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Report of the Summary Event of
The Royal Society of Edinburgh
Science Base Research &
Commercialisation Workshops
Held on 20th August 2001
This was held in partnership with:
CONTENTS
Chapter Page
Executive Summary i
Introduction 1
Workshop Discussion 2
Next Steps 6
Acknowledgements 7
Appendices
Appendix A Participants 8
Appendix B Reference Slide 9
Appendix C Reference Tables 10
Appendix D Report of the Glasgow RSE 12
SBRC Workshop
Appendix E Report of the Dundee RSE 31
SBRC Workshop
Appendix F Report of the Edinburgh 39
RSE SBRC Workshop
Appendix G Report of the Inverness 60
RSE SBRC Workshop
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary
EXECUTIVE SUMMARY
From March to June 2001 the Royal Society of Edinburgh (RSE), supported by Technology
Ventures Scotland (TVS) and the Scottish Higher Education Funding Council (SHEFC),
organised a series of Science Base Research and Commercialisation workshops. These were
held in Glasgow, Dundee, Edinburgh and Inverness and aimed to identify and encourage the
adoption of best practice with regard to commercialisation within the Scottish science base. A
summary event was then held at the Royal Society of Edinburgh on Monday the 20th August
2001 to examine the common issues arising from the four regional workshops and identify and
encourage the adoption of best practice. This Executive Summary outlines some key points
from these workshops and provides recommendations for future activity.
1. The relationship between the science base and industry.
During the course of the regional workshops the view was expressed that the short time
horizons and limited funding capability of small-to-medium-sized enterprises (SMEs) seriously
restrict the assistance they can be given by universities. In addition it was noted that the
expertise of Higher Education Institutions (HEIs) is best leveraged through research projects
with a small number of innovative companies rather than attempting to develop relationships
with an inappropriately larger number of small companies.
• It is recommended that SHEFC and Scottish Enterprise (SE) continue to
encourage development of SME-HEI interactions and that TVS should be
involved in this process. Brokering interactions in sectors identified as key to
Scotland’s future will be an important aspect of this.
Improvements can be made in the manner in which the science base markets its expertise to
industry. Examples given included integrating the marketing of external provision with respect to
commercialisation, consultancy and short courses, together with the need for more obvious web
links to university commercialisation offices.
• It is recommended that SHEFC and Universities Scotland continue to work
together to improve the commercialisation services of the Scottish science
base. SE and Highlands and Islands Enterprise (HIE) should also work with
Universities Scotland to identify how Local Enterprise Companies and HEIs
might interact to assist companies in liaising with HEIs.
2. Encouraging commercialisation within the science base.
A range of incentives for staff to commercialise their research was discussed during the
different Workshops, especially with regard to equity and licensing share.
• It is recommended that TVS and Universities Scotland work together to
identify ways of improving the perception of commercialisation by
academics, and in developing responsive guidelines for encouraging
commercialisation within institutions.
During the Workshop series, the potential role for universities in encouraging
graduate/postgraduate start-ups was also examined, with activities at the Scottish Institute for
Enterprise (SIE), Strathclyde University and the London Business School (LBS) being
highlighted as examples.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | i
• It is recommended that TVS should, with SIE, SHEFC, Universities Scotland,
SE and HIE, examine the potential for encouraging and assisting
graduate/postgraduate start-ups.
In relation to commercialisation at smaller institutions, the Summary Workshop noted that there
was a linear relationship between the volume of research and commercialisation success, and
the consequential problems small institutions have in obtaining sufficient financial reward to
justify a technology transfer office.
• It is recommended that SHEFC, TVS and Universities Scotland investigate the
potential in this area for university alliances in commercialisation, and the
potential for multilateral partnerships between businesses, education
providers and research institutes.
3. Measuring success
The Summary Workshop noted that there had been many successes in commercialising the
Scottish science base; however, institutions operate in different ways and it is difficult to make
direct comparisons of commercialisation success and best practice.
• It is recommended that TVS and Universities Scotland establish a forum of
Scottish heads of commercialisation to, amongst other things, identify
appropriate metrics to measure commercialisation success across Scotland;
.
and to discuss best practice in order to achieve this The RSE would be
willing to host such a forum.
4. Future events
The Workshop series has provided an opportunity to explore a number of key issues in the
commercialisation of the Scottish science base and continued provision of such a forum for
dialogue, connectivity and networking would help capitalise on these opportunities.
• It is recommended that the RSE Science Base Research Commercialisation
Workshops continue in further locations throughout Scotland, and include
other aspects of the Scottish science base such at Research Institutes and
the NHS. There is merit in building on the discussions initiated, and issues
highlighted, during this first series of workshops.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | ii
ROYAL SOCIETY OF EDINBURGH SCIENCE BASE RESEARCH AND
COMMERCIALISATION WORKSHOP – SUMMARY EVENT
Introduction
As part of its activities on commercialisation and Foresight the Royal Society of Edinburgh
(RSE) organised a number of Science Base Research and Commercialisation (SBRC)
workshops, supported by Technology Ventures Scotland (TVS) and the Scottish Higher
Education Funding Council (SHEFC). The Workshops were held throughout Scotland in
Glasgow, Dundee, Edinburgh and Inverness and aimed to identify and encourage the adoption
of best practice with regard to commercialisation within the Scottish science base.
Topics covered by these events included spin-outs, licensing, Intellectual Property (IP)
processes, job creation, challenges in engaging the Scottish industrial base, incubators and the
impact of the Research Assessment Exercise (RAE). Copies of the reports of these regional
workshops can be found in the appendices.
The Summary Workshop
A summary event was held at the Royal Society of Edinburgh on Monday the 20th August 2001
with an invited group of science base research and commercialisation representatives from
universities and research institutes, key personnel from government and local hi-tech start-ups.
This event sought to examine the common issues arising from the four regional workshops and
identify and encourage the adoption of best practice.
Introduction by Professor Robert Donovan, FRSE, Vice-President, The Royal Society of
Edinburgh
Professor Donovan welcomed the participants to the meeting and thanked SHEFC and TVS for
their financial support for the meetings. He noted that the coverage of the four regional
workshops did not include the totality of Scotland’s science base and that there was scope for
further regional workshops on this topic.
Professor Donovan emphasised that the aim of the Summary Workshop was not to seek
uniformity across the Scottish science base, with the diversity of its institutions, but to bring
information and ideas together in order to learn from each others experiences and optimise the
commercialisation process. He noted that there were already alliances between institutions in
commercialising the science base (such as between Glasgow and Strathclyde Universities) and
that such alliances were likely to become more important in the future.
In starting the Workshop, Professor Donovan highlighted the recent Times article of 11 August
2001 reporting that the number university firms had tripled during the past three years, providing
clear evidence that the job of commercialising the science base was being done successfully.
However, it was also noted that with a recession in the high technology industries in progress,
further efforts in commercialisation would be needed.
Professor Donovan then invited Professor Boulton to start the Workshop by commenting on the
deliberations of the SHEFC/Scottish Enterprise short-life Task Group on Innovation. Professor
Boulton announced that in setting up the Task Group, the two bodies had thought it was
important to look at how their remits overlapped in exploiting the Scottish knowledge base and
the sorts of polices the two bodies should put in place in this area. He emphasised that the
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 1
Group had taken a broad view of the economic context, and looked at optimal routes to
commercialisation in the universities, IP problems, processes whereby spinout and start-up
commercialisation routes can best be promoted and the way in which the HEI sector might best
assist the range of business (both multinationals and SMEs) in Scotland. He noted that that
while there were no obvious solutions, the Task Group would be announcing its outcomes in
November in terms of the best way of funding such activity and the metrics for success.
Workshop Discussion
The Workshop then turned to the common issues identified from the four Regional Workshops.
Note, emphasis is on the points made rather than the debate which might have surrounded
them, and no value judgement, or approval by the Royal Society of Edinburgh, is implied in
reporting the views expressed at the Workshop.
1) The relationship between the science base and industry.
a) How can the Science Base act as a better source of assistance to SME’s?
It was noted that in the Edinburgh Workshop there had been a suggestion that consultancy
might be the most appropriate route to assist SME’s and that overall there was not much
commercial profit to be had for universities in helping SMEs.
In reply, it was commented that HEI assistance to SMEs was a world-wide problem with no
obvious solution. SME time horizons tended to be too short for University collaborations, their
funding limited, and in general they were looking for technology solutions to their problems, but
not necessarily cutting-edge technology. Consultancy could therefore be used to address this
and, if appropriate, a non-exclusive licence of IP could be sold to the SME to tackle their
problem. It was suggested, however, that to get SMEs to fund research was unrealistic.
In the discussion, the relevance of the Teaching Company Scheme was mentioned as a
mechanism of assisting SMEs. It was also commented that small companies tended to have
problems finding out what was going on in HEIs and Professor Donovan noted that during the
regional workshops it was often heard that SMEs had tried to find help from HEIs without
success. An effective shop window was needed and a number of suggestions were put forward.
One member commented, however, that HEIs wanted more long-term relationships with a
smaller number of innovative companies rather than a larger number of relationships with a
wider SME population.
b) How is the potential of its IPR best maximised by the science base in terms of
licensing and spin-outs and the levels of equity share/royalty return with large
companies and SME’s?
