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Commercialisation_Utilisation_Plan_Guidelines

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					         Cooperative Research Centres
                 Programme



   Commercialisation and Utilisation
         Plan Guidelines


                          April 2004




16-18 Mort Street   GPO Box 9880        Tel: (02) 6240 8111     www.dest.gov.au
Canberra ACT 2601   Canberra ACT 2601                         ABN 51 452 193 160
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                             CRC Programme Commercialisation and Utilisation Plan Guidelines




TABLE OF CONTENT


1.    Introduction............................................................................................................... 2

2.    Relationship to the Commonwealth Agreement ....................................................... 2

3.    Developing a Commercialisation and Utilisation Plan .............................................. 3

4.    Assessment of the Plan ............................................................................................ 5

5.    Reporting to the Department against the Commercialisation and Utilisation Plan .... 5

6.    Lodging and Amending the Commercialisation and Utilisation Plan ......................... 5

7.    Privacy...................................................................................................................... 6

8.    Freedom of Information ............................................................................................ 7

9.    Assistance and Further Information .......................................................................... 7

Attachment ...................................................................................................................... 8
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                        CRC Programme Commercialisation and Utilisation Plan Guidelines



1.       Introduction
The CRC Programme Guidelines for the 2002 selection round sought to maximise the benefits
to Australia of publicly funded cooperative research, measured in terms of economic, social,
and environmental outcomes. The effective use and commercialisation of intellectual property
(IP) developed by a CRC is an important means of meeting this objective. The
Commercialisation and Utilisation Plan outlines the planned use and commercialisation strategy
(path to adoption) for IP resulting from the operations of a CRC.

In accordance with clauses 9.5 and 9.6 of the Commonwealth Agreement, each CRC funded
from the 2002 selection round must develop and implement a Commercialisation Plan. A
Commercialisation and Utilisation Plan as outlined in these guidelines will meet the
requirements of clauses 9.5 and 9.6.

These guidelines are intended to assist CRCs develop a Commercialisation and Utilisation Plan
acceptable to the Department of Education, Science and Training. They cover the requirement
specified in clauses 9.5 and 9.6 of the Commonwealth Agreement for the development of a
“Commercialisation Plan”.


2.       Relationship to the Commonwealth Agreement
Clause 9 of the Commonwealth Agreement defines the obligations of the CRC (“the
Researcher”) in relation to IP, and should be read in conjunction with these guidelines.

Central to this is the requirement that a CRC “use its best endeavours to Commercialise or
otherwise make available any Intellectual Property in Contract Material to maximise the national
benefits accruing to Australia, including Australian industry, the Australian environment and the
Australian economy generally. The use and exploitation of such Intellectual Property must be
consistent with the Objectives of the CRC Programme.” (Clause 9.4).

The fundamental concept that needs to underpin a CRC‟s Commercialisation and Utilisation
Plan is that of „maximum national benefits‟. Clause 9.4 states that „the maximum national
benefits accruing to Australia will be deemed to have been delivered where the Intellectual
Property in Contract Material is commercialised or otherwise made available in a way that
results in industry expansion or activity within Australia. Where there are no opportunities for
commercialisation within Australia and the commercialisation of the Intellectual Property occurs
in a country other than Australia, the Intellectual Property must be commercialised in such a
way that substantial national benefits will accrue to Australia‟.

By way of clarification, „national benefits‟ is not intended to be interpreted in a narrow sense and
could include benefits that occur at a local or regional level that benefit Australia.

National benefits could be demonstrated to be accruing through a range of measures such as:

         financial returns to Australian CRC participants through royalties, licence fees, equity,
          dividends or outright sale;
         productivity gains by Australian firms or industries;
         export development and/or import replacement;
         development of strategic industry clusters;
         enhancement of Australia‟s skill base;
         consumer and user benefits through higher performance, higher quality, and cheaper
          products or services;
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                        CRC Programme Commercialisation and Utilisation Plan Guidelines



         provision of higher quality or cheaper inputs for industries which constitute a
          significant proportion of the Australian economy;
         enhancement of national and/or resource security;
         development of a field or area of research not currently well represented within Australia,
          but which would enhance Australia‟s overall innovation capacity;
         enhanced delivery of public programmes that address social, health and/or
          environmental issues that are particularly prevalent within Australia;
         maintenance of Australia as the home base for future Research and Development
          (R&D), manufacture or product development;
         increase in the number of employees in any relevant company‟s/organisation‟s
          operations based in Australia;
         increase in the economic benefits to Australian residents through royalties, licence fees,
          equity, dividends or outright sale; and
         ongoing delivery of the commercial outcomes through spinout companies.

