psychology, History, etc).
Subsequent training content is customised according to your selection.
Wireframe for Australia online training tool
2. BASIC CONCEPTS AND ISSUES
2.1 What is Intellectual Property (IP)?
IP is an innovation which is commercially useful or useful to society and protectable. IP is not necessarily technological and at universities may be created within any faculty.
IP may be protected against copying or other unfair use by competitors via a trade secret, copyright, or a legal registration (patent, trade mark or design registration).
From its initial creation, IP may require further development to qualify for legal registration. To be worth protecting legally, IP must be commercially useful, i.e. have potential to generate financial profit.
IP is an asset, meaning it has value and can be sold, licensed or traded. IP is an intangible (not physical) asset. For businesses, other intangible assets are market knowledge, staff expertise and customer goodwill. Tangible assets include real estate and equipment. In recent decades, IP has increased greatly as a percentage of global corporate assets.
2.2 What is IP protection?
IP protection limits copying or other unfair use of the IP by competitors. There are three main categories of protection:
- trade secrets
- legal registrations (patents, trade marks, designs, plant breeders rights)
- automatic legal protection (copyright, circuit layouts)
The types of IP protection within these categories will be explored later in this training. A single item of IP can have multiple protections of various types.
Except in the case of some trade secrets, the owners of protected IP hold legal rights in recognition of the investment they made in developing their IP. These rights give IP owners competitive advantages that reduce the risks of commercialisation, encouraging development of innovations.
Registering a business name, company name or domain name does not provide the rights available under IP protection. In particular, such name registrations do not provide rights to use those names as trade marks.
The concept of protection is so strongly linked to the concept of IP that people often refer to a means of protection (such as a patent) as being the IP, whereas the actual IP is the innovation that the patent protects.
Exercise Group A:
Question 1: IP is protected only by patenting. True or false?
Question 2: Artists or lawyers rarely create IP because their innovations are usually not technological. True or false?
2.3 What is prior art?
Novelty is essential in IP. Prior art is any information (art) that may show that the perceived novelty in potential IP does not actually exist, where that information was publicly available prior to an application for legal protection of the potential IP.
Novelty (and therefore IP) does not exist if, at the time of application for legal IP protection, anyone else has already made public anywhere, a creation with the same properties that were thought to be novel. Application for legal IP protection will be rejected, and any protection already granted may be revoked. Information not publicly available (e.g. secrets, private conversations and correspondence, information covered by confidentiality agreements, etc) is not prior art.
2.4 IP ownership
IP is an asset. Its owner has legal rights to exploit its value. Joint ownership is common.
Legally, IP owners are the ‘applicants’ listed on registered IP protection.
IP may be assigned to a new owner, by being sold or legally given away, or IP rights may be licensed, in which case ownership is unaltered. Licensing is like renting a house: the tenant has user rights but doesn’t own the house. ‘Clean’ IP ownership is clear and uncomplicated, which is highly desirable for commercialisation of the IP. Unfortunately, the ownership of IP created in universities is often ‘unclean’, i.e. there are multiple owners, particularly if the IP arises from R&D involving several organisations or funding sources.
Exercise Group B
2.5 What is commercialisation?
Sometimes commercialisation Is defined as taking products and services to market, which may not involve IP.
For the purposes of this training, commercialisation is defined as the process of taking IP to market for financial profit. This focus is appropriate because universities need the competitive advantages of IP protection to attract the industry partners they require to achieve commercialisation. More broadly, universities are involved in ‘knowledge transfer’, ‘technology transfer’ or ‘IP transfer’. This includes commercialisation and also taking IP to the wider world for the benefit of society without financial profit.
2.6 Why is commercialisation important to universities, their staff and students?
Commercialisation is important for universities not so much for income generation, but because:
- being highly dependent on taxpayer support, universities have a responsibility to transfer their research results into society for its benefit, improving lives and creating new industries and jobs
- it increases industry engagement, which helps universities to find new R&D avenues, collaborators and funding, and enhance the career prospects of staff and students.
Critically, commercialisation does not prohibit publication and peer review of IP.
Immediately after application is made for IP protection, the IP can be disclosed (e.g. published or discussed publicly), because only prior disclosures disallow the application. As a means of disseminating research results, commercialisation can be more extensive and enduring than academic publication and networking.
