Report following the June and October 2013 sessions (wave four)

Final Report
Prepared by the Canadian Intellectual Property Office (CIPO)

July 2014

Executive summary

Background

The Canadian Intellectual Property Office (CIPO) has been engaged in a series of roundtables to better understand the role of intellectual property (IP) as a driver of innovation in Canada. Roundtable sessions began in the summer of 2012 with each wave dedicated to a specific topic. The first three waves focused on the experiences of small and medium-sized enterprises (SMEs) with the IP system in Canada. For the fourth wave of roundtables, CIPO turned its attention to technology transfer offices (TTOs). Two sessions were held in Toronto on June 19, 2013. These were followed by two more sessions conducted in Ottawa on October 29, 2013.

The objective of the TTO roundtables was to better understand their patent needs in order to determine the role of CIPO in supporting their efforts to maximize university innovation efforts. Representatives from 18 organizations supporting more than 50 universities, colleges and other academic research institutions across Canada participated in the roundtables. They were presented with seven themes to guide discussions:

  1. Patentability assessment: The decision-making process for determining which innovative ideas are suitable for patent protection.

  2. Seeking patent protection: Key factors that come into play when designing patent strategies.

  3. Experience in obtaining patent rights: Experience in obtaining patent protection in support of efforts to commercialize an invention.

  4. Negotiating and transferring intellectual property: Common issues that arise when negotiating or transferring IP.

  5. Information sources: The types of information sources consulted to help make strategic decisions regarding patents.

  6. Patent awareness: Patent awareness activities TTOs undertake, both internal and external.

  7. What CIPO can do: Views on what CIPO could do to provide better support to TTOs.

Findings

There were a wide range of insights shared by participants representing institutions, large and small, and from across the country. These included:

  1. Making an impact: Universities are seeking to make an impact through the generation and dissemination of new knowledge, in keeping with their mission.

  2. Need for quick action: TTOs sometime only have a short time frame to take decisions as to whether to file a patent application, in advance of disclosure at a conference or publication in a journal.

  3. Picking winners: To assess the value of research perhaps years in advance of commercialization is a very difficult task.

  4. Access to a range of data sources and tools: Informed decision-making hinges on the ability to gather strategic intelligence on patentability, commercial potential and possible partners.

  5. Increasing IP awareness on campuses: There is much to be done to educate faculty and students on the importance of IP, in order to achieve a greater impact through the development, dissemination and commercialization of their ideas.

I. Introduction

Intellectual property (IP) has become an increasingly important asset that can maximize the benefits derived from innovative investments made by business, government and universities. CIPO plays a key role in supporting Canada's innovative performance through its efforts to deliver quality and timely IP rights, build IP awareness, and disseminate IP information and data. CIPO is working towards a better understanding of the requirements of innovators and the innovation cycle in which they operate. As part of these efforts, CIPO has been actively consulting with its customers as a means to becoming more familiar with the complex and evolving nature of business strategy and the decision-making processes that underlie IP use. This will allow CIPO to better support innovative undertakings and business success by improving the quality of services to innovators.

CIPO roundtable sessions began in the summer of 2012 with three waves focused on the experiences of small and medium-sized enterprises (SMEs) with the IP system in Canada. For the fourth wave of roundtables, CIPO turned its attention to technology transfer offices (TTOs). This fourth wave of meetings began in Toronto with two sessions held in June 2013. These were followed by two more sessions in Ottawa in October 2013. Each session typically lasted up to two and a half hours, and was facilitated by an external consultant with government officials in attendance.

This summary report begins with a brief description of the context in which TTOs operate, based upon information provided at the sessions. However, it should be emphasized that all TTOs do not necessarily function in the same way, given that policies and rules can differ from one institution to another. The report then goes on to present key findings from the seven discussion themes that were covered during the roundtable meetings. The report also highlights a number of insights that CIPO should explore as part of its efforts to better support the work of TTOs.

II. Use of findings

CIPO's roundtables were exploratory in nature and intended to capture insights into TTOs' experiences with the IP system. In some cases, respondent comments have been grouped together from different sessions and from different areas of discussion, where appropriate, in order to keep like topics together.

