U of M to offer free research until technology makes money

January 22, 2013
Author: Winnipeg Free Press

The University of Manitoba is embarking on a new approach to technology commercialization -- they're giving it away.

Well, not exactly.

But instead of hard-boiled negotiations between the university and industry partners on royalties and licensing agreements for intellectual property developed in-house, the university will make the research available to partners with no financial commitment until the company itself starts making money from the technology.

It's a bold realignment and an attempt to allow innovative work that is going on at the university to get outside the ivory tower.

"It's a very unique approach, and as far as we know, no one has used this model," said Digvir Jayas, the U of M's vice-president of research.

And there may be even more generous arrangements for local Manitoba companies who can leverage original research conducted at the U of M into some kind of commercial benefit.

In the past, Jayas said, the process often involved protracted negotiations, sometimes with dramatically different views from each side on the ultimate value of the intellectual property (IP).

It became an arduous exercise just to have access to the technology even before the hard work -- and sizable investment -- was undertaken to bring the product to the market.

"The approach we are proposing would allow industry to manage the IP and continue to manage it," Jayas said. "We would not request milestone or upfront payments until the company has started using the IP in their product or for an improved service."

U of M president David Barnard said the university has a role to play in the economic development of the province and it is looking to take an innovative approach to generating some activity.

"One of the goals of the research enterprise, of which there are many, is to have an impact on the economy -- to have IP developed in the university moved from the academy into the economy," he said. "We are hoping this will make the transition easier. From our perspective, we want to see the good work that faculty members do here actually have an impact for good for companies in Manitoba and Canada."

The new direction for its technology transfer office, called Transformational Partnerships, came about after extensive community consultations.

Industry players who have been aware of the plans are keenly anticipating it.

Tracey Maconachie, president of the Life Science Association of Manitoba, said the local industry is very excited about the prospects of having easier access to research from the U of M that might be applicable to their own work.

"We think it could really be of value and not just for local businesses but for international companies as well," said Maconachie. "It could help to create a brand for Manitoba as innovators."

She said homegrown Manitoba research has always been highly regarded, but the U of M has also had a reputation for being hard-nosed negotiators. "Manitoba was not leading the way in terms of how it dealt with technology transfer," she said. "Some might have said it was problematic previously."

While the U of M may now be leading the way in Canada, there are other institutions that are moving in the same direction.

Janet Scholz, president of the Alliance for Commercialization of Canadian Technologies, said there are a number of institutions in Canada and the U.S. trying to take a different look at how the business of technology transfer is conducted.

"The U of M is taking a step out, far from where they used to be," she said.

Scholz said the global crisis in 2008 cast a major chill over the amount of investment capital available for what is, after all, risky technology development plays.

"We live in a different time now," she said. "Companies take a considerable risk when they are dealing with technology which is inherently nascent coming out of an institution. The risk is quite high that they can do anything with it."

The U of M will continue to split all revenues from technology developed at the university 50-50 with the inventors. Faculty and inventors will also have the option to deploy the former approach of establishing a licensing agreement before the IP is released to a third party.

And in the event there is a wide gap between the parties when it comes to determining royalty payments, a binding-arbitration mechanism will be in place.

Darren Fast, who took over as director of the U of M's Technology Transfer Office in the fall, is looking forward to marshalling in the new approach.

"Cash flow is always an issue," he said. "If you burden small companies with upfront or milestone payments, they will have a tough time having the cash to actually do the product development. The idea is to give companies every chance of success at developing the technology into a product."

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"We think it could really be of value and not just for local businesses but for international companies as well. It could help to create a brand for Manitoba as innovators." -Tracey Maconachie, President, LSAM