The Relationship in a University Between the Research Support Office (RSO) and the Technology Transfer Office (TTO)
Tom Hockaday, Managing Director, Isis Innovation Ltd
This paper explores the relationship between the Research Support Office (RSO) and the Technology Transfer Office (TTO) in a research university, in terms of their activities and the organisational structures. It is typical and straightforward for the RSO to be a key part of the university’s central administration; there is more variation in the positioning of the TTO in the overall organisation structure.
There are choices to be made in the division of certain activities between the RSO and TTO and the nature of the working relationship between the two, and this paper discusses these. The most common question raised is who manages research relationships involving industry; our answer is clear - the RSO, not the TTO.
A previous Isis paper (What is the best structure for a University Technology Transfer Office? - July 2009) included the following point “The TTO is separate to the Research Office”. Universities face a choice in deciding whether their TTO should be part of the University’s administration, or a separate company, and the issues arising are discussed in the previous Isis paper mentioned above. The paper concludes: The optimum structure for a university TTO is for it to be a wholly owned subsidiary company of the University. The University and its TTO can then buy in consulting expertise as the need arises. In decreasing preference are the alternatives of: part of the university administration; a long-term strategic partnership arrangement; a partially owned company.
There are three general points to make. (1) Good people can make any system work and bad people can make any system fail. Nevertheless, some systems are better than others. (2) The structure a university decides upon will be as much a reflection of what suits that university at that time, based upon the personal experiences of the decision makers involved. (3) Whichever system is adopted the TTO must always remember its role within the University: the TTO is wholly dependent upon the willingness of researchers to engage in the process, support from senior university members, and should adopt a philosophy of supporting researchers who want support.
To explain our use of terms: the TTO is that part of the university responsible for commercialising university-owned intellectual property (IP) through the core activities of: attracting and assessing invention disclosures; patenting and other forms of IP protection; licensing; spin-out company formation; material sales; managing seed funds. The TTO may also incorporate a function that helps researchers sell their time as expert consultants. The Research Support Office supports university researchers in identifying and winning research funding, and managing the contractual relationships with research funders.
This paper describes the structure and activities of an RSO and TTO and discusses a number of issues arising at the interface. The paper then describes the Oxford Model for its RSO and TTO.
The position in the organisation of the RSO and the TTO
The RSO is ideally seen as one of the key administrative support functions reporting in to the Head of the Administration of the University (e.g. The Registrar). Research is a core activity of the University and should all be administered and supported in one central place inside the University. This approach does not of course limit the distribution of certain research administration within the organisation to faculties, divisions, departments etc.
The TTO is a separate activity, and whilst important and attracting increasing levels of attention and success, is not core to the University’s primary activities of teaching and research. Furthermore, the TTO is a commercial business activity. The TTO should be a separate organisational unit, preferably a wholly owned subsidiary company. The TTO should adopt a subordinate approach in its dealings with the RSO. Key to the success of this approach is the RSO caring about the University owning its IP when it negotiates research funding terms, which is very important. Although, ultimately, it will be understood that the research funding opportunity will be more important to the University than the potential business opportunity.
Two additional points can be made: each of the RSO and the TTO require adequate resource to function competently; physical proximity would assist many of the interactions between the RSO and the TTO but is not essential.
Issues that arise
There are a number of issues that arise over the activities and interactions of the RSO and the TTO.
- Who manages Industrially funded research contracts
- Checking who owns Intellectual Property before it is sold
- Composite Research and Technology Transfer Agreements
- Material Transfer Agreements
These are described in turn.
1. Who manages industrially funded research contracts
This question arises frequently within universities as they consider the structure for the RSO and TTO. This issue is primarily about whether you view industrially funded research as research or business. For the university, we believe these activities are rightly viewed as research activities, and are sensibly managed within the university (not the separate TTO business).
Research is a primary activity of the university and it should be managed centrally, in one place. There are benefits to having all the university's research administered in one place. If a part of the university’s research activities are managed in a separate place there will be issues over information gathering, consistency and reporting, at the institutional, department and individual level.
