ANALYSIS: Rather than change the current system of technology transfer offices, fund them better.
The New Zealand Government established a group called the Science System Advisory Group (SSAG) in March 2024 to provide advice to the Government on strengthening New Zealand’s science, innovation, and technology system. Alongside the SSAG, the University Advisory Group (UAG) has been established to advise the Government on the university system, and the two are expected to coordinate with each other. The SSAG reported back to the Government in August 2024 and, in January this year, the Government announced reform proposals from the report that it plans to adopt.
Highlighting the reforms is the transformation of the seven Crown Research Institutes into three Public Research Organisations (PROs) focusing on bio-economy, earth sciences, and health and forensic sciences, as well as the establishment of a fourth ‘advanced technology’ PRO to deliver research, capability, and commercial outreach around technologies such as artificial intelligence, quantum [advanced computing] and synthetic biology.
Among other reforms, the Government plans to “develop a national policy for managing intellectual property (IP) for science, innovation, and technology-funded research”.
The Government announcement states that it: “…wants to reward and incentivise people in the industry and will therefore develop a national policy for managing intellectual property (IP) for science, innovation, and technology-funded research”.
And that: “This will be based on the model used by Canada’s Waterloo University, which vests ownership of IP with the researchers who create it.
“We will also be considering how this policy will apply to the new PROs, with the intention being that researchers receive a share of the financial rewards from commercialising intellectual property.”
University of Auckland Business School’s Centre for Innovation and Entrepreneurship
So, what is this model from the University of Waterloo in Canada?
The SSAG report states, when referring to the commercialisation of research from universities and research organisations managed by technology transfer offices (TTOs) that: “…in Canada, some institutions (eg, Waterloo University) do not claim any equity at all, leaving exploitation in the hands of the inventors, and this has proved very successful”.
As motivation for change, the report provides a long list of criticisms of the current system of technology transfer managed by TTOs, which many would not debate.
However, the implication is that adopting the Waterloo model and leaving the ownership of IP in the hands of researchers would pave the way for an easier path to commercial success. As with many policy initiatives, life may not be that simple, and much depends on how changes would be implemented and resourced.
Is the Waterloo model the right way to go for New Zealand TTOs?
A close look at the University of Waterloo’s IP policy reveals more than simply that IP ownership stays in the hands of the researchers. Yes, the fourth paragraph of section 2 provides that:
“Except in certain well-defined situations, this policy provides that the ownership of IP rights rests with the creator(s) of the IP.”
And, consistent with that premise, section 7. Patents (part B. Ownership of a Patent), there is a clause that says:
“The University acknowledges that it has no direct equity in the ownership of any patent developed by a member of the University (notwithstanding that such patent might be intellectually conceived in the course of teaching and research activity) …”
But section 7 Patents also says (with emphasis added):
“Members of the University may, at their option, submit their proposed invention to the Office of Research for consideration regarding possible financial and developmental assistance. The University retains an absolute right to determine if it wishes to offer any such assistance. If the inventor(s) choose(s) to use the assistance offered by the University, then:
So, it would seem that, according to the policy, unless an inventor at Waterloo University has the means to take care of the costs and management of patent protection themselves, they will likely need to seek the help of Waterloo’s TTO (or possibly some other external entity), in which case they would be required to assign their patent rights to the University.
However, word has it that what Waterloo’s IP policy says and what happens in practice differ.
In practice, there is no assignment of IP from the researchers to Waterloo’s TTO in the event that the researchers wish the TTO to help them. Nor is there any sharing of expenses (the TTO covers the expenses). The instrument used is a licence agreement where the TTO is granted the exclusive right to commercialise the technology (for a defined time period).
IP lawyer Greg Lynch.
Ownership of the IP remains with the researchers, but it’s arguable whether that facilitates successful commercialisation any more than the TTO owning the IP. At the end of the day, the incentive for researchers is driven by fair income sharing arrangements between the TTO and the researchers, whoever is the IP owner.
This ‘Waterloo reality’ differs from the current practices of New Zealand’s university TTOs in terms of IP ownership. But, beyond that, the way the Waterloo TTO operates does not seem to be much different from the way New Zealand’s TTOs operate. The Waterloo TTO picks up a modest number of projects a year. They pick and choose carefully who and what they work with – not dissimilar to current practices with New Zealand TTOs.
Even if NZ universities and other research organisations were to take up a model where researchers retain ownership of IP, very few researchers would have the means to go it alone and fund commercialisation activities (including patent filings). The vast majority would surely seek assistance from their TTO, or possibly from some external source.
Meeting the Government’s stated aim of “getting the system settings right … to boost long-term economic performance and ensure our scientists can pursue meaningful careers in New Zealand” would not be achieved by adopting a model where IP ownership is retained by researchers.
IP ownership on its own is not a true incentive. Real incentive for researchers comes from knowing they have good access to resources, primarily expertise and funding. The existing TTOs each have experts who are close to the research and know many of the researchers in person. Rather than change the current system of TTOs, fund them better.
Enough talk of Waterloo.
Intellectual property lawyer Greg Lynch is a director at Wellington firm Catalyst Intellectual Property.
This is supplied content and not commissioned or paid for by NBR.