The potential personal benefits from commercialisation for university staff and students include:
- fresh perspectives on R&D opportunities
- additional R&D funding sources
- access to industry knowledge and expertise
- increased job satisfaction from greater development and dissemination of innovations
- enhanced employment opportunities within and beyond universities
- occasionally, a share of financial profits
3. TYPES OF IP PROTECTION
3.1 Types of IP protection: Summary
The information in the following table applies to Australia, but IP protection types are similar in most other countries. Applications for IP protection are made separately in each desired territory (usually a country), known as a ‘jurisdiction’. Legal rights apply territorially, but international treaties and conventions provide some rights across territories.
| Type | Application Process | Protection Covers | Terms | Legal rights of IP owner/s |
| Secrets | Informal, automatic. Confidentiality Agreements may help | Anything that can be kept secret from the public | Potentially unlimited | None, except that common law protects the IP owner according to any Confidentiality Agreement, and then only with respect to the other parties to the agreement |
| Patents | Apply via IP Australia | Novel and unique features as claimed for an invention | 20 years (25 years for pharma) | Exclusive rights to make or market products or services incorporating the IP |
| Trade marks | Apply via IP Australia | Brand identity such as a letter, words, logos, sound, colours, scents | Initially 10 years, can be renewed indefinitely, if used | Exclusive rights to make or market products or services incorporating the IP |
| Designs | Apply via IP Australia | Novel and distinctive features of appearance, e.g. shape | Initially 5 years, renewable to 10 years maximum total | Exclusive rights to make or market products or services incorporating the IP |
| Plant breeders’ rights | Apply via IP Australia | Varieties of plants that are novel, distinct, uniform and stable | 25 years for trees and grapes, 20 years for other species | Exclusive rights to make or market products or services incorporating the IP |
| Copyright | Automatic legal rights when documented on paper or electronically | Original expression of ideas, not the ideas themselves | Typically, 70 years from the year of the creator’s death | Exclusive rights to license the IP in regards to copying, performing (for copyright), manufacturing (for circuit layouts), disseminating or adapting it. |
| Circuit layouts | Automatic legal rights when documented on paper or electronically | Original layout designs or plans of integrated circuits | 20 years from the year of creating layout or making the integrated circuit | Exclusive rights to license the IP in regards to copying, performing (for copyright), manufacturing (for circuit layouts), disseminating or adapting it. |
3.2 Secrets and disclosures
All IP, except sometimes that protected by copyright, is initially a secret known only to the creator and any associates. A trade secret is IP that is kept secret from the public long-term, as a deliberate protection mechanism. A trade secret cannot co-exist with granted legal protection for the same IP, because that IP is placed in the public domain during the grant process.
Examples of famous trade secrets are the recipes or formulae for Kentucky Fried Chicken, Coca Cola, Listerine, and WD-40.
IP disclosure
IP is ‘disclosed’ when it is disseminated publicly in anyway, anywhere, by anybody, at any time. Disclosures may include:
- a verbal discussion, including presentations on the university campus
- conference presentations or posters
- journal, magazine, newspaper, or noticeboard articles
- posts on the internet, social media or the university Intranet
- any commercial sale of a product or service based on the IP
- draft papers or abstracts submitted to journals or conference organisers, and
- descriptions included in funding applications
A ‘prior disclosure’ occurs when the disclosure pre-dates either an application for legally registered IP protection, or the documentation of IP for automatic legal protection. When this happens, the application or the documentation lacks novelty, so the subject is not IP and protection of any type is ruled out.
Prior disclosures are highly unfavourable to IP owners, who lose the competitive advantages of IP protection that make successful IP commercialisation more likely. Researchers and students should seek the advice of the university’s technology transfer office (TTO) as soon as they believe they have developed any potential IP.
If done properly, the IP protection process does not stifle the academic process by preventing dissemination of research results. It just requires that any application for legally registered IP protection precedes any disclosure through academic publication or networking.
Exercise Group C
3.3.1 What is a patent?
A patent is a type of legally registered IP protection applicable only to innovations that are inventive (i.e. not obvious to one skilled in the relevant field) and useful, including devices, methods, processes and substances.
The patent application process is explained later in this training. A patent application is ‘pending’ while it is formally considered for grant.
When granted, a patent provides exclusive rights (a monopoly) to use, manufacture and market the IP-based products or services in the jurisdiction of the registration (e.g. Australia). In each jurisdiction, to be granted these rights, a separate patent application must be made; global patents do not exist. The term of a standard patent is 20 years. Pharmaceutical patents can last up to 25 years.