A Commercialisation and Utilisation Plan must be finalised within 2 years of the establishment
of a CRC, and the CRC is responsible for keeping the Plan updated until it ceases operations
(Clause 9.6).

The Commercialisation and Utilisation Plan must be a strategic document that:

         outlines the value (identifying the commercial, social, and/or environmental value) of the
          IP developed or expected to be developed by the CRC;
         identifies the strategy to be employed by the CRC to realise the value of the Intellectual
          Property, ie to return this value to the CRC or to other Australian entities/recipients more
          generally; and
         identifies how the strategy satisfies the maximum benefit to Australia test (Clause 9.4).

For the purpose of these guidelines, the definitions of „intellectual property‟ and
„commercialisation‟ are the same as those in the Commonwealth Agreement. „Market‟ means
all intended users of CRC IP including industry, CRC participants, Government agencies, other
policy users and other public or private sector bodies or organisations. „Market‟ incorporates
both commercial and non-commercial adoption of CRC IP.


3.       Developing a Commercialisation and Utilisation Plan
A Commercialisation and Utilisation Plan should be a strategic, „living‟ document that assists
CRCs to align their on-going activities with market needs. It should state very clearly at the
outset what the objectives and outcomes of commercialisation are intended to be.

The plan should include the following 3 sections:

Market Potential and Monitoring

This section should be based on the information supplied in the application for CRC funding in
order to meet the selection criteria on commercialisation and utilisation and reflect
developments since the application was lodged. It should identify target markets for CRC IP,
the general characteristics of these markets, and how the strengths and weaknesses of the
CRC position it to respond to market opportunities and threats (this section should include an
assessment of the CRC‟s competitive advantage in the market).
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                      CRC Programme Commercialisation and Utilisation Plan Guidelines



Within this context, a description of the IP and its value (commercial, social, and/or
environmental) developed or expected to be developed by the CRC should be outlined. A brief
explanation of where the value in the IP will lie, that is, what the competitive advantage of the
good/service/process is envisaged to be, should be provided.

This section should also detail how the CRC monitors its target markets, including the market
analysis techniques employed by the CRC and how changes in market requirements flow
through to a realignment of CRC priorities and activities.

Strategy to Realise the Value of IP

This section must detail the operational and governance mechanisms employed by the CRC to
ensure that the return from the IP is realised in a manner that will deliver maximum national
benefits. What must be outlined here is the way in which the CRC will organise itself and its
operations, and what kinds of structures or mechanisms will be established to ensure that the
utilisation and commercialisation objectives will be achieved. The human and financial
resources to be employed must also be specified.

The Plan must describe the proposed business model or pathway for taking the IP to market or
end-use. For example, will it be through licensing, establishment of a spin-out company,
consulting services, trade sale, sharing knowledge with others or other technology transfer etc?
If it is through a spin-out company, will the company be governed by an independent board?

Where the proposed business model will require investment capital, this section also needs to
identify approaches the CRC intends to adopt to access potential sources of investment
finance.

It must also detail how any SME participants and other industry related SMEs will be
incorporated into the process of commercialisation and utilisation.

The Plan should also confirm that the CRC has in place IP Management strategies consistent
with the National Principles of IP Management for Publicly Funded Research. The purpose of
these principles is to assist researchers, research managers and their research institutions in
ensuring that they have access to best practices for the identification, protection and
management of IP, and therefore, to maximise the national benefits and returns from public
investment in research. The principles are outlined in the Attachment to these guidelines.

The means through which a CRC‟s Governing Board assesses whether proposed
commercialisation activities meet the „maximum national benefits‟ requirements of the
Commonwealth Agreement should be clearly detailed.

Strategies employed to provide staff and students with IP and commercialisation training, and
engender an „outcomes‟ focussed culture within the CRC should also be discussed.

Finally, this section should include a critical time path for taking the IP from the R&D stage to
market adoption, including milestones for assessing progress. It should also indicate how the
proposed time path for taking IP to market adoption will be catered for in the wind-up strategy of
the CRC.

Measuring and Communicating National Benefits

This section must detail how a CRC measures the national benefits accruing from the
commercialisation of CRC IP. These measures can be quantitative and qualitative and must be
consistent with the performance measures in the Commonwealth Agreement and with the
Department‟s reporting requirements as they evolve.
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                        CRC Programme Commercialisation and Utilisation Plan Guidelines



A communication strategy focussed on informing users, including relevant industry sectors and
the Australian public, of the performance of the CRC in delivering benefits to stakeholders also
needs to be articulated.