Findings should be regarded as directional rather than conclusive. Roundtable discussions, by their very nature, elicit anecdotes and observations from individual experience. They are valuable for capturing details of individual experience and the perceptions that have formed from those experiences.

III. Context

CIPO learned that universities must serve a wider range of goals than private industry, and that TTOs can face challenges in attempting to create value from intellectual assets developed in an academic culture. These touch on a number of matters, including: a) drivers for seeking IP protection, b) the need for quick action, c) independence within universities, and d) operating in an environment of basic research.

  1. Drivers for seeking IP protection: Unlike private industry, profit is not the main driver of innovation for universities, although generating revenue may be a consideration. In a post-secondary environment, academic and research achievement can be recognized by such things as publications, citation rates and presentations at conferences, in addition to IP. The key objectives, seen by many roundtable participants, are the generation and dissemination of knowledge, as well as the training of students who can do the same. Patents can be used as a vehicle to disseminate knowledge, and can offer affirmation of the uniqueness of an invention and contribute to the reputation of the researcher and the institution. However, these may not offer sufficient reason to file a patent application. Most of the time, the filing of a patent application is necessary to entice industry partners or to meet obligations for, or access new, grant funding. Therefore, it is a range of considerations that must be taken into account when making decisions on whether or not to seek patent protection.

  2. The need for quick action: With varying obligations to report, researchers may disclose their inventions to TTOs at a time of their choosing. Once approached, TTOs attempt to determine which innovative ideas are suitable for patenting by identifying innovations that are both marketable and promote the knowledge dissemination mandate of their institutions. TTOs, at times, are required to make quick decisions. They are approached by professors with research, sometimes providing only a short timeframe to make a decision as to whether to file for patent protection before research results are presented at a conference or published in a journal.

  3. Independence within universities: Professors determine the topic of research, and it is their choice as to whether they will collaborate with industry partners (and which ones). Obligations to report vary among the institutions. However, much of the time, researchers have to disclose their inventions to TTOs if they wish to commercialize.

  4. Operating in an environment of basic research: Basic research can regularly include collaboration amongst several professors, students, research assistants, postdoctoral fellows, businesses and other funders. TTOs, with the researchers, must ensure due diligence to clearly identify all potential inventors and third-party rights, before seeking IP protection.

IV. Findings

Theme 1: Patentability assessment

What is the decision-making process for determining appropriate candidates for patent protection?

Participating institutions indicated they look at the science, including the prior art, and then determine if there is a market for the product. TTOs are sometimes required to respond quickly when researchers advise them that they have come up with something potentially new and of value and will be presenting at a conference or have plans to publish the results of their research in the near future. If obliged to move quickly, TTOs will conduct a triage process for a rapid, overall assessment to determine whether or not to seek IP protection. 

If time permits, the TTO will undertake a more thorough assessment (review of prior art, trade literature, patent literature). For TTOs with sufficient in-house experience, both triage and deeper assessments can be done quickly to determine whether the results are patentable and have the potential to be exploited commercially. TTO experience gained from dealing with a significant volume of IP applications across a number of fields over the course of many years may aid in the decision-making process.

In light of TTO budget constraints, one of the elements to take into account is as follows: if the institution goes ahead with this application, what will be the return to the university? It is important to note that for some, the value of an invention does not necessarily rest on its financial value in the short term. It may be important for the university to use IP to secure additional research, or secure or maintain a collaboration (for example with a private company). Moreover, a key positive benefit of filing for patents is the dissemination of knowledge, which is valuable in terms of university reputation.

Assessment criteria

A range of assessment criteria are explored in determining whether to file for a patent:

  • potential for commercialization based on industry interest and market feedback;
  • how useful the IP would be in other areas of the university/research community;
  • how IP can be used to support university objectives (e.g., knowledge dissemination);
  • how IP could be used to bring in additional research activity;
  • ability to transact IP;
  • nature of the industry and how IP is treated;
  • what are the origins of the research funding and are there strings attached; and,
  • how much disclosure has already taken place.

Factors that TTOs identified as being important when making a decision as to whether to file for patent protection included the following:

  1. Patentability: TTOs conduct initial searches for prior art and rely upon their subject matter expertise and that of the professor to determine whether something is novel. If time and resources permit, the patentability analysis of an invention is conducted early in the assessment process by TTO staff that conduct prior art searches using various web-based patent databases.