Patents are the most legally robust and therefore valuable type of IP protection, partly because they cover inventions, but also because the patenting process requires precise definition of the IP to underpin the legal rights.
www.youtube.com/user/IPAustralia/videos
3.3.2 The patenting process
The typical patenting process in a university is:
- The IP creator makes a confidential disclosure of the IP to the university’s TTO, tentatively defining the IP.
- With support from the TTO, the IP creator conducts a prior art novelty search. If the result favours it, a prior art inventiveness search follows. The results of these searches may induce the creator to redefine the tentative IP.
- The TTO contacts a patent attorney, who drafts a patent specification, preferably with claims, based on information provided by the IP creator. The IP creator reviews the draft and may suggest amendments.
- Under instruction from the TTO, the patent attorney files a patent application and the specification with the Government registering agency for the desired jurisdiction (e.g. IP Australia). This sets the critical ‘priority date’; any information disclosed after this date is not prior art in respect of this IP and cannot be used to invalidate its patentability. Under international agreements, a patent application in any jurisdiction sets the priority date in almost all jurisdictions.
A patent is ‘pending’ when filed but not yet granted or abandoned.
Three filing options/phases exist and are usually taken in the order shown below, though the first two are not mandatory. Separate filings for the same specification can exist simultaneously in two or three phases when two or more jurisdictions are desired.
Provisional application
Claims are not mandatory because they are not examined in this phase. This is the lowest cost option for establishing the critical priority date, and it may be used to defer subsequent phases and costs by up to 12 months. By that time, one or both types of non-provisional (‘complete’) applications, B and/or C below, must be filed, or the application must be abandoned, or recommenced (‘rolled over’). Unlike B and C, legal rights are not enforceable retrospectively to the filing date if a patent is eventually granted.
PCT (International) application
All major jurisdictions are signatories to the Patent Cooperation Treaty (PCT). A patent is not granted for a PCT application, but in all jurisdictions that later grant national/regional patents, legal rights are enforceable retrospectively to the PCT application date. Claims are mandatory in a PCT application and a preliminary examination of the claims occurs, which defers the deadline for the national/regional application by 18 months, i.e. a total of 30 months if added to A. Although it adds slightly to overall costs, deferment of the high national/regional costs is often desirable.
National/regional application
This must be filed in the desired jurisdiction, and separate applications must be filed if protection in several jurisdictions is desired. Claims are mandatory. Choosing this option alone is the fastest way to obtain a patent, subject to examination. If A and/or B are bypassed, costs overall are slightly less, but the major costs are not deferred.
For more information about jurisdictions other than Australia, visit http://www.wipo.int/directory/en/
5. The IP owner may now or later disclose the IP (through publication in an academic journal, for example) but should exercise caution if the IP is still evolving with ongoing R&D.
6. The content of the application is published by the registering agency about 18 months after its priority date. If an application is meanwhile abandoned or cancelled, it is not published. This gives IP owners some time to abandon the application if they wish to maintain secret IP.
7. In the national/regional phase, the claims are examined for patentability. The IP creators are usually required to assist the patent attorney to respond if claims are rejected or questioned. The applicant may amend the claims. Several rounds of examinations are common. This stage of the process, the prosecution, may take several years: 3-5 in Australia and the USA, 5-7 in Europe, 10+ years in less developed countries.
8. If a patent is granted, no further changes to the claims are allowed. The grant is made public so that competitors may challenge the patent’s validity.
9. Maintenance fees must be paid throughout the term of the patent (20 years) to prevent it lapsing. In Australia, these are payable annually.
3.3.3 Patent costs
Patenting is by far the most expensive type of IP protection. For example, a single patent granted and maintained for 20 years in Australia, USA and four countries in western Europe will typically cost AUD140000 to 250000 (in 2018). It will cost significantly more if any appeal against rejection is required, or if currency exchange rates change adversely.
In the absence of support from an industry partner (indicating that the commercial viability of the IP is poor), a university will probably not proceed to the PCT and/or national/regional phases of the patent application. This imposes significant time constraints on all involved due to the limited lifetimes of provisional patent applications and PCT applications (12 and 18 months respectively).
Exercise Group D
3.4 What is a trade mark?
A trade mark distinguishes its owner’s goods and services from those of another business. It can be a letter, number, word, phrase, sound, smell, shape, logo, picture, movement, aspect of packaging, or a combination of these, e.g. the flying red kangaroo on the tail of Qantas aircraft.
www.youtube.com/user/IPAustralia/videos
3.5 What is a design?
In IP terms, the design of a product comprises the novel and distinctive features of its shape, configuration, pattern or ornamentation, which give a product a unique visual appearance. It does not include how a product works, its material composition or internal structure.