Those who favour the TTO managing industrially funded research contracts usually argue that it is the people in the TTO with the skills required to negotiate with industry, and that it is preferable to have one team dealing with industry. The answer to this is to address the competencies in the RSO rather than distort the structure to fit certain individuals.
Research Contracts are part of the University’s research activity (driven by academic not commercial priorities), not part of IP commercialisation. Research is core to the University. Research Services has the relevant expertise. The required competencies of each activity are different. The competencies required are more closely affiliated to other Research Services activities.
If the TTO manages research contracts, it may sacrifice research activity which academics want to do, for potential business gain when it comes to agreeing IP terms. Also, it may sacrifice publication rights to win the industrially funded research contract.
Our view is that it is very important for the RSO to manage these and not the TTO. The missions and objectives of the two can become confusing. The position is clear when the RSO manages all research and the TTO only does technology transfer. If the TTO has twin functions of TT and managing industrially funded research contracts there is a natural tendency for the latter to dominate (as research is a priority for the university researchers).
The RSO manages the agreements relating to research funding, including determining the management of arising IP. These agreements may include reference to existing IP that the TTO is commercialising; it is therefore important for the TTO and RSO to maintain good communications and a strong relationship.
If the TTO seeks to prevent research funding on the basis the IP terms are inadequate, it is likely to lose the argument unless it can sensibly convince the RSO that the deal is not in the interest of the university. But this is not the job of the TTO, and the TTO should be wary of interfering in areas for which it is not responsible.
Central to addressing this issue is to provide a mechanism within the university for these issues to be debated and decided upon by the university. The university should set up a group, controlled by senior researchers to which the RSO and TTO can explain their views. To maintain internal credibility it is highly important for the heads of the TTO and RSO to argue the issues out privately and reach agreement rather than appear dysfunctional before the researchers. The TTO should adopt a subordinate approach in its dealings with the RSO.
2. Checking who owns Intellectual Property before it is sold
One of the major risks to universities from operating a technology transfer programme is the risk of selling something that it does not own (e.g. licensing out a patent it does not own). It is therefore essential to have a very robust system for checking and establishing the ownership of university IP.
Ideally the university has in place clear policies that address the ownership of IP between itself, its employees, its students and the TTO. Nevertheless, university research activity is increasingly collaborative amongst researchers and research funders, and researchers are increasingly mobile. This makes for complex situations arising in establishing ownership of a piece of IP. It is quite likely to involve a number of researchers, some as inventors, some as collaborators; these people may not all be in one institution (with each institution having its own approach and pride); and the research activities may be funded from a diverse range of sources (with each funder having its own approach and pride).
The robust system for checking and establishing the ownership of university IP needs to be well resourced and staffed by able and experienced people. In Oxford there is an IP Rights Management team. The question then arises as to where this team should be located within the organisation. There are three alternatives: the RSO, the TTO or the legal services office.
Our view is that the activity should take place (i) within the University and (ii) separate to the TTO and (iii) ideally within the RSO.
(i) Within the university, as it is the university that knows best its own policies for ownership of IP between its staff and students. (It is the university, not the TTO that owns these policies.)
(ii) Separate to the TTO because it avoids those motivated byselling theIP (the TTO) from deciding who owns it. To put it another way, the TTO may not be as diligent in its ownership checks if it is motivated and rewarded for selling things.
(iii) Within the RSO, as it the RSO within the university who manages the relationships with research funders and has put in place the agreements with research funders which will refer to the management of arising IP.
As research funders become increasingly interested in IP, managing research funding and establishing IP clearance requires more resource.
3. Composite Research and Technology Transfer Agreements
There is then the supplementary issue of who manages relationships or deals with industry where there is both research funding and transfer of existing technology rights.
A natural consequence of the RSO managing all research is that when an external company wishes simultaneously to access existing technology from the TTO and fund research in the university the company has to deal with both the RSO and the TTO. This is the one clear weakness of the preferred model.