It was commented that not all IP would be commercialisable and commercialisation offices
needed to decide first what element of the IP to protect. Then decisions had to be taken
concerning the exploitation strategy. Some IP could be licensed to larger companies, some to
spin outs, etc. The worst thing, however, would be to insist on one route for political motives,
rather than choosing the most successful route. It was commented by one member that
Scotland had suffered from pressure to create spin-out companies, but that in the US no spin-
out was undertaken through assignation of IP, it was all done through licensing. SMEs were
vulnerable and if they became insolvent their IP would be lost unless it was licensed and not
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 2
assigned to the SME. Another member, commented, however, that there was often an
expectation that IP was an assumed need to create a company. It was also noted that there
was a need for the university’s commercialisation processes to be transparent as some
academics had been deeply disappointed when their IP was not chosen for protection.
c) What’s in a name? University commercialisation office titles include:
• Innovation & Research Office
• Research & Enterprise
• Research & Enterprise Office
• Research & Enterprise Services
• Research & Commercial Development Office
• Research & Consultancy Services
• Research & Innovation
• Research & Innovation Services
• Research Office
• Technology & Research Services
It was noted that following one member’s attempts to look at university web pages to find
information about their commercialisation activity, a number of difficulties had been encountered
in finding the right office. The question was also asked whether there was a forum where the
heads of the Scottish commercialisation offices met as a group. In reply, it was commented that
there was a formal UK gathering (with world-wide linkage) of commercialisation officers, and a
formal meeting of Vice Principals in charge of commercialisation, within Universities Scotland.
However, there had never been a formal liaison of Scottish commercialisation officers, although
there were frequent informal meetings.
In terms of office titles, it was noted that some universities separated research and technology
transfer, whereas others combined them and that this reflected the different approaches of
universities, analogous to the different titles, for example, of chemistry departments across the
sector. The need for easy identification of commercialisation office web pages, however, was
recognised and it was suggested that the home page of university web-pages should have a
“research” button which took people to a page with university research departments and the
commercialisation office. The co-ordinated marketing of university services to industry was also
emphasised, for example combining the marketing of Continuing Professional Development
(CPD) courses with the marketing of university commercialisation opportunities. In this context,
SHEFC’s new stream of funding for knowledge transfer was highlighted, and how it could be
used to support a variety of commercial activities.
2) Encouraging commercialisation within the science base.
a) What should be the incentives for staff in terms of equity share and other
mechanisms?
Professor Donovan invited comment on this issue and referred members to the Table produced
for the Edinburgh regional workshop which compared the net royalty distribution of £100k
between UK and US universities (See Appendix B). It was noted that in the division between
academic and university, some of the university share would go to the academic’s department,
which would also benefit the academic through improved research potential.
Comments were made concerning the Cambridge approach, where the academics took
automatic ownership of their IP. Mention was also made of the approach of Toronto University,
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 3
where the IP was owned by the University, but if the academic undertook to exploit the IP, the
university would only seek a 20% equity stake. However, if the university was asked to take
forward the exploitation, then the academic would only receive a 20% equity stake.
The need to draw a distinction between royalty and equity share was highlighted. By and large,
income on royalties was received in terms of past history, and therefore past effort, whereas the
value of equity share could depend not only upon original effort, but on the continued support of
product by the inventing academic. It was commented that most venture capitalists believed that
where the inventor needed to be linked with the associated company and product, the
partnership wouldn’t work unless that person had a stake in the company.
b) How can universities best encourage and support graduate start-ups?
It was commented that efforts in this matter would face a major cultural problem in that most UK
graduates expected people to employ them, rather than to work for themselves. At Strathclyde,
it was noted that the university had been targeting students to give them a ‘tool box’ of business
skills to assist them in business. However, such courses could not give them a mind set to do it.
Strathclyde University was not, however, providing support for graduate start-ups. The
Workshop heard, however, that the London Business School (LBS) had a scheme that brought
together wealthier alumni to take graduate businesses forward, with the university acting as a
brokerage service and taking a cut. It was commented that the LBS also matched up its MBAs
with relevant technology students. In this respect it was noted that the Scottish Institute for
Enterprise had a facilitator to identify graduates with interest in commercialisation, and provide
them with the appropriate skills.
One member commented that graduates should not be encouraged to set-up a business
straight away, but work in other companies to gain experience before trying to start up their
own. It was noted, however, that where there was a high risk market failure, Scottish Enterprise
could play a role through its ‘upstarts Incubation’ programme.
c) What mechanisms are there for exploiting ideas in smaller institutions without large
commercialisation offices?
It was commented that there was a linear relationship between the volume of research and the
benchmark used to measure a university’s commercialisation success. Therefore small HEIs
needed to be exceptionally lucky to get enough financial reward to justify the financing of a
technology transfer office, unless they shared the cost of commercialisation, and it was the size
of the research base rather than the quality of the technology transfer office which was the
primary factor. Experience from the large universities was that most royalties came from 1 or 2
products.
3) Measuring success
a) What common metrics should be used to demonstrate success?
Professor Donovan invited comment on the issue of metrics and referred members to
comparative exploitation benchmark and efficiency reports produced by Edinburgh Research
and Innovation on behalf of the University Edinburgh (See Appendix C).
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 4
The Workshop members commented that the key issue was who you were demonstrating
success too, and what the objectives were of what you were trying to achieve, e.g. the
generation of money, or the effective exploitation of the science base.
It was noted that the metrics for success were important to look at the way the knowledge base
related to industrial activity, and to identify whether their trajectory was correct to produce
success in Scotland. One member commented that existing metrics did not focus on job
creation, but that a MIT study of company creation in the Boston area showed that of the large
number of companies created, only a tiny fraction were spin-outs from MIT itself. Therefore if
the objective was job creation, it would be better to focus on encouraging start-up companies to
thrive and grow, rather than spin-outs from universities. The difficulties in attributing job
numbers to specific initiatives and different institutions, however, was recognised as was the
difference between metrics of things you can measure and metrics of things you want to study.
It was similarly noted that the economic benefits from HEIs ranged from graduates to spin outs
and that encompassing all of this would be a challenge for the metrics.
The difficulties of using the same metrics for new and old institutions was discussed. It was
noted that small HEIs believed that because all metrics were retrospective, newer institutions
were never going to be able to compare favourably with more established institutions. However,
if comparisons were to be made on business plans, there would be a more even playing field.
At this point the meeting was drawn to a close. Professor Donovan expressed the hope that the
reports based on the various workshops and summary meeting would be of value to those
involved with the science base and commercialisation process. He encouraged all of those
present to publicise the reports and to use the findings wherever appropriate. He then thanked
all the participants for their contributions and the staff of the RSE for their efficient organisation.
Dr Marc Rands, Research Officer
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 5
NEXT STEPS
It is important that the commercialisation process is interactive and that the views of all
participants, especially those from industry and the science base, are taken into account as new
initiatives are developed and implemented. The Society therefore solicits comments on the
points raised in the following report and any other views on this or any of the previous seminars.
Please send these to Dr Marc Rands at the RSE.
For information on future events, please contact the Royal Society of Edinburgh, 22/26 George
Street, Edinburgh EH2 2PQ. Tel: 0131 240 5000, Fax: 0131 240 5024. Details about related
activity is also available on the Royal Society of Edinburgh web site (www.royalsoced.org.uk) or
the Technology Ventures Scotland web site (www.technologyventures.org).
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 6
ACKNOWLEDGEMENTS
The Royal Society of Edinburgh would like to thank Technology Ventures Scotland (TVS) and
the Scottish Higher Education Funding Council (SHEFC) for providing funding for the
Workshops. The Society would also like to thank:
• Dr Cathy Garner, Hugh Thomson, Margaret McGarry and Dr John Bremner for their
presentations and participation in the Glasgow Workshop.
• Mr James Houston, Mrs Lorna Sillar, Mr Kevin Bazley and Dr Michael Voice for their
presentations and participation in the Dundee Workshop.
• Ms Gillian McFadzean, Dr Robert Smailes, Mr David Caughey and Dr Gerald Buller for their
presentations and participation in the Edinburgh Workshop.
• Dr Iain Glenn, Mr Calum Davidson, Mr Alistair Goodlad and Dr Douglas McKenzie for their
presentations and participation in the Inverness Workshop.
• Inverness and Nairn enterprise and Glenaffric Ltd for the report of the Inverness Workshop,
and Fusion for their support and assistance with the Inverness Workshop
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 7
APPENDIX A
PARTICIPANTS LIST
Dr Don Barclay Technology Foresight and Advisor forThe Royal Society of
Edinburgh
Mr Andy Bishop Head, Scottish Executive, Science and Technology Unit
Professor Geoffrey Boulton FRS FRSE Vice-Principal, University of Edinburgh
Dr John Bremner Business Development Director, Link Technologies Limited
Dr Stewart Brown Head of Commercialisation, Scottish Enterprise
Mr David Caughey Development Manager, Scottish Enterprise Edinburgh and
Lothians
Professor R J Donovan, FRSE Vice-President, Royal Society of Edinburgh, Professor of
Chemistry University of Edinburgh
Mr Gordon Eadie Director, Star*Tech Ltd
Mr John Every Head of Technology and Innovation, Scottish Enterprise
Glasgow
Mr Bill Furness Chief Executive, Edinburgh Chamber of Commerce
Dr Iain Glenn Research Director, Highland Psychiatric Research Foundation
University of the Highlands and Islands Millennium Institute
Professor Andrew Hamnett Principal and Vice Chancellor, The University of Strathclyde
Mr James Houston Director, Research and Innovation Services, University of
Dundee
Mrs Heather Mantell Events Manager, Royal Society of Edinburgh
Dr David McBeth Deputy Director & IPR Manager, Research & Consultancy
Services, University of Strathclyde
Ms Gillian McFadzean Director, Technology and Research Services, Heriot-Watt
University
Dr Douglas McKenzie Managing Director, Integrin Advanced Biosystems Oban
Dr Bruce Morrison Outreach Incubator Manager, Highlands and Islands Enterprise
Mr Douglas Mundie Chief Executive, Technology Ventures Scotland Ltd
Mr Alasdair Munro Innovation and Technology Co-ordinator, Highlands and Islands
Enterprise
Dr Marc Rands Research Officer, Royal Society of Edinburgh
Dr Graham Shimmield FRSE Director, Dunstaffnage Marine Laboratory, University of the
Highlands and Islands Millennium Institute
Mrs Lorna Sillar Director, Research and Enterprise Services, University of St.