  2. Results of due diligence checks: TTOs undertake due diligence to determine the origins of the research,  and verify the identity of the inventors, any third-party rights and agreements that the academic—referred to by TTOs as the principal investigator—has made with industry or other institutions.

  3. The link between filing a patent application and research funding: Funding may become a factor in the decision to file a patent application if a patent is necessary to obtain research funding further downstream in the maturation process, or if funding is available to pay for the patent application.

  4. Commercial viability: While generating profit is not the only factor in making a decision as to whether to file a patent application, an invention should have the potential to generate commercial returns. The promise of commercial utility that reduces the likelihood that an invention will simply sit on the shelf is essential to the TTO's mission. Commercial exploitation of an invention also helps institutions to recoup some of their costs in registering for patent protection. An important step is to try to understand how the idea could be commercialized. This can involve validating results; developing a pilot or proof of concept; knowing what the competing products are; and anticipating challenges that may arise in developing a final product and accessing the market. In considering whether the invention is worth protecting, other factors taken into consideration include: the nature of the industry and how IP is treated; the nature of protection (e.g., use claims versus composition-of-matter claims); and possible difficulties to transact the IP (e.g., licensing).

    When determining the commercial viability of an invention, some TTOs are increasingly considering the creation of spin-off companies. If an invention can lead to a self-sustaining spin-off—even a small one that employs just a few people—TTOs could consider pursuing a patent on this basis. This is consistent with the university's value of contributing to society through the propagation of new ideas. Some participants spoke of universities seeing the quality of their patents as being an extension of their brand.

  5. 5. The track record of the principal investigator: An important consideration is the availability of the researcher and the team to invest the time to do the necessary work to support the patent process and seek possible partners to exploit the invention. These are significant success factors and must be determined early in the patentability assessment process. 

Given the need for rapid decisions in some circumstances, access to a range of relevant experience, information sources and tools is of importance to TTOs in making informed decisions on whether to seek patent protection.

Theme 2: Seeking patent protection

What are the key factors that come into play when designing your patent strategy?

The elements of a TTO's patent strategy include: well-defined application input and quality patent output; the opportunity to collaborate with industry partners to evaluate commercial potential; and the promotion of the institution's reputation. Ensuring that these various elements are aligned helps to ensure that the various interests of the TTO in filing a patent application are realized.

A number of factors were identified by institutions as key to a sound patent strategy for universities:

  1. Filing considerations: A general strategy that TTOs frequently pursue is to first file a United States Patent and Trademark Office (USPTO) provisional application and then consider filing a Patent Cooperation Treaty (PCT) application. Some participants described a stage gate approach: triage yes or no, followed by a US provisional, and then decisions regarding protection in Canada and other countries they would want to enter, based upon the market, nature of the invention, and other factors.

    It was raised by many that securing IP protection is expensive, and TTOs have financial constraints when managing a limited budget. Patenting and the related commercialization effort require substantial financial investment, including agent and IP office fees. If the research is international, TTOs will consider PCT from the beginning, while in other cases TTOs do not use the PCT route unless there is a strong case for it, for instance if there is a licensee who wants the office to file PCT. TTOs generally need a partner for the PCT route as they require significantly more financial resources to pursue this option. Only if the IP is very valuable would they support the national phase themselves.

    Some institutions spoke of the financial challenges faced by TTOs in managing portfolios at different stages: application, prosecution, negotiation, licensing. Along with managing patent portfolios, TTOs may also have new patent applications to file every year, as well as patent applications going through prosecution. With limited resources, TTOs are sometimes forced to make hard choices between filing applications for new inventions and maintaining patents within their portfolio. With this in mind it is often necessary to make clear to the researcher that the patent is a commercial instrument.

  2. The existence of suitable receptors in the marketplace: TTOs face challenges when it comes to developing their strategy and determining market demand in advance of disclosure of an invention. One institution indicated that they try to work 5 years in the future: what will the market demand in 5 years' time? How far to go to protect an invention while the market develops? It should be noted that TTOs cannot approach potential industry partners until a patent is filed, yet they cannot be certain that they can count on commercial support for a patent until they approach industry. This is a challenge that TTOs try to overcome with relevant market research.