4.       Assessment of the Plan
The Commercialisation and Utilisation Plan will be assessed by the Department against the
requirements set out in these guidelines and Clause 9.5 of the Commonwealth Agreement.

Clause 9.6 of the Commonwealth Agreement requires the Commercialisation and Utilisation
Plan to be finalised within two years of the establishment of the CRC and kept up to date until
the CRC ceases its operation. It also requires that the Commonwealth be provided with a copy
of the Plan or updates of the Plan within 20 days of their finalisation.

Under Clause 9.7, the CRC cannot commercialise or otherwise make Intellectual Property
available to third parties until 60 days after a copy of the Plan has been provided to the
Commonwealth. If during that period, the Commonwealth advises the CRC in writing that the
Plan does not comply with the requirements of Clause 9.5 or it is not satisfied that the planned
use and commercialisation strategy for the Intellectual Property will deliver maximum national
benefit to Australia, the CRC must make amendments to the Plan to address these defects.


5. Reporting to the Department against the Commercialisation and
Utilisation Plan
Commercialisation and Utilisation Plans will be used in the regular reporting cycle of CRCs, as
specified in Clause 13.2 of the Commonwealth Agreement and below:

         at the review points designated by the Department , CRCs will be required to
          demonstrate how they are maximising the benefits to Australia through the
          commercialisation of CRC IP; and
         the Annual Report Guidelines will require CRCs to specify all new IP developed, sold,
          transferred or licensed, and how these activities will accrue the maximum national
          benefits. The Annual Report Guidelines will also require CRCs to report on how their
          commercialisation and utilisation activities are consistent with their Commercialisation
          and Utilisation Plan. This can be provided as a separate, confidential document if
          necessary.

Please note: The giving of false or misleading information is a serious offence under the
Criminal Code.


6. Lodging and Amending the Commercialisation and Utilisation
Plan
The Board, through its Chairman, needs to indicate that it has approved the Commercialisation
and Utilisation Plan.

A CRC must lodge or provide a copy of its Commercialisation and Utilisation Plan to the
Commonwealth as per Clauses 9.6 and 9.7 of the Commonwealth Agreement. If within 60 days
of lodging the Plan the CRC has not received written advice from the Commonwealth identifying
defects in the Plan, then the Plan takes force (Clause 9.7).
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                        CRC Programme Commercialisation and Utilisation Plan Guidelines



If defects are identified, they must be remedied through amendment and the amended Plan
resubmitted to the Commonwealth within 30 days. The Commonwealth will advise the CRC in
writing within 30 days of receipt of the amended Plan, whether it is approved.

It is expected that CRCs will regularly review and in some cases make amendments to their
Commercialisation and Utilisation Plan. In accordance with Clause 9.6 of the Commonwealth
Agreement, any CRC amending its Commercialisation and Utilisation Plan must provide a copy
of the amended Plan to the Commonwealth within 60 days of its finalisation.


7.       Privacy
The Department is bound, in administering the Cooperative Research Centres Programme, by
the provisions of the Privacy Act 1988. Section 14 of the Privacy Act contains the Information
Privacy Principles (IPPs) which prescribe the rules for handling personal information.

Persons, bodies and organisations involved in the Cooperative Research Centres Programme
must abide by the IPPs and the Privacy Act when handling personal information collected for
the purposes of that scheme/programme. In brief, persons, bodies and organisations must
ensure that:

         personal information is collected in accordance with IPPs 1-3;
         suitable storage arrangements, including appropriate filing procedures are in place;
         suitable security arrangements exist for all records containing personal information;
         access to a person‟s own personal information held by the organisation is made
          available to the person at no charge;
         records are accurate, up-to-date, complete and not misleading;
         where a record is found to be inaccurate, the correction is made;
         where a person requests that a record be amended because it is inaccurate but the
          record is found to be accurate, the details of the request for amendment are noted on
          the record;
         the personal information is only to be used for the purposes for which it was collected, or
          for other purposes where expressly allowed by IPP 10; and
         personal information is only disclosed in accordance with IPP 11.

Privacy Complaints and Advice

Complaints about breaches of privacy and requests for advice about privacy should be referred
to the Litigation and External Review Section, Procurement, Assurance and Legal Group, in the
Department of Education, Science and Training's National Office. Privacy complaints can be
made directly to the Federal Privacy Commissioner, however, the Federal Privacy
Commissioner prefers that the Department be given an opportunity to deal with the complaint in
the first instance.
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                     CRC Programme Commercialisation and Utilisation Plan Guidelines




8.   Freedom of Information
All documents created or held by the Department with regard to the Cooperative Research
Centres Programme are subject to the Freedom of Information Act 1982 (“FOI Act”). Unless a
document falls under an exemption provision, it will be made available to the general public if
requested under the FOI Act.

