UK: Academics Vote on University Attempts to Update IP Policy

In the last week of November 2005, academics at the 800-year old University of Cambridge voted on a controversial proposal that changed the way intellectual property ("IP") was managed and exploited in the University. Under the previous IP regime, academics at the University of Cambridge owned the intellectual property generated by them, unless generated by externally funded research, such as the research councils, in which case the rights were owned by the university. At most other universities in the United Kingdom it is the university, rather than the academics themselves, that owns the intellectual property produced by university staff. The new proposals involve IP rights being owned by the University or its wholly-owned subsidiary Cambridge University Technical Services Ltd (CUTS). The first time a vote was held, in 2002, the proposal was defeated, but this time it was thought that the result would be much closer. Academics opposed to the proposals feared that attempts to change the way that the university manages the intellectual property created by staff could drastically reduce the success of "Silicon Fen".

Silicon Fen – historically the cluster of high-tech and IT companies in and around Cambridge – advertises itself as being the second largest venture capital market in the world after Silicon Valley, with approximately 1000 high-tech and IT companies, generating approximately $3 billion in revenue, within a 20 mile radius of Cambridge. Originally, IT and computing companies predominated, but after the downturn in the IT boom, the number of biotechnology companies has been steadily increasing and as of 2003, the number of employees in biotechnology firms outnumbered those of software, electronics and wireless telecoms. An indication of the diversity of biotechnology companies is shown by the presence of companies specialising in catalysts, therapeutics, drug discovery, medical implants, genomics, protein purification, vaccine and gene delivery products, plant biotechnology, pharmaceutical screening, DNA sequencing and genomic testing. Nearly 1100 academics took part in the ballot, the result of which was published on 13 December 2005. Of those academics who voted, 790 voted to support the policy, 259 wanted an amended version and 49 voted to completely reject the proposals. The proposals were therefore passed and applied to applications made after 14 December 2005.

Research grants and contracts at the University of Cambridge are handled by the Research Services Division ("RSD") and technology transfer by Cambridge Enterprise (previously the Technology Transfer Office). The role of Cambridge Enterprise is, in particular, to commercialise research results. The University notes that many sponsors of research require the University to have technology transfer mechanisms in place and that revenue from technology transfer is not expected to be high relative to the University’s turnover (figures of £10 million income from a turnover of £600 million have been suggested). The purpose of the proposed intellectual property rights ("IPR") policy was to address a number of issues, including: clarity of ownership; consistency across the University in treatment of intellectual property; and freedom for academics to place their results in the public domain.

The University believed that by taking control of any discoveries developed from general research, it would be able to settle ownership disputes between academics. Cambridge Enterprise would decide which inventions to patent and would help to find venture capitalists to commercialise any new ideas. The inventor would receive about a third of the proceeds, with the rest going to the University. However, opponents accused Cambridge Enterprise of being bureaucratic and inefficient, and that the proposal would allow the University to decide which work to publish and which must be protected by patent.

Supporters of the proposal stated that the academics are using University facilities and being paid by the University, so it is only fair that the University is able to benefit from discoveries made by staff. Otherwise, supporters claim, researchers can draw generous salaries from the University as well as making large amounts of money when their inventions are commercialised.

The University was concerned that the previous "mish-mash" of regulations afforded the University no control over the intellectual property created by the majority of its staff. The University was concerned that the situation under the old regulations penalised junior staff who contribute to research but may have missed out whilst more senior members of staff could make substantial amounts of money from commercialising the research. It also feared that academics lacked the necessary skills to negotiate with venture capitalists. Supporters of the proposal claimed that academics would still be able to demand that the University assign back to them the relevant intellectual property rights so that they could seek commercial sponsors themselves, with the University claiming a proportion of the profits, if the University decided not to pursue commercialisation.

Opponents of the proposals noted that Stanford and MIT (Massachusetts Institute of Technology) in the US had similar relaxed approaches to ownership of intellectual property as previously operated at Cambridge and cited the proliferation and success of start-up companies at these two institutions as evidence of the success of academic-owned IP. However, the director of technology licensing at MIT stated that Cambridge’s policy would now be closely aligned to that of MIT, suggesting some confusion on behalf of opponents of the proposals. Opponents also claimed that academic freedom was being undermined, with academics being bound to undertake research on behalf of external backers without the academics’ prior consent, which was denied by the University, as well as having restrictions placed on their ability to disseminate the results of their research if the research is commercialised. By allowing Cambridge Enterprise to negotiate agreements, opponents argued, the wishes of the University would be put first, above the wishes of the academics.

Opponents also argued that the "Cambridge Phenomenon" – the large number of high-tech companies clustered around the University – was driven by the ethos of self-confidence of the University inspired start up companies around it and the ability of University employees to retain intellectual property rights allowed university employees, many on short term contracts with no wish to remain at the University for life, to try exploiting their ideas with these firms.

It is obvious that the "Cambridge Phenomenon" is a success story for innovation and enterprise, but it is less clear that this success can be laid solely at the door of a relaxed IP policy on behalf of the University of Cambridge. Cambridge, as one of the premier UK universities can be expected to attract some of the leaders in their academic fields who would be expected to be a fertile source of innovative products. Whilst the previous IP regime may have helped in the commercialisation of inventions, it is far from clear that the switch to a more centralised IP policy will sound the death-knell for the "Cambridge Phenomenon". Other universities, with a more centralised IP policy, have been successful in commercialising employees’ inventions.

Investors seeking to invest in a new company or to license technology may have to balance the wish to have a central point of contact for negotiations with the wish to deal directly with the people who know most about the technology. In the current financial climate, with funding pressures from national government and funding councils, there are pressures on universities to explore alternative revenue streams, and one such revenue stream is increase exploitation of inventions. However, there may be a danger of universities become too commercially focused and losing track of the educational role they have – in effect a blurring of the "goal" of the University.

It remains to be seen what effect the new IP regime has on the "Cambridge Phenomenon" and whether the fears of opponents will be justified. However, given the obvious success of the phenomenon and the facilities and expertise that are available, it is unlikely that investors would abandon Cambridge due to reorganisation of the University’s IP policy.

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