Debate: "Identifying barriers to R&D collaboration"
With Research and Development (R&D) high on the Government's agenda, Blake Morgan LLP, jointly with The CBI recently hosted a business roundtable which focussed on Business Innovation and R&D Investment in the UK. Participants included the University of Oxford, entrepreneurial software technology companies, innovative waste disposal and other businesses. Felicity Burch, Head of Innovation and Digital at the CBI co-chaired the debate with Blake Morgan Partner and OxLEP NED Penny Rinta-Suksi.
In the January 2017 Green Paper an additional £4.7bn of funding was promised by the Government for 2020-2021, making this the biggest increase in any Parliament R&D investment in almost 40 years. In addition to this, the Government created UK Research and Innovation to bring together the Research Councils and later stage innovation funding via Innovate UK; so not just financial support but also support on strategic capability. The new Industrial Strategy Challenge Fund was created to capitalise on the UK's strengths in science and innovation, with 250 projects to receive grants totalling £100m over the next few years.
Innovation in Oxfordshire
In Oxford, Blake Morgan LLP has a keen interest in innovation leading to success and local and international economic growth. The OxLEP has an Innovation Group led by Prof Ian Walmsley of the University of Oxford who oversee and implement the Oxford Innovation Strategy. £5.2million is going to fund innovation support for businesses to include support for research institutions to partner with SMEs. The OxLEP supports Oxford University's space application at Harwell and Oxford Brookes University's autonomous vehicles application at Culham to the Challenge Fund.
Collaborate and Innovate
The ERC has recently shown that collaborative research helps growth 5% faster than non-collaboration. Participants agreed that growth occurred faster when parties collaborated and combined research, resources and a shared commercial focus.
The following were the findings on barriers to successful collaboration:
- R&D Tax Credits were considered by participants to be helpful. Smaller companies were thought to do more than mid-sized companies as a percentage of their turnover, and that often this research is not declared if there is no tax break or reason for Government to know.
- The process for securing R&D tax credits for R&D spend with Universities was thought to be unclear and a cause for uncertainty and risk as to whether such spend could be successfully claimed.
- Some non-local universities seemed unduly fixated on IP ownership, even when this did not make sense, due to level of contribution of the commercial partner, (contrary to Lambert Report principles supported by the IPO). The university's concern was about research being released into the commercial world in many different sectors (often the technology can be applied cross sector) and not giving away rights to one company to commercialise in all sectors, such that they don’t do that or they perhaps go out of business (albeit these sorts of things can be appropriately dealt with in contracts). The University of Oxford's view was that whilst a co-collaborator might not get everything they want, they could get what they need to move forward commercially, and this did not need to sit contrary to the university's need to get its research out to the public for other purposes.
- One company had experienced, with a non-local university a desire for a royalty that was out of kilter with what was an appropriate share which killed the collaboration. Again, it was thought that sometimes one can better focus on the research side of the work and agree that the development and rewards for participation can be established later once the research results are known (research being an uncertain thing in itself). This had worked well for the University of Oxford.
- Not understanding the intention of parties can be a barrier – it is vital to understand success for both parties, and want your partner to succeed – an essential ingredient to a successful JV.
- Enforcement costs were also thought to be prohibitive. Blake Morgan LLP litigator Stephen Schneider offered that allowing for expert determination or non-court resolution such as mediation can also be helpful where the parties are not able to determine everything up front and the parties are of unequal financial standing. It allows a more cost effective way to enforce a deal/determine what is the right reward for contribution.
- 'Patent box' was viewed to be a 'real nightmare' as were Grant applications, which at times are considered as 'very unwieldy'. The group felt that businesses need the process to be 'straightforward'.
- The two Oxford universities have website pages dedicated to attracting collaborative opportunities. Industry 'clubs' are useful, for example, the robotics institute, where staff can be seconded in and whilst there is no right to IP, they can see source code and be 'brought on' in a like-minded environment.
- It was thought that the CBI paper "Best of Both Worlds" was a useful starting point for companies looking to do business with universities.
Felicity Burch, CBI Head of Innovation commented “Business innovation is fundamental to economic prosperity. Businesses developing products, processes and technologies become more productive, challenge existing business models, and grow quickly. The CBI speaks for many of these firms and is committed to raising R&D spend to 3% of GDP, facilitating best practice on the digitisation of industries and the importance of data security, and improving the UK’s access to the infrastructure required for such business growth.”
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