Andrews
Dr Robert Smailes Director, Research and Innovation, University of Edinburgh
Ms Eleanor Taylor Fund Manager, Proof of Concept Fund, Scottish Enterprise
Mr Michael Voice Director, Cypex Limited
Professor A Walker FRSE Professor of Modern Optics, Heriot Watt University
Ms Susan Walker Events Co-ordinator, Royal Society of Edinburgh
Mr David Wann Director of Funding and Deputy Chief Executive, SHEFC
Dr Gayle Wilson Policy Officer, Universities Scotland
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 8
APPENDIX B
Comparison of Net Royalty Distribution of £100,000 between UK and
US Universities
£80,000
Proportion to Inventor(s)
Proportion to University
£70,000
Royalty Amount
£60,000
£50,000
£40,000
£30,000
£20,000
£10,000
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Table taken from Slide 18 of Gillian McFadzean’s presentation at the Heriot-Watt University Presentation
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 9
APPENDIX C
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 10
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 11
APPENDIX D
Royal Society of Edinburgh Science
Base Research and Commercialisation
Workshop - Glasgow
A Report of a Workshop
Organised by
The Royal Society of Edinburgh
and held at the University of Glasgow on
12th March 2001
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 12
ROYAL SOCIETY OF EDINBURGH SCIENCE BASE RESEARCH AND
COMMERCIALISATION WORKSHOP - GLASGOW
The first of the SBRC workshops was held at the University of Glasgow on Monday the 12th
March 2001 with an invited audience from SBRC representatives from local universities and
research institutes, key personnel from government, local hi-tech start-ups, and local large
corporations. An attendance list is attached.
The meeting agenda was as follows:
• Chairman's Introduction, Professor Robert Donovan, FRSE, Vice-President, The Royal
Society of Edinburgh
• Presentation 'From Research to Enterprise' by Dr Cathy Garner, Director, Research and
Enterprise, The University of Glasgow
• Panel Discussion, which included (in addition to Professor Donovan and Dr Garner) Mr
Hugh Thomson, Director, Research and Consultancy Services, University of Strathclyde;
Ms Margaret McGarry, Director, City Industries, Scottish Enterprise Glasgow and Dr John
Bremner, Business Development Director , Link Technologies Ltd
Introduction by Professor Robert Donovan, FRSE, Vice-President, The Royal Society of
Edinburgh
Professor Donovan welcomed the audience to the first in the series of the Royal Society of
Edinburgh's Science Base Research and Commercialisation Seminars and noted that the series
would be travelling to a number of universities throughout Scotland, with a final summary event
to be held at the RSE later in the year. He thanked Cathy Garner and the University of Glasgow
for hosting the event and SHEFC and TVS for their financial support for the meeting. It was
noted that the aim of the Workshop was to review successes and failures and identify best
practice, although recognising, however, that this will vary with location.
'From Research to Enterprise' by Dr Cathy Garner, Director, Research and Enterprise,
The University of Glasgow
Dr Garner talked about the commercialisation approach taken within Glasgow University, which
had a predominantly research environment. There had been a dramatic change in the scale of
activity over the last 3 years with improved branding of Glasgow University and its commercial
activities within the UK and world-wide. The key factors in this change had been the
commitment from the very top of the university to put itself on the map, and to put a great deal
of support to that aim. The University committed millions of pounds to commercialisation
activities over 3 years, with additional support from Scottish Enterprise Glasgow and the
European Research Development Fund.
Having built a strong team, the Research and Enterprise office then worked proactively in
driving the commercialisation agenda within the university. Cathy noted, however, that
academics were generally interested in research rather than commercialisation, with a recent
internal survey showing only 5% to be interested in commercialisation. Academics also tended
to have a negative perception of entrepreneurs.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 13
In this context, the aims of the Research and Enterprise office are to support the university's
research and commercialisation excellence; increase research and commercialisation income
and be the best at what they do. They have also developed a performance related pay scheme
in which they are measured against their achievements of these aims. Cathy stressed that
commercialisation was about creating value - taking the intellectual property and assets within
the university and creating value from it in terms of commercial contracts, licensing and spin-out
companies.
The office did not protect every discovery, and had developed a system of prioritisation based
upon a business development approach to exploitation. This focused on the commercial value
and commercial worth of potential companies, with an emphasis on developing global
companies with high growth potential. It was commented that the Research and Enterprise
office could not afford the effort to build lifestyle companies which were not designed for growth.
A system of revenue sharing had been set up based upon 1/3 each to the academic, university
and department, but not necessarily using the academic to build companies based on their
ideas, but rather to act in the role of research or technical director.
In looking to the future, Cathy noted that in order to compete in an increasingly global
environment, there was a need to build alliances and partnerships. The University has a
successful partnership with the University of Strathclyde and developed a memorandum of
understanding with the University of California. They had also been the first European university
to set up an external commercialisation office, in San Jose.
The environment for commercialisation had also changed over the last 3 years and today, there
was a more favourable climate for commercialisation now present. Commercialisation is also
seen by Government as a means to address the development of the Scottish economy.
However, the return on commercialisation is not immediate and there are dangers that
expectations are too high. In addition, despite successful University Challenge funding and
Proof of Concept funding, general levels of early stage funding were low compared with other
countries, and there was still a need to build value into ideas before they were taken to market.
In conclusion, Cathy noted that there had been a lot of talk about commercialisation in recent
years and universities had been powered up to commercialise, but now they should be left to
get on with it.
Panel Discussion
The key points generated by the following panel discussion are summarised below:
Should universities assist in economic development?
(Hugh Thomson) This would be a new role for universities but it could distract from the main
objectives of the university e.g. to educate and do research. If universities don’t educate and do
basic research, then no one else will. He was anxious that it was again the university sector
which seemed to have to pull all the leavers and solve economic problems in the locality.
Rather, universities could only play their part, along with others in business and commerce who
must also play their parts as well.
(John Bremner) Scotland did not need more economic development agencies, rather for the
existing ones to work in partnership over common agenda items.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 14
(Margaret McGarry) The Scottish Executive is giving universities large sums of money and are
now looking for more than well qualified people and excellent research. They are looking to see
some of the research commercialised and bedded down in Scotland for the benefit of future
generations. The impact of commercialisation in Glasgow has been very substantial. In the
computing sector, in 1993 there were 200 people involved in this area in Glasgow, but now
there were 5000 people, resulting in an attractive environment for inward investment.
(Cathy Garner) Economic development is a major challenge for universities and the boundaries
between HEI commercialisation offices and Local Enterprise Companies, needs to be
established.
How do we motivate academics to commercialise more?
(Cathy Garner) Giving the intellectual property rights (IPR) to the academic had been a disaster
for commercialisation in places such as Germany. Where the University didn't want to develop
an idea, the uptake of the IPR by the academic could be an issue, however, first and foremost,
the academic was employed by the university to undertake research, rather than to develop
their own companies.
(Hugh Thomson) University ownership of IP works well and is clear-cut. However, although the
university owns the IP, the academic should still be allowed to feel a moral sense of ownership
and the trick was not to let the academic feel that they were being prised apart from it. At
Strathclyde, his role was to support academic staff commercialise more successfully, and the
commercialisation of research was very much part of an academic's remit.
(John Bremner) From the point of view of companies, the key was to keep the
commercialisation process simple, and the current system makes it clear who owns the IP.
Motivation of staff, however, was an issue and if an academic's heart was not in the project, the
commercialisation of their work would not go very well. Therefore the academic needed to see
some benefit. This need not just be in financial terms, but could be research money for their
department. In the US, however, once academics saw a few porches in their department car
park, it was amazing how many more became interested in technology transfer.
(Robert Donovan) Academic salaries were also a driver as recent chemistry graduates going
into industry could out earn young academic staff by several thousand pounds.
What is the structure for technology transfer for Scottish business? Can universities be a source
of assistance to SME's?
(Margaret McGarry) the Scottish business sector had some pockets of research excellence,
however, there was a general reluctance to work with universities. There were not many
companies in Scotland, however, who could take substantial commercialisation opportunities
from universities. There was increasing potential, however, for starting up companies from
businesses, as opposed to universities and British Telecom were looking into this possibility.
(Hugh Thomson) Technology transfer was very much broader than company formation or
licensing. Graduates were the university's main means of transferring technology, but
unfortunately 50% didn't stay in Scotland and were generating wealth elsewhere in the world. A
key issue would be to encourage more Scottish companies to employ more graduates.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 15
In addition, academic freedom meant that even if the university wanted academics to work with
SME's more, they were not going to impose on individual academic staff to say that they had to
spend so many hours a week supporting SME's. Staff had to decide for themselves, and there
was a complete cross section of interest. Some staff had no interest in doing consultancy work;
others are happy to take on board occasional projects if it links into their own research. Then
there were those who effectively ran consultancy businesses. Similarly SME needs also varied.
Some want a quick fix (e.g. help me by Friday), while others were looking for long term
development projects with funding support over 18 months at a time. It was therefore difficult to
generalise and you needed to look at the broad array of academic interests and those of SMEs
and try to match them.
(Cathy Garner) Universities have not been funded to support SME's and while some individual
academics had taken it upon themselves to do it, the University didn't see much income from
this activity and therefore didn't have much incentive to do it. The University needs their leading
5* researchers focusing first and foremost on world class research.
(John Bremner) Most high-tech companies in Scotland are SMEs, however, universities are
mainly interested in big companies. Therefore there is a mismatch of ideas and agendas. There
were advantages for academics working with SME's because things could happen quickly.
Large companies had many people inside the company who were creating technology and who
had the inside track. They also had huge numbers of people coming to them with technology, so
universities were in competition with many others for attention. However, if an academic's idea
matched what an SME needed, they would get a significant proportion of their resources and
the company would be eager to make it work.
What should the Scottish Executive do to assist commercialisation?
(Cathy Garner) Early stage funding is key.