  3. Type of relationship: When undertaking collaborative research, it is usual for there to be a contract signed between the parties. These contracts typically include clauses regarding the right to publish, to use the innovation for educational purposes and in some cases, matters relating to the seeking of patent protection and IP management. The latter of these is in keeping with a key strategy of TTOs to stay in control of the management of the IP. However, in some circumstances, it might be acceptable to let the partner play a greater role in the management of IP.

TTOs are faced with the challenge of identifying possible commercial interest in an invention during the early stages when the patent prosecution costs are still low. Access to analytical tools would help them to identify potential industry partners and provide other strategic intelligence.

Theme 3: Experience in obtaining patent rights

Please describe your experiences in obtaining patent protection in support of your efforts to bring an invention to market.

TTOs indicated that they are knowledgeable about the most effective means of filing under different scenarios, but they identified some issues around obtaining patent rights, including the following:

  1. Usefulness of a provisional application: A general strategy employed by TTOs is to leverage the patent system by filing a provisional application at the USPTO before taking decisions as to whether to file a PCT application. A common scenario for TTOs involves being approached by a professor who is about to publish their invention in a journal or as part of a conference. In this scenario, TTOs have to react quickly, and typically file a US provisional application, given its low cost, flexibility of use, and additional time to complete the proof of concept. The provisional is often seen as the default starting point. Some institutions indicated that they would benefit from having the option of filing a similar type of application in Canada, as it would be less costly and more straightforward from a process perspective to work with their Canadian agents to file. However, it was noted that CIPO's incomplete application option is not as flexible as a USPTO provisional application, as the latter allows for making changes later in the process, and it is expunged in the event that they do not proceed.

  2. Engaging external IP expertise: Participating TTOs tend to use external patent agents and try to involve them early in the process. In situations where there are third-party investors or when the marketing cycle is short and there is a clear advantage to being first to market, TTOs will immediately call a patent agent to assess patentability. It was also noted that smaller TTOs may rely on patent agents for IP strategy advice.

The US provisional is seen as a “globally accepted currency”: quick, easy, inexpensive, well known and with advantages that the Canadian “incomplete application” is lacking. When working with US companies and US researchers, they expect a US provisional.

Theme 4: Negotiating and transferring intellectual property rights

What are some common issues that arise when negotiating or transferring IP rights?

Innovation takes place at universities in a climate of open exchange as professors, students and industry interact to build on existing knowledge. While this method of working is conducive to driving research and innovation, it can make issues of IP ownership complex. It is the role of the TTO to take into consideration a range of elements. This includes identifying all inventors, as well as any agreements made between the inventor (professor) and others.

In general, TTOs prefer to retain control of the patent, and they prefer to grant licenses. The terms of licenses are made on a case-by-case basis.

TTOs indicated a number of issues to consider when negotiating IP rights, including:

  1. Understanding how companies are going to use the intellectual property involved: Universities see their roles as being purveyors of knowledge. A benefit of IP ownership is that it provides them with leverage to ensure that the invention is used in a manner consistent with this mission.

  2. Agreements: Institutions indicated that they all prepare their own agreements but that they have the option of using templates prepared by the Alliance for Commercialization of Canadian Technologies (ACCT) to create their agreements. Several TTOs, in referring to limited resources and capabilities, were of the view that IP management should pass to the other party. One TTO said their university took the view that if the other party had the capability to manage the asset, then to let them do it, to allow TTOs to better manage their costs. Another TTO agreed, but stressed the importance of the other party's actions not being misaligned with the university's intentions. However, a number of institutions were clear that their organizations did maintain some degree of oversight and control. For instance, one TTO required quarterly reports to check progress concerning the patent status. As well, there was language in some agreements that the claim scope could not be changed or reduced. Where the licensee is given responsibility for enforcement, the TTO may reserve the right to appoint its counsel at its own cost.

