In his Autumn Statement on 3 December 2014, the Chancellor, announced £10m of grant funding for the testing of innovative driverless cars across four cities in the UK: London, Milton Keynes and Coventry (as one project) and Bristol. The funding is to be provided by Innovate UK , the UK’s innovation agency.
In Bristol, the project (known as VENTURER) will see the University of Bristol working in collaboration with established private sector companies Atkins, BAE Systems and Williams Advanced Engineering; tech start up Fusion Processing; insurance giant AXA; public sector bodies Bristol City Council and South Gloucestershire Council as well as the West of England Local Enterprise Partnership, The University of the West of England and the Bristol Robotics Laboratory (itself a collaboration between The University of Bristol and The University of the West of England).
The VENTURER project team will develop technologies that will make driverless cars a viable alternative to self-driven cars whilst, at the same time, investigating the legal and insurance obstacles to putting driverless cars on UK roads. This is just one of many ‘knowledge transfer’ projects that the government is supporting with grant funding from Innovate UK. As the government itself points out, ‘The UK excels in research, development and innovation, and innovative companies are an important contributor to economic growth. We want to use our talent to make the UK the best place in the world to run an innovative business or service.’ (www.gov.uk)
Sir Andrew Witty went a step further in his October 2013 report into Universities and Growth, in which he stated ‘Universities have an extraordinary potential to enhance economic growth’.
The university perspective
For many years universities and individual academics have been keen to see their research outputs used outside academia. More recently, UK universities are being asked to demonstrate impact from their research and a new system for assessing the quality of research in the UK, known as the Research Excellence Framework 2014 (REF2014), now requires universities to submit impact case studies to provide accountability for the public investment in research.
Dr Matt Butcher, Research Commercialisation Manager at the University of Bristol’s Research & Enterprise Development team says: “Knowledge transfer has always been an important activity at the University of Bristol and it has been key to a number of impact case studies submitted to the REF2014.”
One example of a Bristol impact case study is the successful commercialisation of technology for cleaning pipes with ice slurries, (known as ‘ice-pigging’), through the patenting of ice-pigging technology and the subsequent formation of a spin-out company, PCIP Ltd, to commercialise the IP. The technology has wide-reaching application for the cleaning of pipes in the water, oil and gas energy and other sectors. In November this year we acted for the University and Professor Joe Quarini on the sale of PCIP to water management specialists, Aqualogy Environment Limited (part of global water giant, Agbar). This is a great example of the role that a university can play in inventing, commercialising and ultimately selling a technology to commercial enterprises with more potential to fully exploit its value.
Also during 2014, Ultrahaptics Limited (a University of Bristol spin out) benefitted from a £600,000 investment by IP Group. Ultrahaptics is a leading developer of technology that uses ultrasound to create tactile sensations in mid-air. The technology is based on research developed by the University’s Department of Computer Science and it will be licensed into various markets including consumer electronics, household appliances and the automotive industry. Its technology could be a ‘game-changer’ in the way in which we engage with other technology and equipment.
Commercialising the research
If universities, spin-outs and other technology-led SMEs are to have a chance of maximising the commercial value of their intellectual property (IP), they will need take a number of practical steps, including:
(1) Consider trade mark searches to check that your chosen name does not clash with someone else’s.
(2) Consider protecting trademarks and designs by registering them. This makes it easier and cheaper to challenge infringers, and can have a useful deterrent effect.
(3) Consider protecting inventions by filing patent applications. Patents are expensive, but they are there to provide a valuable monopoly to exploit an invention. Until a decision is taken as to whether patent applications are to be filed, it is vital to keep the invention secret (or to disclose it only under a confidentiality agreement).
(4) Take reasonable efforts to clarify who owns the IP. For example, under English law, contractors are presumed to own any intellectual property that they create. So if the venture outsources a task that involves the creation of IP, the contractor will own that IP unless there is a written contract stating that it is the property of the venture itself. Furthermore, the venture should ensure that all of its employees and officers sign appropriate contracts that provide that all IP generated by them in the course of their duties is owned by the venture. Falling foul of these issues can cause delays and valuation concerns on any investment or sale.
Putting the right spin-out structure in place
Universities have been spinning out technology and IP for many years. Typically, the legal entity chosen is a private company limited by shares, with shares often issued to the university, the founder academics or postgraduate students and, in some cases, third-party investor(s). Whilst this may be a well-trodden path, it is always advisable to obtain legal and tax advice on the proposed structure and the legal documentation. There are specific taxation risks (and deadlines) associated with the issue of shares to employees, directors and non-executive directors, so taxation advice is important.
University business incubators
The UK is a great place to start up a business, particularly in the hi-tech or research-led innovation sector partly because of the quality of our universities but also because we are blessed with numerous business incubators, staffed and supported by a combination of academics, ex-academics and entrepreneurs who’ve ‘been there and done it’.
As many commentators predicted, the economic downturn facilitated the birth of a new generation of technology start-ups across the UK. No mention of business incubators is complete without highlighting the contribution made by SETsquared. SETsquared is an innovation partnership between the Universities of Bristol, Bath, Exeter, Southampton and Surrey and was recently ranked the no.1 University business incubator in Europe and is ranked no.2 globally. An exciting development is the announcement on 26 November 2014, of a £3.2m project (iCURE) which aims to ‘bridge the valley of death’ identified by the house of Commons Science and Technology Select Committee.
iCURE will see HEFCE, Innovate UK and SETsquared work together on a pilot to tackle issues such as the importance of universities in managing intellectual property, attention to the availability of ‘proof of concept’ funding and to help accelerate research being successfully commercialised.
Both Ultrahaptics and PCIP are great examples of the benefits that knowledge transfer can bring to the UK and global economies. There will be countless other examples, in universities across the country.
To quote Sir Andrew Witty again: ‘The future of the UK economy will in large part come from fast-growing SMEs. The fastest-growing SMEs, generating half of all new jobs, are those that are driven by innovation… But the UK lags behind many of our competitors in being able to produce fast-growing, innovation-rich SMEs with the potential to break into global markets and supply chains.’
In the UK, we have world-leading universities and research centres, some of the brightest academics and entrepreneurs on the planet, world-leading technology incubators, a public sector that is making significant grant funding available to support knowledge transfer and professional advisers with a desire to support all of the above. We all have a role to play in ensuring that the UK continues to be seen as a global leader in technology and innovation.
Nathan Guest is a partner and leads both the Corporate Team and the Technology sector at national law firm Veale Wasbrough Vizards, which is number one rated for work in the education sector.
For further information or advice on any issues relating to the commercialisation of university intellectual property or the support of spin outs or technology start ups, please contact Nathan on 0117 925 20 20 or at email@example.com.