(John Bremner) Government schemes should not require such heavy administration.
Administration costs can be such that they deter companies from applying. It is better to keep it
simple.
Is there a tension between the commercial work and the support of basic research?
(Cathy Garner) This is the value of the University's integrated office. We can see the whole
spectrum, from research to enterprise and the understanding gained of the research process
and the potential impact on the commercialisation process is hugely valuable. Some of our
European research funding submissions would rule out commercialisation possibilities in the
future, so the Research and Enterprise Office is looking very hard at future participation.
(Margaret McGarry) The excellence of the research is the key. If the research is not excellent,
the rest of the world will not be interested in what we do.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 16
PARTICIPANTS
Mr Melville Anderson Commercialisation Manager University of Glasgow
Dr Don Barclay Technology Foresight and Commercialisation Consultant, Royal
Society of Edinburgh
Dr George Bennett Chairman CompoundSemiconductor Technologies Limited
Mr Ian Bishop Business Advisor, University of Paisley
Mr Stephen Borthwick Technology Transfer Manager, Honeywell Control Systems Ltd
Dr John Bremner Business Development Director, Link Technologies Limited
Mr Charles Broadfoot Innovation University Business Advisor, Lanarkshire
Technology & Centre
Dr Janet Brown Director, Scottish Enterprise
Dr Stewart Brown Head of Commercialisation, Scottish Enterprise
Dr Terry Christmas Optoelectronics Cluster Team, Scottish Enterprise
Professor Robert Donovan FRSE Vice President Royal Society of Edinburgh, Professor of
Chemistry University of Edinburgh
Mr Mathew Farrow Head of Policy, CBI Scotland
Mr Allastair Ferguson University of Strathclyde
Dr Cathy Garner Director, Research and Enterprise, University of Glasgow
Dr Alison Graham Research and Evaluation Manager, Scottish Enterprise
Mr Billy Harkin Strategic Business Development Manager, University of
Glasgow
Mr Paul Hibbert Consultant, Optimat Ltd
Dr Tracey Houston Policy Officer, Scottish Executive Science and Technology Unit
Dr David Hughes Chief Executive, Targeting Technology Limited
Dr Robert Hunter NHS Director Research & Development, Greater Glasgow
Primary Care Trust
Mr Martin Jameson University of Glasgow
Dr Kenneth MacFarlane Senior Electronics Engineer, Logitech Ltd
Mr Alasdair Mackay Commercialisation Facilitator , The University of Strathclyde
Mrs Heather Mantell Events Manager, Royal Society of Edinburgh
Professor John Marshall Director Research and Development, Glasgow Caledonian
University
Mrs Alison McFarlane Research Grants and Contracts Manager, University of
Strathclyde
Ms Margaret McGarry Director, Scottish Enterprise Glasgow
Mr Stephen Morris Innovation and Technology Counsellor, Scottish Enterprise
Dunbartonshire
Ms Wendy Morrison Glasgow Caledonoan University
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 17
Mr Douglas Mundie Chief Executive, Technology Ventures Scotland Ltd
Dr Karen Ness Chief Executive, Institute of Photonics
Mrs Sarika Patel Innovation Liason Officer, University of Paisley
Ms Linda Polik Business Development Executive , University of Stirling
Mr Brian Rae Primary Care NHS Research Manager, Greater Glasgow Trust
Dr Marc Rands Research Officer, Royal Society of Edinburgh
Dr John Speake Chairman, The Company Growth Team Ltd
Dr Alasdair Street Commercialisation Manager, University of Glasgow
Mr Hugh Thomson Director, University of Strathclyde
Ms Jane Todd Policy Development Officer, Federation of Small Businesses
Mr Derek Waddell Deputy Director Research and Innovation, University of
Edinburgh
Ms Susan Walker Events Assistant, Royal Society of Edinburgh
Mr Simon Watkins Clerk to the Scottish Parliament Enterprise and Lifelong
Learning Committee, The Scottish Parliament
Dr Gayle Wilson Policy Officer, Universities Scotland
Mr Gerald Wilson CB FRSE Chairman, Scottish Biomedical Foundation
N.B Names in italics denote speaker/panel members
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 18
SPEAKER’S PRESENTATION
From Research to Enterprise
Dr Cathy Garner
12th March 2001
The Royal Society of Edinburgh
Why Glasgow?
• Glasgow City Approach
• University of Glasgow Approach
– Dramatic change in 3 years
– Creating a Brand
– Changing Places
• R&E
• GU
• Scotland
Key Factors
• Commitment by University
• Winning Funds
• Team Building
• Catching a Wave
• Driving the Agenda
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 19
From There to Here
• 4 separate teams • integrated team
• 22 people • 46+ people
• separate offices • one office
• reputations • reputations
• administrators • partners
• lack of influence • channels of
influence
Aims of R&E
• support the university’s research and
commercialisation excellence
• increase research and commercialisation
income
• be best at what we do
R&E: Integrated Approach
• Supporting development of research and
enterprise
• Four Teams in R&E
– Research Development
– Commercial Development
– Completion
– Marketing / Information
• Faculty approach
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 20
Many roles of the technology transfer professional
COACH COMMUNICATOR FACILITATOR
MARKETER MATCH-MAKER MEDIATOR
NEGOTIATOR POLITICIAN PROTECTOR OF ASSETS
R&E Structure
Strategy and Policy Development
Research Development Commercial Development
• Research Assessment • Licensing
Exercise • Spin Outs
• Research Opportunities • Commercial Contracts
• Project Development /
Targeted Schemes
Completion
Marketing / Information Services
Balancing University Activities
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 21
Attitudes to Commercialisation
• being a good teacher 81%
• increasing knowledge 61%
• publishing 53%
• academic reputation 36%
• applying research 25%
• working with business 19%
• making money 11%
Academic Perception of Entrepreneurs
Self Entrepreneurs
• cares about people 92% 9%
• willing to take risks 44% 91%
• work before family 29% 73%
• dynamic 44% 76%
• making money 5% 89%
• independent 85% 67%
Making it Work:
Three Frameworks in Synch
1. Regulatory, legal, financial policy
2. University/Faculty Policy
3. R&E Office
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 22
Commercialisation
• Technology disclosure
• Prioritisation
• Business case for IP protection and return
• Patent and publish - timing
• Business development approach to exploitation
• Negotiation based on commercial worth
• Revenue sharing
• Spins-outs / start-ups
Creation of Wealth and Benefits from exploitation of the
University’s knowledge base.
The Process
• Consult R&E
• Review The Opportunity
• Seek IP Protection
• Agree Commercialisation Plan
• Implement Plan - create value
• Monitor and Review
• Achieve Goals
Commercialisation and Tech Transfer at
University of Glasgow
Market Proximity Market
Sales and marketing
approval
Regulatory approval
Later stage development
Early development
Doing the deal 2
Market evaluation
Seeking industrial partner
Reduction to practice
Protect intellectual property
Monitor intellectual property
Research 1 Information and know-how exchange
Scientific entrepreneur (ongoing)
Time
Technology transfer office
Research councils
Business angels and seedcorn providers
Venture capitalists
Entrepreneurial management
SME’s
Large corporates
Established business management
Stakeholder
Involvement 1. The innovation may have arisen during the course of industrially-funded research.
2. “Doing the deal” includes company formation and fund-raising in the cases of start-ups. It includes contract negotiation and legal formalities in both licensing and spin-out situations.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 23
Outputs / Outcomes
• 1997 / 1998 • 1999 / 2000
– £72.9m – £110.0m Awards
– £48.3m – £ 60.3m Res Inc
– £0.8m – £1.1m Royalties
– 23 – 31 licences
– equity (estimates
only)
University of Glasgow
A Networked Institution
Regional Networks:
• Synergy Partnership - Strathclyde University
• System Level Integration/ALBA (4 universities)
• Scottish Institute for Enterprise (5 universities)
Global Networks:
• US offices in San Jose, New York, Washington D.C.
• Universitas 21
• The World Bank
• US Universities - University of California and others
University of Glasgow: California
• MOU with University of California
• Attracting venture capital finance
• Networking and seeking joint
ventures with multinationals
• Sales and marketing base for spin-
outs
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 24
Why Silicon Valley?
• STAR Centre: office plus virtual
package
• Venture Capital: $1bn per week
• Being there
• Stop off for Asia Pacific
• Links with U of California
Developing the Agenda:
Intellectual Property Exchange (IPEX)
• Scottish Institute initiative
• University of Glasgow leading
• Enables Universities to showcase
technology and expertise to potential
partners
• Develops high quality contacts between
TTOs and companies
• Participants retain control over process
Commercialisation - the Future
Boundary Spanners in the Networked University
• Integrated office providing one-stop approach
• Flexible, dynamic, fast moving processes
• Diversity of skills (bridge between academia,
government and business)
• Strategic networks (regional, national,
international)
providing mechanisms through which
resources are mobilised to the development
process
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 25
Commercialisation - Challenges
• early stage funding
• building value
• market intelligence
• scale
• delivering the goods
• political pressures
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 26
APPENDIX E
Royal Society of Edinburgh Science
Base Research and Commercialisation
Workshop - Dundee
A Report of a Workshop
Organised by
The Royal Society of Edinburgh
and held at the University of Dundee on
15th May 2001
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 27
Royal Society of Edinburgh Science Base Research and
Commercialisation Workshop - Dundee
The second of the SBRC workshops was held at the University of Dundee on Tuesday the 15th
May 2001 with an invited audience from SBRC representatives from local universities and
research institutes, key personnel from government, local hi-tech start-ups, and local large
corporations. An attendance list is attached.