All FOI requests are to be referred to the Principal Government Lawyer, Litigation and External
Review Section, Procurement, Assurance and Legal Group, in the Department's National Office.
Decisions regarding requests for access will be made by the authorised FOI decision-maker in
accordance with the requirements of the FOI Act.


9.   Assistance and Further Information
Questions about the preparation or amendment of Commercialisation and Utilisation Plans
should be directed to the relevant Assistant Manager in the CRC Programme Section.
                                                                  Attachment



     NATIONAL PRINCIPLES OF INTELLECTUAL PROPERTY
      MANAGEMENT FOR PUBLICLY FUNDED RESEARCH


                                            The Australian Research Council
    The Australian Tertiary Institutions Commercial Companies Association
                                 The Australian Vice-Chancellors’ Committee
                   The Department of Education, Training and Youth Affairs
                        The Department of Industry, Science and Resources
                                                                 IP Australia
                         The National Health and Medical Research Council

Foreword
Introduction

Principles
   1. Institutional Policies

   2. Identification of IP

   3. Protection of IP

   4. Ownership of IP

   5. Assessment of Existing IP

   6. Management of IP

   7. Sharing of Benefits

   8. Transparency and Reporting

   9. Potential Conflict of Interest

Commercialisation of Research Findings




September 2001                                                           8
FOREWORD
Knowledge and research findings have become the most important resources, and the
key elements, in the new business paradigm for economic development. The
Government‟s strategic policy direction to reinforce research investment and
commercialisation is clearly reflected in a number of reports and discussion papers,
including, the Health and Medical Research Strategic Review (Wills Report)1; Knowledge
and Innovation: A policy statement on research and research training (White Paper)2; the
Science Capability Review Chance to Change3; and the Innovation Action Plan: Backing
Australia's Ability4. It has become essential, at both institutional and national levels, that
appropriate principles and mechanisms are in place to identify, protect, develop and
commercialise these resources.

To this end, a working party was established that comprises some key organisations
involved with, or with an interest in the outcomes from, publicly funded research in
Australia: the Australia Research Council (ARC), the Australian Tertiary Institutions
Commercial Companies Association (ATICCA), the Australian Vice-Chancellors‟
Committee (AVCC), the Department of Education, Training and Youth Affairs (DETYA),
the Department of Industry, Science and Resources (DISR), IP Australia and the
National Health and Medical Research Council (NHMRC). These agencies have worked
together to develop a consistent national framework for the management and the
exploitation of intellectual property (IP) generated by publicly funded research.

The purpose of developing the National Principles of IP Management for Publicly
Funded Research is to assist researchers, research managers and their research
institutions, in ensuring that they have access to best practices for the identification,
protection and management of IP, and therefore, to maximise the national benefits and
returns from public investment in research.

It is important to emphasise that the public research funding agencies, including the
ARC, the NHMRC and other government agencies, will continue to support the best
research in the national interest and will continue to pursue the vision of advancing the
nation‟s capacity for quality research for the economic, social and cultural benefit of the
community. The ARC and the NHMRC do not wish to hold a stake in direct ownership of
IP nor do they intend to benefit directly from commercial outcomes of the research
funded through their financial support. The intention of the National Principles is simply
to improve the commercial outcomes from publicly funded research where a commercial
outcome is appropriate.




1
  The Health and Medical Research Strategic Review ‘The Virtuous Cycle: Working together for health and
medical research’ (1999). Commonwealth of Australia
2
  Knowledge and Innovation: A policy statement on research and research training (2000). Commonwealth
of Australia
3
  Australian Science Capability Review, ‘The Chance to Change’ (2000). Commonwealth of Australia
4
  Backing Australia’s Ability: an innovation action plan for the future (2001). Commonwealth of Australia


September 2001                                                                                     9
The National Principles are expected to evolve over time in the light of the experiences
of the funding agencies, research institutions and researchers. Organisations may wish
to develop their own detailed IP management strategies within the framework of these
principles to best suit their particular environments and needs. The NHMRC recognises
that further consideration needs to be given to intellectual property issues in health and
medical research involving indigenous people and communities, and where research
has the potential to benefit public health in an international context5.




