This is gemaker’s response to Australian Government’s consultation paper on The Higher Education Research Commercialisation IP Framework, released on 20 September 2021
We congratulate the Australian Government for focusing attention on the vital tech transfer sector and making many good recommendations to facilitate research commercialisation. We commend the proposal to establish a HERC IP Framework as it will support engagement between creators and users of technology and smooth negotiations between publicly funded research organisations (PFROs) and commercial entities.
We approve the recommendation to provide negotiating parties with a bank of common clauses to draw on when drafting commercial agreements, as this provides a strong foundation and saves time in negotiations.
We appreciate that Section 3 of the consultation paper recognises the importance of Trust and Culture, as this cannot be overestimated, and neither can the time investment required to develop trust-based research-industry collaborations. Therefore, Government and organisational support of industry engagement in the early phases of research will foster better understanding and outcomes for all parties.
Based on our extensive experience, we recommend that the Higher Education Research Commercialisation Framework and/or other government initiatives be extended to address the following key issues for the benefit of the tech transfer sector.
1. Clearer and fairer global benchmarking
In contrast to many other developed nations, Australian industries mostly comprise small or micro-businesses, with low numbers of mid-size enterprises. Businesses seeking to scale up are often forced to move overseas to access larger markets. Large Australian-owned and -based companies are generally restricted to traditional and conservative sectors such as banking, mining, or agriculture. This industry structure has major repercussions for research commercialisation, but this is overlooked in global benchmarking. The tech transfer sector would benefit from a systematic, global comparison of national industry structures (business size, ownership, foreign trade, etc.), public funding for research, and commercialisation activities and outcomes, which should then inform the Framework’s objectives and methodology.
2. User-friendly IP commercialisation guidelines
Commercialisation pathways vary enormously across inventions and sectors, so a one-size IP Framework will not fit all. For unsophisticated PFROs or SMEs, commercialisation guidelines are useful, but detailed legal documents would require frequent, costly reworking of inappropriate or irrelevant sections or clauses. Even the ‘simplified’ Australian IP Toolkit for Collaboration has not been widely adopted as SMEs still find it unfriendly. Large companies insist on applying their own frameworks to IP agreements, and PFROs must acquiesce if they want the sale.
3. Research strengths database
More than a standardised framework for purchase of IP, industry needs to know our PFROs’ research strengths. Corporates and PFROs would benefit from a well-maintained, comprehensive and easily searchable, federated database of research capabilities and inventions. For comparison, IP Australia’s SourceIP includes filed patents but does not provide information about promising pre-commercial research opportunities that could be suitable for industry engagement leading to commercial IP. The comprehensive database we recommend would save companies time in finding valuable IP, connect them with PFROs offering research capabilities that meet their needs, and promote research commercialisation more effectively. It is important to keep such a dataset relevant and up-to-date and avoid the shortcomings of the Easy Access IP model, which became known by companies as a repository for IP that had been unsuccessfully offered for commercialisation elsewhere.
4. Improved commercial training for PFROs
More than a standardised framework for sale of IP, PFROs need education about industry investment milestones and triggers to better understand where their IP sits on this continuum – and therefore its commercial value. To assist with this, industry should fund and populate groups similar to the former, government-funded Industry Growth Centres to provide independent advice on key drivers and emerging trends in their respective sectors. (Alternatively/additionally, Australia could adopt the US model requiring that all commercialisation of IP from PFROs must be via licensing rather than sale – to remove sale-price guesswork and so that PFROs access full value from their IP over time.)
5. Clarity in commercial negotiations
Part 2.7 (Warranties and Liabilities) of the consultation paper notes the unwillingness of PFROs to provide guarantees. This, together with concerns about disclosure of current or pipeline IP by researchers under pressure to publish, is a deterrent for commercialising organisations seeking clarity around the IP they are purchasing. If the IP Framework were to identify and provide guidance on common warranties that could be given, and articulate why PFROs may not provide other guarantees, this would help prevent ‘bogging down’ of commercial negotiations in this area.
6. Space for trust-based collaboration
The encouragement of early and extended engagement of businesses and PFROs helps build trust and reverse the trend for adversarial negotiations. Where collaborating parties understand each other’s priorities, it is generally easier to explore options that optimise outcomes for all. For example, early collaboration helps commercialising organisations appreciate that it is not in their best interest to prevent continuing research once IP is transferred. Rather, facilitating ongoing research can provide a valuable pipeline of future IP and better understanding of emerging trends, while helping the researcher to factor commercial needs into their research strategy.