The meeting agenda was as follows:
• Chairman's Introduction, Professor Robert Donovan, FRSE, Vice-President, The Royal
Society of Edinburgh
• Presentation 'Commercialisation of Intellectual Assets at the University of Dundee' by Mr
James Houston, Director, Research and Innovation Services, University of Dundee
• Panel Discussion, which included (in addition to Professor Donovan and Mr Houston) Mrs
Lorna Siller, Director, Research and Enterprise Services, University of St. Andrews; Mr
Kevin Bazley, Development Manager, Biotechnology and Healthcare, Scottish Enterprise
Tayside and Mr Michael Voice, Director, Cypex Limited, Dundee
Introduction by Professor Robert Donovan, FRSE, Vice-President, The Royal Society of
Edinburgh
Professor Donovan welcomed the audience to the first in the series of the Royal Society of
Edinburgh's Science Base Research and Commercialisation Seminars and noted that the series
would be travelling to a number of universities throughout Scotland, with a final summary event
to be held at the RSE later in the year. He thanked SHEFC and TVS for their financial support
for the meeting and Mr Houston and the University of Dundee for hosting the event.
Professor Donovan noted that the aim of the Workshop was to take a hard look at
commercialisation, particularly in the Dundee area, looking at the successes and the failures
and try to learn from these by identifying best practice. He commented that there had been
tremendous strides taken in Scottish commercialisation but there were still many things that
could be learn from performance.
'Commercialisation of Intellectual Assets at the University of Dundee' by Mr James
Houston, Director, Research and Innovation Services, University of Dundee
Mr Houston began his talk by outlining the general drivers for commercialisation in universities.
These included Central Government, through its “Knowledge-Based Economy”, facilitated by
initiatives such as the University Challenge Fund, the Science Enterprise Challenge (resulting in
the creation of the Centre for Enterprise Management, in Dundee) and the SHEFC
Professionalisation of Commercialisation. Commercialisation was also being promoted by
research sponsors, for example, Research Councils were seeking both to maximise
publications and maximise commercial return. Other drivers included academic aspirations,
University imperatives (in providing a source of unfettered income) and regional development.
The commercialisation process was, however, affected by a number of factors including the
institutional culture (whether it considered itself an ivory tower, or had a historical interface with
local industry); the Research Assessment Exercise and the potential conflicts between curiosity
driven and industry driven research, and publication versus confidentiality and
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 28
commercialisation. Teaching load was also highlighted as possible factor as well as conflicts of
interest between activities legitimately spinning out into a company as opposed to staying within
the university as university business.
Nevertheless, the key factor was institutional policies and resources. The Workshop heard that
there needed to be responsive guidelines encouraging commercialisation and benefits in a
university venture investment fund. There should also be formal and transparent revenue
sharing arrangements with respect to royalties, and for equity in spin-out and start-up
companies. In addition, there should be an overhead provision with a trickle-down of funding to
departments and a well resourced and supported commercialisation office.
At the University of Dundee, Mr Houston described the role of the Research and Innovation
Services (RIS) as: (1) assisting staff in applying for research funding from research councils,
charities and industry, to help staff put together fundable robust research proposals; and (2) to
protect and commercialise intellectual property rights. It was noted that historically, the Office
had been extremely successful at the first part of this role, resulting in a research turnover of
£40 m last year (75% from the life sciences), split roughly equally between charities, Research
Councils and collaborative research.
In the second role, the RIS had to ensure that the research contracts agreed were appropriate
in terms of either publications or commercial outputs. The Workshop heard that the UK Patents
Act of 1977 provided for the employer to own the right to apply for a patent where the invention
was make in the course of either an employee’s normal duties or duties specifically assigned to
an employee. There did, however, need to be a clear and unambiguous policy of payback to
inventors (academic and others). At Dundee University, the share for inventors was 50% of net
income, up to £0.5 M, and thereafter dropping to 30%.
The routes to the commercialisation of Intellectual Property (IP) identified by the RIS included
the use of the IP to attract further R&D funding (e.g. industrial), which broadened the research
base and attracted overhead income. Licensing was also a favoured route, either direct to an
established company, or indirectly through a technology transfer agency (e.g. BTG). Spin-out
companies were also used, and were considered another form of licensing, with the University
choosing to licence its IP to a spin-out activity in return for equity share. Consultancy was seen
as a further potential commercialisation route, but was not within the remit of RIS. Mr Houston
emphasised, however, that commercial considerations needed to be balanced by the
recognition of researcher's desire for academic kudos, and that 95% of university research was
likely to be fundamental research, with only a small fraction being relevant to industry.
Benefits of licensing to an established company were outlined. These included passing on the
risk and liability and offering no indemnity; allowing potential access to other people's
technology/resources; making the most of others’ expertise and providing early royalty income
to the University and the inventors. Mr Houston noted that the University was encouraged to
licence locally, however, 75% of the Universities portfolio was in biotechnology - which made it
difficult to find a local licensee without creating more spin-out companies and a cluster.
Biotechnology was an international business and the University had to licence internationally if
necessary.
In terms of spin-out companies, the university encouraged academics to consider spinning-out
their ideas. In doing so, however, the RIS looked for a tenacious inventor/entrepreneur as the
basic requirement, and for the University to get an appropriate equity stake in the company and
membership of the Board. In identifying the appropriate stake, the position of RIS was that in
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 29
the beginning the company was without value and that the University IP represented the initial
value at the start. Once the equity share had be established, the University would work with the
researcher to provide supportive advice on preparation of business plans, grant aid, sources of
venture capital. Mr Houston, noted, however, that the University had not created enough spin-
out companies.
In conclusion, Mr Houston recommended the establishment of a Business Investment Group
within the University of Dundee to facilitate RIS's activity in spin-out activity, provide investment
and in-kind support and to provide an institutional buy-in of the university's commercialisation
activities in general, fostering an entrepreneurial culture throughout the University community.
Panel Discussion
The key points generated by the following panel discussion are summarised below:
What should be the expectations from universities and industrial partners in commercialising
university research?
(Audience) Personal experience with a Scottish university from an industry point of view has
been that the university has shown excessive greed in negotiating agreements and unrealistic
expectations of the timescale for product launches and royalty returns.
(Lorna Siller) Both sides need realistic expectations and any agreement that was sustainable
needed to be reviewable. If a university strung-up the companies who were to exploit the
technology then no one would come out a winner.
How is 'know how' commercialised?
(Lorna Siller) 'Know how' was a difficult issue when it came to licensing and the scope of any
agreement (for example in terms of bilateral confidentiality) needed to be carefully defined.
Although the RIS did not deal with consultancy, St. Andrews University's Research and
Enterprise Serviced did, and 'know-how' issues often arose in such circumstances, as terms of
agreement were often vague and could, therefore, be exploited.
How should universities approach IPR when 'spinning out' companies?
(Audience) The University of Cambridge could be said to successful in spinning out companies
be because the university does not want to own the IP. Therefore, researchers thinking about
starting up a company don't fear that the University will take too great a share. Universities in
Scotland should, therefore, be careful not to over exploit their IP.
(James Houston) The University had a large portfolio of IP and would not expect to generate
large incomes, over the first 5-8 years, from new and emerging spin-out companies. Overall, the
University would seek to make its returns out of a balanced portfolio including big licensing
deals, with the spin out activity being an adjunct to that.
(Lorna Siller) Start-up companies were often vulnerable in the beginning and, therefore, it might
be more appropriate to assign the IP to that company once they were secure and stable and
able to maintain that IP.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 30
(James Houston) Cambridge was not only successful because of its IP policy, but because of
the amount of funding available around it. We need to get those funds to Scotland.
(Audience) In terms of return to the inventor, how can equity share in spin-out companies be
decided before an indication of long term commercial return of the technology (e.g. in terms of
the University of Dundee's approach to negotiation from the position that in the beginning the
company was without value and that the University IP represented the initial value of the
company at the start.)?
(James Houston) There was a need to talk about money before there was actual money
available because at that point people could become greedy. The university guidelines on its
equity stake in start-up companies, in return for the transfer of IP, was a minimum 20% stake for
an unfunded company.
(Michael Voice) It was wrong to say that an unfunded company was worthless, as it was the
people in the company that would be looking for the funding and willing to take the risk. The
company, therefore, has a value as a vehicle for exploiting that technology. When the company
does secure funding, it is valued upon its potential income rather than on the funding received.
The university should, therefore, look to what the company is going to be worth when is has
successfully exploited the technology.
(James Houston): When talking about value, there is a need to talk about monetary value. If the
company has no finances to develop the technology, then it could be said that 100% of the
value of the company was the Universities IP. Therefore, rather than take 100% equity stake,
the University only takes a 20% stake if it is to make the IP available to somebody else to fund
the commercialisation of it.
(Audience) Start-up companies depended upon individuals. Five years after Cyclacell started a
lot of what was done was still people getting access to inventor's know-how and knowledge.
Even in deals with big pharmaceutical companies, they were still buying, in some sense,
consultancy services. The inventor's willingness to engage in the enterprise, therefore, was the
key part of the start-up process and if the University used a model where that was not
recognised, it would cause the commercialisation process to fail. The University's use of a
simple arbitrary equity assignment raised the danger of the individual leaving to take the idea
elsewhere. It could then be extremely difficult for the University to retain some rights.
How can IP be developed to a stage ready for commercialisation?
(James Houston) A range of funds were available for this purpose, for example the Scottish
Enterprise Proof of Concept fund. In addition, the University of Dundee had been successful in
receiving a Patent Fund from the ERDF, Scottish Enterprise Tayside and the University of
Dundee, to allow the university to take a longer view on the potential of IP and allow sufficient
time for development.
Is there a clash between academic and commercialisation interests?
(Audience) The academic attitude towards commercialisation was becoming more positive at
the University of Dundee. One of the potential hurdles was the myth of mutual exclusivity
between publication and patenting. Personal experience had found that if issues like time to
publication and so on were negotiated well, it was possible to scale activities such that
limitations on publication were minimal.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 31
(James Houston) Publication and commercialisation were not mutually exclusive, except in
situations were there was a 'know how' element, which needed to be patented first, or
subsequent commercialisation would be prevented.
