By Dr Liz Philpots, Head of Research & impact, AMRC

Published: 22 March 2018

Medical research charities want patients to benefit from the research they fund. Protecting discoveries and exploiting intellectual property (IP) are vital stages in the development of new drugs and treatments. To do this, we need to have the right terms and conditions when grants are awarded.

Our original guidance was developed in 1997, and we are consulting on a revised version.

This blog provides some background.

In the beginning

AMRC first developed guidance on IP for its members in 1997 and have provided additional support via reports on innovation and commercialisation.

The 1997 revenue sharing model was based on the Wellcome Trust’s model at the time and advocated a 35%/65% split of revenue between charity/university, and also allowed for a Technology Transfer Office (“TTO”) fee of up to 30% of cumulative net revenue to cover the costs of the organization leading exploitation (in most cases the university).

In the intervening 20 years, all parts of the research ecosystem have become more focused on ensuring that research is translated and exploited. Within the university sector, a number of reports have advised how this could be streamlined (Hargreaves review 2011Dowling review 2015; Government’s Industrial Strategy ‘Building a Britain fit for the future’ ).

At the same time, charities have become much more aware of their responsibility to be actively involved in the management of IP to:

  • ensure that equitable revenues are returned to the charity
  • increase knowledge of how IP is being exploited as a measure of impact
  • reduce any reputational risk (where charity funded IP is exploited in ways that might not align with the charity’s objects or policies)

 Times are a changing

During 2016-17, AMRC convened a group of legal, business and research advisors from member charities to review these guidelines and compare them to standard practice. They found that many charities had refined their approach to IP, particularly around revenue sharing as outlined below (see annex 1 on the consultation for more information

BHF - Revenue split 45:55 (funder: university) with a sliding scale for TTO fee (30%-10%)

CRUK – Revenue split 60:40 (funder: university) unless there is a specific agreement between the University and CRT.

Fight for Sight - 50:50 split of revenue (over £10,000) with no technology transfer fee

Parkinsons UK - 50:50 split of revenue with no technology transfer fee

Prostate Cancer UK - 50:50 split of revenue with no technology transfer fee

Stroke Association - 50:50 split of revenue with no technology transfer fee

Wellcome’s Innovator Awards - 40:60 (funder: university) split for revenue over 500K, with no technology transfer fee

The  2018 guidance has been revised to take into account changes in best practice around revenue sharing models. Specifically, the guidance:

  • establishes that technology transfer fees are not automatically allowable, but provides for universities to obtain a 5% -10% administration fee; 10% for cumulative net income up to £100,000 and then 5% for income above that. Direct costs related to protecting funded intellectual property continue to be recoverable in the normal fashion
  • recommends that once direct costs and any administration fee have been accounted for, the remaining net income should then be evenly distributed between the institution and the funder on a 50:50 basis

The guidance is for our members to adopt as they see fit and it is understood that not all members will adopt it entirely.   In particular, the Wellcome Trust has already indicated that, in the short term, it will continue to use its new model for revenue sharing for its Innovator Awards, and anticipates introducing further changes to its revenue sharing model across all its awards with the aim of better incentivising translation.

Consultation questions

AMRC is inviting stakeholders to comment on these revisions, and on the guidance as a whole. We are particularly interested to hear of:

  • instances where this new guidance would prevent a research organisation from accepting an AMRC funder’s grant
  • examples where are a higher administration fee may be warranted
  • experiences of UK or international funders on revenue sharing arrangements with UK universities

Please submit your response to [email protected] by 4 May 2018.

And it doesn’t stop there

We know that managing IP is an area where many funders have lots of questions. We will be holding a workshop to help funders understand where IP can arise and how they can support and encourage its development, so look out for it on our events page. Funders can also talk to colleagues at LifeArc who bring a broad range of expertise in technology transfer, licensing, IP management and therapeutics and diagnostics development.