Helping charity-funded IP flow: A support manual for the community Purpose and scope This best practice manual has been produced by AMRC’s Intellectual Property Advisory Group (IPAG) which is comprised of representatives from charities, academic institutions and commercial organisations, with the aim to support effective communication and negotiation around the commercialisation of IP. It clarifies some of the more complex issues in the area and helps resolve common problems that arise across the community of IP generators, funders and licensees. We recognise that the research community and the charity sector are currently grappling with the immediate impacts of the COVID-19 crisis. But we wanted to share this manual to aid any ongoing IP-related discussions during this challenging time. All participants involved in the commercialisation of IP have a shared purpose: Sustainable translation of ground-breaking research into assets that transform patients’ lives and benefit society This manual is designed to help negotiations and transactions run smoothly across these groups which enable the IP to flow, and improve the lives of today’s and tomorrow’s patients. It does so by: increasing the shared understanding between the groups; providing best practice behaviours around what needs to be communicated and when; enabling all parties to obtain quality, timely independent advice on value and process steps. It is NOT designed to define or specify the financial terms of IP-related deals. It is specifically intended to expand and support the sections relating to reporting and consent provided as part of the AMRC’s Guidance on intellectual property (IP) terms and conditions. We welcome feedback on how useful you find the manual and any other areas where you would welcome clarification. In addition to this manual, we have a list of experts who have agreed to make themselves available to advise charities on matters related to IP arising from university research, knowledge exchange or the commercialisation of the results of university research. Please note that some advisors may be willing to give advice on a voluntary basis, but their time will be limited as they are likely to be offering their time in addition to fulfilling a full-time job. In other cases advisors may be able to offer longer term support but may need to charge for their services. If you seek their advice, please ensure that you are clear upfront on the terms on which advice is being provided. Please contact our Research Policy Manager Mehwaesh to request the IP advisors list or if you have any feedback on this manual. Executive Summary The impact of medical research on patients is at the heart of charity funding decisions. Research grants are given to generate knowledge and know-how, not with an expectation of economic return. All IP generated - whether economically valuable or not - should be used to increase societal benefit through research or product development. Any economic value derived from this IP is an important by-product of charity funding. In entering an agreement associated with IP commercialisation, it is vital that each party is aware that their contribution is a link in a larger ‘value chain’. That value chain includes charities, researchers, universities, knowledge transfer organisations, commercial partners, healthcare providers each of whom may be required to take risks in getting products to patients. Each party invests in long term infrastructure development and short-term specific projects. Each has reputation and sustainability at stake. Each link is important, and everyone involved has a shared interest in keeping the flow of delivery to the end beneficiary working. All parties should see themselves as ‘co-investors’ carrying elements of risk and opportunities for positive return. Negotiations across the chain must be pragmatic and recognise the challenges all parties are facing, and the specific resources they are putting into creating or developing the asset in question. Wider investment decisions that each party makes – or the business models they may adopt - can form a part of the conversation but may be incidental to the specific agreement required at each link in the chain. Two key considerations in managing any discussion around IP are mutual understanding and effective communication. Communication must be clear, and timely, and those involved must be respectful of other positions. There is no one-size-fits-all solution, but there are some core principles that run through every negotiation to reach a successful agreement, which are: Be pragmatic Be clear from the start – including the lines you are not prepared to cross Understand other parties’ barriers Agree reporting needs and timings in advance Don’t delay the commercialisation process unnecessarily Two key challenges for charities and academic institutions are the issues of reporting on the status of the IP and of requesting ‘permission to commercialise’ the IP. This manual deals with both. It does NOT offer guidance on the economic outcomes of the negotiation. 1) Reporting requirements: These generally occur in two phases: during grant giving, when charities may ask whether any IP is likely to arise from the research, and then at regular times (agreed in advance) once the IP arises. Any specific reporting needs (e.g. what should be reported and how often) should be agreed in the relevant charity terms and conditions of funding. Academic institutions should not be asked to report on information they would not normally gather as part of their processes to protect and commercialise IP. Only information that is readily available should be asked for. Standardised templates for reporting are useful but they are not yet commonplace. A potential template is attached in the appendices. 2) Permission to commercialise IP: Charities should be notified of any proposals to commercialise the IP from research they have funded. This is particularly important so they can manage the expectations of their donors and trustees when the news becomes public. Permission should also be sought from the charity about whether or not to commercialise the IP. Most charities want or are required to be asked to give that permission before any agreements to commercialise are signed. Permission should not be withheld unreasonably. Charities should be clear on the stage at which they expect or require to be consulted and then give their answer within a recommended time frame of 30 days. Resource 3 helps to define reasons why permission might be withheld. The Value Chain This diagram shows how each member in the chain invests in long term infrastructures and short term projects. It shows how each participant takes and shares risk along the way. It demonstrates that there are more similarities than differences between the participants in the value chain, and supports the proposition that each should be treated as co-investors in any IP that moves along it. It can be used to better understand the issues faced by counterparts in any negotiation, and provides insight into how each party can help the other achieve their shared purpose. Executive Summary Introduction Reporting Requirements Permission to commercialise IP Resources Introduction Charitable funders and the recipients of such funding agree that their primary goal is patient benefit. Institutions and AMRC members wish to work together proactively and positively to enable the translation of promising research into societal gain. The purpose of this manual is to add context to AMRC’s guidance on IP by focusing on two frequent discussion points between charities and institutions: reporting requirements of charities, and the exercise of consent rights (permission to commercialise) by charities in an appropriate and timely manner. It has been compiled by an experienced group made up of UK charities staff and institutions’ knowledge transfer professionals. They are based on many years of working practice but cannot cover every possible circumstance. Ultimately, the best relationships evolve as the result of a trusting, productive and frequent dialogue between the charity and the funding recipient, rather than from the adoption of a highly transactional approach with infrequent communication. This represents standard, best practice for the requests all parties should reasonably make of one another. We recognise that some IP negotiations will require parties to ask more from, or provide more to, each other. For example, a charity may request consent on a final contract to fulfil a specific charitable responsibility, or an institution could request having charity representation in a negotiation with a licensee. However, parties should recognise that such greater demands may increase the complexity of the negotiation and the administrative burden of others in the chain. Consequently, all parties involved should be transparent about any increased burdens such necessary requests may cause and be open to sharing the costs or take them into account in the overall value sharing arrangement.