(Kevin Bazely) There had been a significant culture shift in the University of Dundee and
Scottish Enterprise Tayside was now regularly approached by academics wanting to start up
new companies. However, there was still more that could be done. A university in Sweden
recently bought some IP from a Scottish company in order to put together a bigger portfolio for
commercialising its own IP. That overt approach to university commercialisation had not been
reached in Scotland yet, but he hoped it would do in due course.
What are the best commercialisation routes for Universities?
(Audience) Licensing through the milestone and royalty route could often restrict the university
to one company for many years down the line. A multiple sales, non-exclusive, arrangement,
however, could often generate more income.
(Michael Voice) From an SME point of view, exclusivity was seen to be the most important part
of the licence. As the company was exploiting new technology, the only way it was commercially
attractive was if they were the only ones producing their products. It was noted that Cypex
Limited would not have got funding to start the company if their licence had not been exclusive.
(Audience) If IP were licensed to a company by the university, the resulting income would be
linked to the success of that IP. However, if the university had an equity stake in that company,
it would not necessarily be linked to the University's own IP. Three or four years after it had
started up, the value of a company was probably little to do with the original IP upon which it
was based. It would most likely have developed its own IP and licensed IP from elsewhere, and
the University could, therefore, end up with a share of something much bigger than their original
IP might have suggested.
(James Houston) But equally a much smaller stake in that company.
(Audience) We make biological reagents in our laboratories and have made £800k this year
from selling reagents to companies. This could be done on a much wider scale. It doesn't rely
on IP, but producing large quantities of reagents which people want. It had resulted in benefits
for the lab as well as being profitable, in being able to have bulk reagents on had, rather than
having to continually make small volumes up. In addition, because of the success of our
commercial relationships with a company in New York, they had set up their European
headquarters in Dundee. Their rational was, if 11% of their product and 23% of their sales came
from one laboratory at the University of Dundee, if they were actually in Dundee, they be able to
generate more business. Most laboratories, however, are using reagents which are not made
in-house, (e.g. for DNA clones) under some material transfer agreement and, therefore, don't
own them. In order to commercialise their products they would have to re-clone their own c-
DNAs.
(Keven Bazley) Scottish Enterprise Tayside had looked into this kind of project and the setting
up of a reagents company, but at the time there wasn’t sufficient critical mass. We will be
looking at it again
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 32
Could there be greater potential for the development of the University's IP in Dundee?
(Audience) Because of the Universities focus on biotechnology, there will no doubt be an
emphasis on contacts with the large scale companies, charities and major sponsors, who may
not be interested in all ideas which have potential. However, with the right contacts in the local
business community, such ideas could be brought forward and commercialised locally.
(James Houston) Given the flavour of the University's portfolio, our contacts do tend to be with
international companies. I was aware of a group of individuals within Dundee who are interested
in forming a venture fund, but my own view has been that fund needed to be on a larger scale,
and the University would tend to look beyond Dundee to obtain larger sums of money. But I,
nevertheless, welcome the initiative.
What position should the university take on defending patent infringements?
(James Houston) Universities are strong on talk, but when the going gets tough, most will back
away from lengthy legal battles.
(Robert Donovan) Perhaps Scottish Enterprise could assist.
(Audience) Some companies worth over a billion do not pursue patents as a matter of course,
as a result of infringements, because they can't afford to. This is particularly the case in the US.
(James Houston) It was difficult when there was not a licensee and the university was the sole
patent holder. If there was a licensee, however, the University would insist that they picked up
all of the costs associated with patent infringement.
Dr Marc Rands, Research Officer
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 33
PARTICIPANTS
Mr Kevin Bazley Development Manager, Scottish Enterprise Taysid
Mr I.N Beattie Business Development Manager, Tayside Optical Technology
Limited
Mr John Brownley Business Development Manager, NICC Ltd
Professor Brian Burchell FRSE Professor of Medical Biochemsitry, University of Dundee
Professor J A Cairns, FRSE Professor of Microelectronics & Material Science, University of
Dundee
Mr Ivan Carnegie Business Lawyer, Thorntons WS
Professor Sir Philip Cohen FRSE Royal Society Research Professor and Director, University of
Dundee
Professor D Cole-Hamilton FRSE Professor of Chemistry, University of St Andrews
Mr Paul Daly Partner, Henderson Loggie
Professor R J Donovan, FRSE Vice-President, Royal Society of Edinburgh Professor of
Chemistry, University of Edinburg
Professor C P Downes, FRSE Head of School of Life Sciences, University of Dundee
Dr William Duncan Executive Secretary, The Royal Society of Edinburgh
Mrs Julia Edgar Director, Pleiad Ltd
Dr Robert Ford Intellectual Property Rights Manager, University of Dund
Professor W.A Gillespie Director of EPI Centre, University of Abertay Dundee
Professor Malcolm Horner Professor of Engineering Management, University of Dundee
Mr James Houston Director, Research & Innovation Services, University of Dundee
Mr Alex Knebel Postdoctoral Research Assistant, University of Dundee
Professor Birgitte Lane FRSE Cox Professor of Anatomy and Cell Biology, University of
Dundee
Professor D P Lane, FRS, FRSE Professor of Molecular Oncology, University of Dundee
Ms Laura Macdonald Research and Innovation Services, University of Dundee
Mr Ian McFarlane Business Advisor, University of Stirling
Mr Douglas Mundie Chief Executive, Technology Ventures Scotland Ltd
Dr Marc Rands Research Officer, The Royal Society of Edinburgh
Dr Ian W Ricketts Chair of Assistive Systems and Healthcare Computing
University of Dundee
Mr George Shand Quality Manager, Farmor Engineering Co.Ltd
Ms L M Sillar Director of Research & Enterprise Services, University of St
Andrews
Mr Alan Slade Lecturer, University of Dundee
Ms Diane Taylor Deputy Director, University of Dundee
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 34
Mr Michael Voice Director, Cypex Ltd
Ms Susan Walker Events Co-ordinator, Royal Society of Edinburgh
Dr Gayle Wilson Policy Officer, Universities Scotland
Mr George Zajicek Business Development Director, Axis Shield
N.B Names in italics denote speaker/panel members
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 35
APPENDIX F
Royal Society of Edinburgh Science
Base Research and Commercialisation
Workshop - Edinburgh
A Report of a Workshop
Organised by
The Royal Society of Edinburgh
and held at the Heriot - Watt University on
15th June 2001
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 36
Royal Society of Edinburgh Science Base Research and
Commercialisation Workshop - Edinburgh
The third of the SBRC workshops was held at Heriot - Watt University Friday the 15th June
2001 with an invited audience from SBRC representatives from local universities and research
institutes, key personnel from government, local hi-tech start-ups, and local corporations. An
attendance list is attached.
The meeting agenda was as follows:
• Chairman's Introduction, Professor Robert Donovan, FRSE, Vice-President, The Royal
Society of Edinburgh
• Presentation ‘Ideas, - IP Development, Exploitation & Applications’ by Ms Gillian
McFadzean, Director, Technology and Research Services, Heriot - Watt University
• Panel Discussion, which included (in addition to Professor Donovan and Gillian
McFadzean) Dr Robert Smailes, Director, Research and Innovation, University of
Edinburgh, Mr David Caughey, Development Manager, Scottish Enterprise Edinburgh and
Lothians and Dr Gerald Buller, Director, Terrahertz.
Introduction by Professor Robert Donovan, FRSE, Vice-President, The Royal Society of
Edinburgh
Professor Donovan welcomed the audience to the third in the series of the Royal Society of
Edinburgh's Science Base Research and Commercialisation Seminars and noted that a fourth
th
workshop would also be held in Inverness on the 28 June, with a final summary event to be
held at the RSE in August. He thanked SHEFC and TVS for their financial support for the
meeting and Gillian McFadzean and Heriot Watt University for hosting the event.
Professor Donovan emphasised that the aim of the Workshop was to take a hard look at
commercialisation, particularly in the Edinburgh area, looking at the successes and the failures
and try to learn from these by identifying best practice. He commented that it was particularly
appropriate to be at Heriot - Watt University where the Royal Society of Edinburgh
Commercialisation and Foresight programme was first launched some years previously by Dr
T.L Johnston FRSE, the then President of the RSE and a former Principal of the University.
Furthermore, Heriot –Watt University was the first University in Europe to establish a research
park and a brief history of developments since 1969 can be found in the appendix.
‘Ideas – IP Development, Exploitation, & Applications’ by Ms Gillian McFadzean,
Director, Technology and Research Services Heriot - Watt University
Ms McFadzean began her talk by noting that Heriot - Watt University had a thriving spin out and
entrepeneurship culture through programmes such as STRIDE, but that the process that took
them through spin-out was sporadic and diverse, with company growth suffering as a result.
However, Heriot Watt had excelled at working with industry (e.g. 12% of their research funding
came from business) and it was now trying to adopt some of Industry’s work practices to create
a professional service that would give spin - out companies the best possible start.
Commercialisation at Technology and Research Services (TRS) was defined by fast,
transparent, inclusive, supportive and clearly understood processes. TRS believed that a fast
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 37
evaluation process was vital, achieved through the flexibility of the 3 decision making strands;
the Innovation Exploitation Board (IEB), The TRS Board of Management and Senior
management, which met monthly/weekly or whenever was necessary. There was also a
transparent decision making process that provided academics with feedback. One important
development was the ‘Star Chamber’. An evening where venture capitalists and established
entrepreneurs were able to provide feedback on how proposed projects would fare in the
market. Preventing delays was vital for the development of an idea and, therefore, a virtual
company was set up with a team to get the idea up and running. This team would then take
care of the financial and legal contracting, form familiarisation, examine strategic funding, set up
venture capital introductions, set up structures, work out the role of the University and look at
growth and exit routes. All team members were also given directors training to define what their
role and duties would be. It was noted that good management was very difficult to get into start
up businesses, and that TRS had developed a strategic partnership with the Forward
Group(FG) to offer help with early stage funding and to provide management expertise to a
company as it grew, in return for a first refusal option on new ideas.