The owner of a registered design has exclusive rights to use, license or sell it.
image
www.youtube.com/user/IPAustralia/videos
Exercise Group E
3.6 What are plant breeders’ rights (PBR)?
A breeder of a novel variety of plant that is distinct, uniform and stable, can register exclusive rights to use, license or sell the plant variety.
www.youtube.com/user/IPAustralia/videos
3.7 What is copyright?
Copyright is an automatic legal IP protection that does not require registration or fees. It protects the owner’s original expression of ideas and information, not the ideas and information themselves.
In Australia, copyright protection commences instantly upon documented novel expression of ideas and information. Copyright is distinct from the item that contains it, and they often have different owners; e.g. an author may own the copyright for the text in a book but may not own any physical copies of the book.
Copyright is the type of IP protection best suited to artistic creations, using that term broadly. Drawings, art, literature, music, film, broadcasts and computer programs are examples of items that contain protectable expressions.
Exercise Group F
3.8 What are circuit layouts?
Circuit layouts are novel, two-dimensional layout designs or plans (topographies) of three-dimensional integrated circuits used in computers and equipment that relies on computers (e.g. modern cars, televisions, washing machines, medical devices, etc).
Circuit layouts have automatic legal IP protection (like copyright) that does not require registration or fees.
4. COMMERCIALISATION
4.1 Who participates in commercialising universities’ IP?
Participants include:
IP owners
Because IP owners have controlling rights over their IP, they must be involved in its commercialisation. Undergraduate students often own IP that they create, but otherwise, IP created within a university is usually partly or fully owned by the university (at least initially). Other initial owners may include R&D collaborators and funders, and any external party who contracted the university to conduct R&D from which the IP arose. As commercialisation proceeds, ownership of the IP often changes.
IP creators
These people have the best understanding of the IP and play a major role in defining it for IP protection. They may refine the IP with further R&D and assist or participate in other commercialisation activities.
University Technology Transfer Offices (TTOs)
Also known as the Research and Innovation Office, Industry Engagement Office, Commercialisation Office, etc, the TTO is a specialised unit within the university responsible for managing the university’s IP and commercialisation activities, with the assistance of IP creators (the technical experts). Related legal services may be supplied by the TTO, or another university department, or by external providers.
Faculty and school administrators and R&D supervisors
Faculties or schools should be, at least, informed of commercialisation intentions and actions related to any part of their R&D, as these can affect their other activities.
IP attorneys
These people manage IP protection under instructions from their clients, the IP owners. NDAs are unnecessary with attorneys due to professional regulations. Also, client legal privilege means that communications between attorneys and clients (IP owners) cannot be used unfavourably for the client in legal proceedings.
Industry partners
Usually, only parties external to the university have the resources required to manufacture, market and distribute products or services based on university IP. Even if they don’t fund commercialisation, these industry partners to the university may become full or part-owners, or licensees of the IP, in exchange for providing other essential resources.
Commercialisation funders
These people or organisations provide funding for commercialisation after essential R&D is complete. They are usually not the same entities as the initial R&D funders. Funding options are explored later in this training.
https://www.youtube.com/watch?v=rPuImnLBcnc
4.2 The early commercialisation process
For universities, the typical steps in early commercialisation, in an ideal sequence, are:
image
1. IP identification
Researchers and students should seek the advice of the university’s technology transfer office (TTO) as soon as they believe they have developed any potential IP. TTOs often expect researchers and students to use an official ‘IP Notification Form’ for this purpose.
2. IP definition
A commercialisation manager from the TTO works with the IP creators to define exactly what constitutes the potential IP. The perceived uses of the potential IP are described, and the identities of the IP creators are confirmed. Prior art searches are conducted to determine whether novelty, and preferably inventiveness, probably exist.
3. Preliminary IP evaluation
If the results of the prior art searches are favourable, the probable commercial value and social impact of the IP is assessed to determine if commercialisation is likely to be worthwhile. Key factors are: any potentially fatal obstacles such as regulatory hurdles, the probable strength of IP protection, and likely sales. Being skilled in the relevant work area, the IP creators assist the TTO with this evaluation.
4. Application for IP protection
The TTO usually arranges for IP creators employed by the university to confirm assignment of the IP to the university, even if their employment contracts or university policy suggest this is unnecessary. This clearly identifies the university as the legal applicant for IP protection. The application process for each type of IP protection has been described previously in this training.