  3. Working with intermediaries: A few institutions identified the potential value added in working with aggregators of IP in certain technology areas. However, many highlighted the challenge in differentiating between trolls and aggregators. Aggregators are striving to aggregate IP in ways that are valuable and ensure the freedom to operate, which some participating institutions indicated as being a good thing for companies.  Some non-practicing entities (NPEs) have approached TTOs to extract value from their portfolios and litigate on their behalf. The concern for institutions is being able to readily distinguish between the range of NPEs to avoid “trolling” NPEs. One institution wondered if there was a test available to distinguish an aggregator from a troll.

To better ensure successful outcomes, all parties involved in IP negotiations should have a good understanding of intellectual property and contract basics, and their particular needs and goals.

Theme 5: Information sources

What types of information sources do you consult to help make strategic decisions regarding patents?

Institutions spoke of their efforts to gather patent and market information in an effort to understand what the market and value for an invention was right now. They indicated that they do little to monitor fields to identify opportunities for innovative research as it is the professors who make research decisions.

  1. Online sources: Institutions spoke of a number of information sources and strategies they found to be useful, including both public and commercial databases. Key databases included patent search databases e.g., Google patents, USPTO, Espacenet (European Patent Office), Delphion (Thomson Reuters) and various science, industry and market databases.

    There was some discussion around the financial challenges that institutions face in affording subscriptions to commercial databases. A number of institutions spoke of the many advantages that would come from negotiating group rates to different databases.

    When TTOs cannot find what they need through online searches, they also consult their own network, namely, employees in other TTOs who may have complementary subject knowledge. Some institutions noted that they often hire experts who have access to sophisticated data banks as this can be easier, in certain cases, than meeting with potential partners or companies to determine the state of patenting in a particular technology field.

  2. CIPO's databases: Concern was expressed over the functionality of CIPO's patent database. Some indicated that CIPO's database is poor and that they do not make use of it. They indicated that it is difficult to print from, and one cannot easily manipulate the text or search using keywords. They would like to be able to download the entire document, and not be limited to blocks of text or image files. As well, it was mentioned that TTOs would like to see the entire history of a patent application, similar to what is available in the European registry, where it is possible to see the documents exchanged between the examiner and the patent agent.

  3. IP analytics: Institutions also raised the topic of IP analytics, and specifically, IP landscaping. They indicated that niche and larger institutions in other countries utilize patent landscaping which provides visual representations of patent datasets that can identify, for example, potential industry partners. Several institutions indicated that they would benefit from access to such intelligence as it would enable them to target key companies that are involved with technologies. It would address a significant challenge that TTOs currently face with respect to matching specific technology innovations with industry partners, and allow them to identify a best fit while also providing negotiating leverage. Also raised was the issue that TTO generalists need to access domain knowledge as quickly as possible to do an assessment of an innovation from a patent and market perspective, and then make informed decisions. Visualization tools enable a tremendous amount of intelligence to be gathered in a short amount of time.

Improved search capabilities and access to data sources and landscaping tools would benefit TTOs, particularly smaller institutions, to help them quickly gather strategic intelligence to triage ideas.

Theme 6: Patent awareness

Please describe the patent awareness activities your office undertakes, both internal (to faculty and students) and external.

TTOs engage in a variety of activities to raise awareness at their universities. However, some TTOs indicated that they themselves did not have sufficient resources to undertake a substantive awareness program. Faced with resource constraints including limited staff and funding, they engage in targeted activities, and carefully select resources to inform their outreach efforts. Institutions identified a range of considerations informing their awareness activities:

  1. Outreach activities: TTOs conduct a number of outreach activities on campus to increase awareness around patents and the patent process. They attend events on campus including classes to reach students, and some TTOs offer training to faculty and staff. Also, it was mentioned that patent agents will come to speak to students and faculty in partnership with TTOs to help raise awareness around patenting. 

    Key points of note:

    • A range of strategies were mentioned: one-on-one meetings; meeting with new faculty members; vertical and horizontal strategies (vertical up to deans, horizontal across faculty) so that faculty knows they have support higher up.   

    • TTOs also spoke of bringing in patent agents and hosting IP 101 seminars and workshops in hospitals and labs. However, this led to some discussion that often presentations tend to be “let me tell you what a patent is…” rather than being from the researcher's perspective.