Ms McFadzean highlighted that it was vital to get patent costs concessions from Government,
as universities could not afford to run huge patent portfolios. She also noted that spin out was
not the only route and that TRS tried to arrive at the best solution for the individual. To balance
expectations between academics, business, investment sectors and the universities, TRS
established clear guidelines to promote trust. For example to prevent conflicts of interest there
was a clearly defined set of guidelines under development and instead of a service level
agreement there was a code of practice.
Rewards were intended to be as fair as possible. TRS took less than a 24% equity share and
negotiated the rest with the academic and venture capitalist. Each case was negotiated on an
individual basis with levels of equity differing according to circumstance. TRS would examine
the level of commitment and involvement of staff and ask them to ask for a realistic amount of
equity, based on their effort and how closely associated they would be with the company. Staff
were rewarded for IP to encourage them to stay and thereby create more IP for the University.
TRS had developed 15 new companies in the last 2.5 years and there was a growing and
developing base for consultancy and CPD income. Heriot - Watt did not, however, measure
success through equity since. For example, current figures for equity developed over the last 2
years may be in the region of £3 million. However, the bottom could fall out of that market
tomorrow diminishing the value of that equity, so equity valuations were not valid indicators.
It was noted that TRS tried to deal with the wider commercialisation process. For example, TRS
was working closely with industry to change some of the negative perceptions they held about
university commercialisation. While TRS did not see its role as an economic development
agency, it nevertheless had a very good relationship with SME’s, providing a steady income
through consultancy and short courses. In addition, in order that TRS did not jeopardise these
successful links, it would not turn away any reasonable SME request. But it was not a perfect
process and there was a long way to go to get it right
Ms McFadzean also described how the development of TRS into one integrated single site had
paid dividends with improved communication and with all staff aware of the progress of any
project at any stage of its development. Consultancy, short course, distance and open learning
business development provision and the Scottish Institute for Enterprise (SIE), were all on one
site effectively providing a one - stop - shop. The IP portfolio had also been consolidated under
one person so that it could be utilised effectively and used to trade assets now that TRS was
aware of what those assets were.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 38
Ms McFadzean also described how The SIE at Heriot - Watt had been very successful at
bringing forward ideas and identifying commercial ideas from the students and raised student
awareness of entrepeneurship and commercialisation. TRS currently provided support to
students with commercial ideas (not just technology ideas) and every idea so far had been a
good commercial idea. It was noted that in many ways students were more ‘hard-nosed’ about
what ideas to bring forward than academic staff. A further development had been an Internship
scheme whereby Edinburgh City Council had given Heriot - Watt funding to bring in interns, for
example, students and junior contract researchers who may be between contracts were brought
to work at TRS with the expectation that when they had an idea to develop, they were aware of
what was involved and were, therefore, more prepared. Finally, Ms McFadzean noted that the
primary focus at TRS was the maintenance and health of its research base, because without it,
the university wouldn’t be able to commercialise anything.
Panel Discussion
The key points generated by the following panel discussion are summarised below:
Q. What is the University’s role after a company has been spun out and has become
independent from the University?
(Gillian McFadzean) Flexibility was the key, as it would vary depending on the company. In
some companies Heriot - Watt would have an active role and have board members, but with
other companies it would just have observer status.
(Bob Smailes) Like the US, the operative word in spin - out was ‘out’. We would help launch
company, and do the packaging as far as we could but it was questionable whether universities
would have that much to add to the board of a company that was going ahead. A lot of venture
capitalists were uncomfortable about university members on board members as they believed
they would just look after the university's interest. It would also result in a conflict of interest that
would be especially difficult if the company came into a disagreement with the university.
Recommended alternatives, to avoid a conflict of interest and ensure that the University was still
involved with the company, would be to have a Scientific Advisory Board to act as scientific
advisors or through consultancy, which could be probono, or for a payment. The University of
Edinburgh also had directors of companies such as Quintiles on its board so there was
interaction the other way round.
It was noted that the University of Edinburgh had a company generation strategy that it fixed
the University’s equity position once the company got to a certain market capitalisation. Any
relationships between the company and the university with regards to access to facilities should
also be done on an arms length basis otherwise there was a hidden subsidy from the public
sector to that the company, which was unfair on the company as eventually it had to survive
unaided.
(Gerald Buller) It was also important that there was some sort of independent evaluation about
any access to facilities agreement and the University as a shareholder should not be involved.
Investors valued the connection with universities, but the way to maintain the connection was
difficult.
(David Caughey) There is a need to analyse the relationship between the two in terms of how
the deal progressed and how the partners arrived at an equitable solution, and provide
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 39
feedback to learn from past experience. While it is important to have procedures in place,
ultimately it will be the flexibility of these procedures, which is important as no two technology
transfer situations are the same.
Q. How do SME’s approach universities?
(Gillian McFadzean) It is sporadic and variable in the amount of thought that has gone into the
problem/question before it is posed to the university. The questions that come forward from
SME’s are incredibly variable and some of them are very sophisticated. Each SME has a
different problem but they are reluctant to work together to share problems so we have to see
them all independently. The STRIDE programme was also very helpful in selecting SMEs and
let SME’s know that the university could be approached.
(Bob Smailes) The primary method of interaction with SME’s at Edinburgh University is through
consultancy and the Consultancy Bureau CPD. Most SME’s time frames are too short to invest
in substantial research programmes, unless they are high tech companies. Then there may be
an arrangement, particularly if you can engineer a substantial government subsidy through the
LINK programme. Whist it is too time consuming & costly to speak to every SME, Edinburgh
University has one person whose job it is to go and contact as many companies as possible,
mainly through the Consultancy Bureau. It is also hoped that Scottish Enterprise will direct
SME’s to us as well, and we have set up marketing activities such as Edinburgh Biolines, jointly
with other research bodies in the area, to try and increase publicity of what is going on. The new
SHEFC initiative, Scottish Research Information System, is also intended to increase
awareness of the University activities to the outside world. However, while we have to try and
improve the mechanism to get SME’s to come to the university, we will never make any real
money in terms of research income, technology transfer or licensing primarily from the SME
sector. Most research is funded, in an industrial sense, from the major companies.
Q. Is there any benefit in having strategic alliances between universities like at Strathclyde and
Glasgow?
(Gillian McFadzean) Collaboration has always occurred at the level of individuals & research
groups but at institutional level there is work to be done. However, the Scottish Institute for
Enterprise may become a good example of where collaboration can be effective. This is starting
to happen more through the Scottish Research Information System and the Scottish Institute for
Enterprise. We are, for example, looking at the development of a shop front for marketing
technology that is available at the present time within a collaboration of 5 universities. So there
are moves in this direction, but it is a sensitive area.
Q. How would you value a company with ‘platform technology’ with the technology to develop
many products?
(Gillian McFadzean) We would need to look very carefully at licensing but that would be the first
option we looked at. However, each situation would be looked at on its own merits.
(Bob Smailes) It is impossible to value a spin - out company at the outset. The majority in the
US just take a percentage of the equity when the market capitalisation of their company has
attained a value. If it is sold for a sum, then get a percentage at that stage. Before that stage it
is worthless. When evaluating ideas that you are patenting, and looking at the exploitation route,
you need to question whether you are licensing or creating a spin out company. One-reason
spin-outs fail is the difficulty for a single product company to get investment (unless it takes a
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 40
relatively short time to market). Therefore, platform technology may make it more favourable to
create a company, but it is also possible to license part of the potential and create a company
out of the other potential uses.
(Gerald Buller) In Hi- tech investment at the moment, the urge is to focus. If you were creating a
spin-out, it would be best to focus on one product or two related ones. The valuation of the
company is whatever someone is prepared to pay and there is no rulebook.
(David Caughey) It is dangerous for a company trying to develop itself and get access to the
venture capital market by creating one product line/application. There needs to be access to
product flowthrough which often happens with a platform technology base. Venture capital
valuations are based on a number of factors. For example, the individuals that go with the
company and when the investors can get a return on their investment with a profit.
Q. Should the European schemes such as Kraft which involve dealing with partners in
European companies, make arranging IP agreements more difficult?
(Bob Smailes) It is essential to have a consortium agreement with any European programme,
and harmonised contracts should prevent problems. In a harmonised contract, IP is owned by
the originator, and the other parties to the group have a right to access the IP on a royalty free
basis unless the IP has been created by a hospital/research institute, in which case industrial
partners in consortium get IP released on a royalty bearing basis
The problem, however, is with Kraft, not the IP. It is impossible, from a management point of
view, to get SME's to work together, and difficult to run a consortium of over 5, with a wide
geographical mix. SME’s are supposed to manage it, but in reality the local institution acts as
shadow manager, or it is contracted out to be the full time project manager.
Q. Americans favour licensing over the assignation of IP to the company. Why are we fixated
with assignation?
(Audience) Venture capitalists believe that if a company fails then at least they have the IP,
which they can sell. Many business angels, therefore, insist IP is invested in the company.
(Gillian McFadzean) Heriot - Watt has 2/3 of its deals where the IP is licensed and if the
company fails the IP will return to the University, but this is very unusual. However, there is no
rationale why we don’t license more, other than that the VC’s tend to insist on the IP being
assigned.
(Gerald Buller) The problem with licensing and assignation of royalties is that few biotechnology
spin-outs will ever make a product to get royalties from. They take the technology, grow it to a
point and then look for a buyer.