[Companies complain to the head of the university saying how clumsy of you to make me deal with two parts of your organisation, how disorganised, tell you what let me come in and help you organise your university like a decent company … at which point the vice-chancellor is reminded that universities are not companies and the complaint of the industrialist appears less well founded.]
This is a price the university must pay to optimise its research management systems. This is a price the company must pay if it wishes to access the university’s expertise and technology.
Some universities may seek to solve this problem in theory by establishing a policy which says you cannot do it: no licensee of university technology (especially if a spin-out) can fund the development of related technology back in the university, the conflicts are too complicated. Such a policy is unlikely to be attractive with researchers and is likely to be difficult to uphold; there will be exceptions allowed, which become precedents, leading to revised policies.
4. Material Transfer Agreements
There is frequent transfer of research materials (e.g. cell lines, compounds) between universities, research institutes and companies. These are usually governed by Material Transfer Agreements and referred to as ‘in-coming’ and ‘out-going’ MTA’s. The transfers are made for zero financial consideration, other than occasionally for transport/shipping costs.
Our view is that as MTAs relate to enabling and facilitating of research they are best handled in the RSO. Whilst they frequently contain complex intellectual property and licensing provisions, they are not commercial transactions.
Arguments for managing MTAs from within the TTO are usually based upon the point that the TTO has expertise in IP, one of the areas addressed in MTAs. Whilst there is no doubt that specialise expertise is required to manage MTAs, this expertise is better located in the RSO than the TTO.
The "Oxford Model" for Technology Transfer
Oxford University is a world-class leading research University, with approximately 4500 researchers and research spend over £450m pa (2008-09). Technology Transfer is recognised as a component of the University’s corporate strategy and is an important part of the University’s charitable mission to optimise the usefulness of its research for public benefit.
The University has clear policies which claim ownership of Intellectual Property (IP) and share benefits with the developers of the IP. The University’s Intellectual Property Advisory Group (IPAG) develops and monitors the University’s IP policy, and reports to Council. The University supports its researchers by investing in the staff of Research Services and Isis Innovation Ltd, who are responsible for implementing the University’s policies.
Research Services supports Oxford researchers and external organisations wishing to fund, or otherwise support, research at Oxford; and develops research policy.
Isis Innovation Ltd protects and manages University intellectual property which it has received from the University, and developed by researchers who wish to commercialise the results of their research.
The essential elements of the Model are:
- An office within the University directed primarily at facilitating research; and
- A company outside the University, owned 100% by the University, directed primarily at the commercialisation of IP, which reports to University Council.
RS negotiates and approves the contractual terms governing all research which includes ownership and use of arising IP. RS interfaces with external research funders and collaborators, and is responsible for all contractual obligations entered into. These obligations include conditions relating to ownership and use of IP.
Research Services establishes ownership of IP and transfers (by assignment) University owned IP to Isis where a researcher is working with Isis. Isis assesses the commercial opportunity, files and maintains patent/applications, negotiates and manages IP commercialisation agreements (options, licences, consulting, spin-outs).
The strengths of the Model are:
- Clear delineation of responsibilities between Isis and RS.
- Close collaboration of both elements of the TT support structure.
- Clear support from University management.
- Unified recording of all IP obligations arising from research funding and collaboration.
- The part of the University responsible for establishing ownership of its IP is separate from the part responsible for selling it; this minimizes the risk of selling IP owned by others, and avoids IP sellers dealing direct with University research funders.
- Research Services is always involved in all research funding activities.
- Researchers are able to commercialise their research independently, with University approval.
- Isis does not influence University research activities.
In this paper we argue that the RSO should be a (vital) part of the central administration of a research university. The TTO should be separate from and subordinate to the RSO; ideally structured as a wholly owned subsidiary company. The RSO should manage all of the university’s relationships with research funders, and not pass responsibility for relationships with industry to the TTO. The over-riding consideration in these matters is to recognise that research is a primary activity of the university, and commercialisation a secondary activity.