    • Some institutions use their websites to disseminate information about patents. This allows them to ask individuals to read material before having a meeting so that the basics have been covered and discussion can focus more on value-added and context-specific issues.

    • Externally, there is a need to educate potential partners on university policies, to give them a better understanding of the university's needs and pressures. One TTO referred to hosting open houses for external people.

    All institutions acknowledged that this was a resource capacity issue, and many expressed concerns that there may be innovations with potential value that remain on university shelves.

  2. CIPO resources: A number of institutions indicated that CIPO's IP case studies were very good and well used by their universities, and would like CIPO to develop more case studies. It was also raised that CIPO's product offerings should be available online, suggesting that CIPO move away from paper to entirely online delivery. Some TTOs noted that they make use of instructional videos contained on the USPTO and EPO websites, and would like to see similar product offerings from CIPO.

TTOs would like all of CIPO resources to be available online and presented in a more dynamic format, such as video clips. CIPO may also wish to consider identifying critical steps in the application process that would be most effectively explained using video clips and similarly dynamic content.

Theme 7: Suggestions for CIPO

Towards the end of the roundtable discussions, institutions were asked to identify how CIPO could provide better support for their offices. They indicated that CIPO should enhance its efforts in assisting them through the provision of information-related activities and services, and identified the following subject areas as avenues for CIPO to better support their offices:

  1. Information offerings: TTOs made it clear that CIPO's website must be modernized. This would include: the breadth and depth of data available (e.g., file history); the format of the information; and the overall navigability of the site. 

    CIPO's IP case studies were raised as being very useful on campus. A request was made for more case studies on the effective use of IP and commercialization. As well, it was raised that TTO staff would benefit from specific training to enable them to more easily access relevant information to inform decision-making, as well as to better advise faculty and deliver training on campus. Some saw CIPO taking on some awareness or facilitation role with respect to the most up-to-date commercial and public tools that could be used to support strategic decision-making in IP.

  2. Public awareness around IP: It was raised that if CIPO increased public awareness around IP in general, this would help them in their awareness activities on campus. It was also suggested that CIPO's CEO take on a more high profile role, speaking with media and generally building a raised profile informing Canadians on patent-related issues. As well, TTOs would like CIPO representatives to visit campuses to provide them the opportunity to hold some events to get faculty together and raise awareness. CIPO should also be present at events and activities that bring together researchers from across the university. Also, CIPO could increase its profile among TTOs by actively participating in ACCT conferences. Speaking to CIPO's regional presence, one institution noted that business development officers can be a good local resource, and that building relationships and trust is critical as this is a contact sport.

  3. Increase harmonization between CIPO and other IPOs, in particular the USPTO: TTOs work heavily with patent systems in both Canada and the United States, and some institutions indicated that greater harmonization of the patent process between offices in both countries would greatly assist TTOs in their patenting work. In particular, CIPO is uniquely positioned to understand the flow of applications between Canada and the US, and can learn from the experience of businesses and TTOs, and share this information with other potential applicants (i.e., expectations, best practices).

  4. Explore a potential role for IP analytics (e.g., landscaping) to assist TTOs to locate industry partners: Institutions indicated that patent landscaping has the potential to help them to locate industry partners by technology. Patent landscaping provides a visual representation of patent ownership and can be used to identify patent activity leaders, and potential collaborators by area of innovation. This would assist TTOs in their initial assessments and to identify potential industry partners for collaboration and licensing purposes.

  5. Represent TTO experiences and needs to other government departments: It was suggested that if the Government wants to support the knowledge economy, it must support efforts to reinforce the value of IP. For instance, it was suggested that there may be a role for CIPO in the training of government officials in front-line programs that touch on IP.

V. Conclusion

The TTO roundtables fulfilled the objective of enabling CIPO to gain a better understanding of the patent-related needs of technology transfer offices and to help identify areas where the organization could most effectively support their efforts to maximize university innovation efforts.

TTOs not only shared the challenges posed by the IP system from their experiences, but provided a number of very constructive suggestions that have been captured in this report. CIPO will assess the findings and suggestions contained in this report to determine initiatives that the organization could most effectively pursue to assist TTOs.

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