5. Basic commercialisation plan
With assistance from IP creators, the TTO develops a plan describing the perceived best commercialisation pathway/vehicle (more on this later) and validating the preliminary evaluation with additional evidence. The commercialisation plan for each IP is tailored to its unique characteristics. This plan supports discussions – usually involving NDAs – with potential collaborators, partners and funders.
6. Industry engagement
If no further R&D is necessary and the commercialisation plan is mature, the IP is ‘commercialisation ready’. Working with the IP creators, the TTO identifies potential industry partners with relevant market access and expertise, and develops a pitch to engage their interest in commercialising the university’s IP. Potential commercialisation partners include existing R&D funders/collaborators, and businesses without any prior connection to the university.
7. Contract negotiation, execution and exit
Universities may access seed funding for commercialisation ventures, but cannot provide the subsequent, significant investment required for long-term business growth. Therefore, the TTO will attempt to arrange licensing or sale of the university’s IP to one or more suitable businesses via a negotiated contract. However, the university will contractually preserve the rights to continue using the IP for teaching and R&D.
The IP licensee or purchaser may be an established business, or a new, affiliated company (a ‘spin-off’ from the established business), or a new, independent company (a ‘start-up’). Each party to the contract conducts ‘due diligence’ (independently investigates the risks).
This step of the process can take a long time and often fails because substantial financial commitments are required from external parties, who may deem the risks too great. To assist in risk reduction, the university may cooperate with a business to apply for government grants for partial, short-term funding of further steps towards commercialisation. Universities usually cease active participation in commercialisation when this step concludes successfully or otherwise, but they may continue administrative activities, including managing IP protection and income and distributing a percentage of net returns to IP creators. IP creators may be involved in ongoing patent prosecutions.
https://www.youtube.com/watch?v=UMCs4Zcka6Y
Exercise Group G
4.3 Commercialisation pathways and vehicles
Commercialisation pathways and vehicles include:
- IP licensing
- IP assignment
- start-ups and spin-offs
- joint ventures, and
- direct commercial use of IP developed in-house.
The choice of commercialisation pathway and/or vehicle depends on practical considerations broader than legal issues, particularly marketing and manufacturing.
Most universities prefer to license, rather than sell, IP rights to third parties, ensuring that if the commercialisation venture is unsuccessful, control of the IP returns to the university. This is particularly important when the licensee is a new or small company where the risk of failure is high.
The common commercialisation choices for universities are summarised below.
| Commercialisation pathway/vehicle | Advantages for universities | Disadvantages for universities |
| IP licensing | Low expenditure and risk. Retain ownership and significant control of the IP | Administration may require complex auditing of sales |
| IP assignment | Quick exit, no risk | Less profitable. Loss of ownership and control of the IP |
| Start-ups and spin-offs | Created to suit the IP, free of encumbrances of established businesses | Lack of funding, experience and stability means high risk of failure |
Exercise Group H
4.4 Commercialisation funding for companies
Funding rarely comes in a single lump for commercialisation ventures; multiple funding sources and/or rounds are usually required. Potential funding sources for companies engaged in commercialisation of IP include government, angel investors, venture capitalists and crowdfunding.
4.5 Where to find help with IP management and early commercialisation
The following key documents can help to clarify the rights and responsibilities of IP creators and owners in universities:
- employment contracts
- the university’s IP Policy, a.k.a. the Commercialisation Policy, Knowledge Transfer Policy, Industry Engagement Policy, or similar.
- contracts with external parties collaborating in and/or funding university R&D.
The following people provide assistance and must be involved in IP commercialisation activities involving IP created at universities:
- University Technology Transfer Office (TTO) The TTO guides and assists researchers, other staff and students to identify, protect and commercialise IP owned by the university. In most cases, IP created within the university will be fully or partly owned by the university, so the TTO’s involvement is mandatory.
- IP attorneys Most universities use external rather than in-house IP attorneys. IP attorneys are essential because of the highly professional, specialised knowledge and structures required for IP protection. The TTO will manage communications with IP attorneys on behalf of the university.
Other organisations that can also assist with IP management and early commercialisation:
- IP Australia, the Australian Government agency that administers IP rights and legislation. [weblink]
- Business Incubation Centres, also known as Innovation Centres, Business Start-Up Centres, etc. [weblinks]
- Various Australian Government and State Government Offices [weblinks]