5 World Health Assembly Resolution WHA54.13 and (draft)A54/48, May 2001 http://www.who.int/wha-
1998/EB_WHA/english/newANG_navigat.htm



September 2001                                                                           10
INTRODUCTION
What is Intellectual Property (IP)?
IP is generally regarded as representing ‘... the property of your mind or intellect.6’
Methods for the protection and exploitation of IP include, but are not limited to:

            patent for new or improved products or processes;

         copyright for original material in literary, artistic, dramatic or musical works,
        and in other works that include films, broadcasts, multimedia and computer
        programs;

         trade mark for words, symbols, pictures, sounds, smells or a combination of
        these, to distinguish the goods and services of one trader from those of another;

            design for the shape or appearance of manufactured goods;

         circuit layout right for the 3-dimensional configuration of electronic circuits
        in integrated circuit products or layout designs;

            plant breeder's right for new plant varieties;

         trade secret including know-how, other confidential or proprietary information
        and background knowledge.

Many of the major issues concerning IP relate to the inventor‟s and/or owner‟s legal
rights to exploit this property. Many of these issues, at least in the context of the
university environment, have been canvassed in detail by the AVCC7.

Certain types of IP require registration with a relevant Government agency, for example
patents, trademarks and designs. Other IP, such as copyright, does not, even though the
rights associated with it are strongly established by legislation and legal precedent. Still
other types of IP, for example trade secrets and know-how, can be protected only under
the Common Law.




6
 IP Australia (2000)
7
  Australian Vice-Chancellors’ Committee (1995) ‘Ownership of Intellectual Property in Universities’ -
under review


September 2001                                                                                     11
PRINCIPLES
1. Institutional policies

Research institutions will have policies approved by their Governing Body relating to the
ownership, protection and exploitation of IP.

2. Identification of IP

Research institutions will have procedures that provide support to publicly funded
researchers so that they can recognise when their discoveries may have potential
commercial value and provide for a review process to identify IP that can be protected
and/or exploited.

3. Protection of IP

Research institutions will have policies that make clear to staff their responsibilities in
relation to IP protection including, where appropriate the maintenance of research
laboratory records and the prevention of premature public disclosure of research results
prior to obtaining IP protection.

Institutions should provide, wherever possible, assistance to researchers in fulfilling
these obligations and responsibilities as well as rewarding and encouraging their
participation in any subsequent commercialisation process.

4. Ownership of IP

Public funding agencies should have a clear policy on whether they will claim any
ownership and/or associated rights for IP generated from their supported research.
Recognising the Common Law rights of research institutions as employers, the
ownership and the associated rights of all IP generated by the NHMRC and the ARC
supported research will initially be vested in the research institutions administering the
grants.

Research institutions will have policies and relevant procedures in place for determining
the subsequent ownership and/or assignment of IP rights, and will have clear
agreements with employees and grant holders registered through the research
institutions on ownership and/or associated rights of IP.

Research institutions will also have clear policies and agreements in place regarding
students including postgraduate students, who are not covered under the Common Law
in this context, on ownership of IP generated during their course of study, research and
training.

Particular attention should be given to cases where IP impinges or potentially impinges
on the cultural, spiritual or other aspects of indigenous peoples.




September 2001                                                                         12
5. Assessment of existing IP

Institutions will have procedures in place to guide researchers in assessing the existing
IP in the field that is likely to affect their research in order to determine their freedom to
operate in that field of research.

6. Management of IP

Research institutions will have procedures for the regular review of IP and associated
commercial activities and outcomes arising from publicly funded research.

Research institutions will have procedures in place to provide advice to the creators of
the IP on the options that are available for commercialising IP.

7. Sharing of benefits

Research institutions will have policies that recognise the rights and needs of all
stakeholders involved in the research supported by public funds.

These policies will define the way in which benefits from the development and
exploitation of the IP will be allocated.

8. Transparency and reporting

In order for funding agencies to fulfil their reporting requirements to the government on
the outcomes of the funded research, research institutions must be in a position to report
annually on IP management of their publicly funded research.

9.   Potential conflict of interest

Research institutions will have policies and procedures that provide guidance in relation
to potential conflicts of interest concerning ownership, management, protection and
exploitation of IP.


COMMERCIALISATION OF RESEARCH FINDINGS
Research institutions, and where appropriate, individual researchers, are expected to
consider the most appropriate way of exploiting the IP generated from publicly funded
research It is acknowledged that there is no single „best approach‟ for commercialising
(or exploiting) IP, and each case should be considered individually. Options range from
exclusive and non-exclusive licences, research agreements or contracts through to joint
ventures or the establishment of spin-off companies.




September 2001                                                                           13

				
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