(Bob Smailes) From a university perspective, we have to protect our interest over what happens
if/when a company fails, as this will involve lengthy legal discussions. From a company point of
view there is no difference between license and assignation of IP as the license also gives
surety to company that they have the technology
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 41
Q. Are many undergraduate companies being set up?
(Bob Smailes) Edinburgh University is successful in this area due to the SIDE, programme
involving Glasgow, Dundee, Heriot Watt and Strathclyde. Universities don’t benefit directly from
this as there is no IP/equity/royalty deals possible, as it is not a University product. Start-ups will
have a greater economic impact than spin-outs, however, universities are not funded to be
economic development agencies which is Scottish Enterprise’s function. In addition SHEFC
money should not fund economic development activities, but should fund the research base.
But, students should be helped and given appropriate advice, and get Scottish Enterprise
funding for this task.
(Gillian McFadzean) A lot of students are coming in and we are grateful for the SIE support that
allows us bring forward their company ideas. But the University is not really funded to support
that activity. Therefore, we should support students as far as possible and then pass them onto
the SE network
(David Caughey) The student base is largely an untapped resource. We should capitalise on
the close relationship between the university and the student and work in partnership with
institutions providing advice, support and finance. Students should be streamlined and fast
tracked to existing start up programmes. It will be important to simplify information channels and
co-operate with either one point of contact or a closely-knit network.
Q. Can consultancy act as sieve for IP to leave a university?
(Bob Smailes) The Consultancy contract at Edinburgh states that there is no transfer of
university IP into a company.
Ms Susan Walker M.A, The Royal Society of Edinburgh
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 42
PARTICIPANTS
Ms Catherine Alexander Chief Executive, Rosyth Europark Business Innovation Centre
Professor G S Boulton, FRSE Vice Principal, University of Edinburgh
Mr Stewart Brown Public Relations Officer, The Royal Society of Edinburgh
Dr Gerald Buller Director, Terrahertz
Mr John Butler Project Manager, Division of Infomatics, University of Edinburgh
Sir David Carter FRSE Vice-Principal, The University of Edinburgh
Mr David Caughey Development Manager, Scottish Enterprise Edinburgh and
Lothians
Dr Dr W Donachie Deputy Director, Moredun Research Institute
Professor R J Donovan, FRSE Vice-President, Royal Society of Edinburgh, Professor of
Chemistry, University of Edinburgh
Dr William Duncan Executive Secretary, The Royal Society of Edinburgh
Dr Davor Fatori Development Manager, Diagnostics Scotland Ltd
Dr Alastair Fleming Solicitor, MacRoberts
Ms Monica Flynn Research Commercialisation Manager, SAC
Professor Denis Hall FRSE Assistant Principal (Research), Heriot-Watt University
Mr Richard Hancock Head of Research Funding and Policy, SHEFC
Mr John Harrison Director, Surfactant Solutions Ltd
Mr Ray Harrison Managing Director, Edinburgh Biomedical
Dr Peter Hicks Snr Director Biotechnology & Emerging Co Accounts , Quintiles
Ltd
Ms Lucy Hunter Head of Division (Higher Education, Science and Student
Support), Scottish Executive
Professor William Keogh Enterprise Co-ordinator, Heriot -Watt University
Mrs Ray MacFarlane Senior Director, Bank of Scotland
Ms Gillian McFadzean Director, Technology and Research Services, Heriot - Watt
University
Professor J A McGeough FRSE Regius Professor of Engineering, University of Edinburgh
Ms Diane McGill Innovation Manager, Queen Margaret University College
Ms Aimee McGlaughlin Heriot - Watt University
Mr Brendan McGuckin Commercialisation Manager, Napier University
Mr John McKinlay Associate, McGrigor Donald
Mr Michael McPartlin Funding andPolicy Officer, SHEFC
Mr Jeffrey Meek Managing Partner, The McCabe Partnership
Dr Rob Mollan IP Manager, SAC
Mr Douglas Mundie Chief Executive, Technology Ventures Scotland Ltd
Ms Rowan Norrie Product Development Manager, Ethicon Ltd
Dr Kevin O'Donnell Head of Potato & Plant Health Division, Scottish Agricultural
Science Agency
Dr Kevin Parker Director, KKI Associates
Mr Archie Paterson Senior Manager, Commercial Banking, Royal Bank of Scotland
Ms Linda Polik Business Development Executive , University of Stirling
Ms Jane Queenan Commercialisation Facilitator, SIE, Heriot - Watt University
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 43
Dr Robert Smailes Director, Research and Innovation, Univeristy of Edinburgh
Ms Susan Walker Events Co-ordinator, The Royal Society of Edinburgh
Mr David Wells Managing Director, Computer Application Services
Ms Antonia White Technology Diversification Manager, REBIC
Dr Gayle Wilson Policy Officer, Universities Scotland
N.B Names in italics denotes speaker/panelmembers
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 44
SPEAKER’S PRESENTATION
Ideas - IP Development,
Exploitation and Applications
Gillian McFadzean
Director, Technology & Research Services
Royal Society of Edinburgh 1
Is Heriot-Watt any different?
• research-based technological university
• second largest provider of non-medical Science and
Technology subjects in Scotland
• focused on strategic and applied research and technology
transfer
• focused on maintaining and increasing extensive industrial
partnerships
• emphasis on vocationally based, industry linked courses
• commitment to flexible study routes and life-long learning
• commitment to innovative, open and technology-based learning
Royal Society of Edinburgh 2
Possible Differences?
• positive attitude to creating companies
• history of strong links with industry
• proportion of industrially funded research
• fewer tensions between teaching, research, company
creation
• challenges
– develop the process
– different types of commercialisation
– to match academic and university expectations
– perceptions
Royal Society of Edinburgh 3
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 45
Technology & Research Services
An integrated unit to support the
• delivery of world-class innovative research that
meets the needs of business & industry
• transfer of knowledge
• commercial realisation of ideas
• generation of income for the University and for the
academic community
• growth of the local and national economies
Royal Society of Edinburgh 4
TRS Functions
Service • RGA - Funding Council, EU etc
• industry sponsored research
Functions
• consulting contracting
• material transfer agreements
• copyrights
• trademarks
• invention disclosure
• patent application
• patent prosecution
• confidential disclosure agreements
Enterprise • licensing/options
Functions • business creation
Royal Society of Edinburgh 5
Knowledge Transfer- why bother?
Expectation Clarity
1 We should, as a technological, research-led University, have a portfolio of
knowledge assets to trade with the external world
• Why should we bother with this? The main rationale for KT is:
• for public use and benefit
• to reward, retain and recruit staff
• to induce closer ties to industry
• to generate income and promote economic growth
• emerging metrics of excellence in Engineering and Science
• measurement is becoming reality (cf Sainsbury White Paper on Science)
2 If an individual researcher/group arrives at an idea in the course of their
relationship with H-W U, then they should share any success derived from that
ideation with the University to help the longer term viability of the institution.
Royal Society of Edinburgh 6
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 46
Challenges 1
The Process
• continuously evolving
Royal Society of Edinburgh 7
Stage 1 - Initial Evaluation
PROCESS ISSUES
• duty of candour diligence • minimise delay to publication
– formal capture of disclosure. • what does the academic want?
• contract formed with researcher • building trust
– disclosure of all relevant material
• formal filtering of the disclosure
– IEB
• decision
– is it novel?
– is it patentable ?
• exit route for unsuitable idea
(academic free to exploit?)
• turnaround time - 2 weeks
Royal Society of Edinburgh 8
Stage 2 - Commercialisation
PROCESS ISSUES
• further IP technical diligence • academic free to exploit if
• some commercial risk innovation deemed too
assessment (IEB) risky.
• if worthy - protection sought
• external commercial assessment
(e.g. Star Chamber)
• gap analysis (technology,
people, market)
• involvement & resourcing
agreed
Royal Society of Edinburgh 9
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 47
Stage 3 - Virtual Company
PROCESS OR: LICENSING OPPORTUNITY
• decision Produce
• IF VIRTUAL COMPANY? • proforma offer document
• identify ‘dream team’, eg • target customers list
– technical input • proforma license
– marketeer
– entrepreneur
– champion
KEY STAGES
• CEO/MD identified
• business plans rationalised
• non-execs found
Royal Society of Edinburgh 10
Stage 4 - Contracting
PROCESS ISSUES
Finalise • growth and exit routes
• legal issues identified and sought
• licensing
• financial issues
• company structure
• equity & royalty sharing
• management team reward
• role of inventor
• role of university
Royal Society of Edinburgh 11
Stage 5 - Process
PROCESS
• Provide
– infrastructure help
– director training
– external network facilitation
– VC engagements
– strategic funding opportunities
– vetted professional advisor placement
– fast-tracks to global operation
Royal Society of Edinburgh 12
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 48
Ideas Flow Chart
Virtual Incubator
No IPR Spin-out
Company Units
Idea
Financial
Generation IPR License
License Returns to the
Protected Out
University
Idea not
suitable
Royal Society of Edinburgh 13
Challenges 2
2 Other Options
– joint ventures
– licensing
– consultancy
– courses
• festina lente!
– graduates (and students)
• positive results
Royal Society of Edinburgh 14
Challenges 3
3 Balancing Expectations
• always work with the academic staff
• always protect the interests of staff and students
• realistic assessments and valuations
• defined parameters of expectations
• clear framework
– codes of practice
– operational
• ensure everything goes through the books
Royal Society of Edinburgh 15
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 49
Code of Conduct for TRS
• all ideas treated professionally and transparently (appropriate
diligence)
• University should provide most appropriate protection for ideas
• partnership relationship with the university
• University will provide best advice it can to get concepts to
market
Royal Society of Edinburgh 16
Rewards
• (almost) painless learning curve
• sharing of rewards - licensing (HWU 30/70:
50/50: 70/30 - £100K - 50/50)
• newcos - typically HWU <24% equity of an
incorporation
Royal Society of Edinburgh 17
Our Remuneration Scheme
is fair and attractive
Comparison of Net Royalty Distribution of £100,000 between UK and US Universities
£80,000
Proportion to Inventor(s)
Proportion to University
£70,000
Royalty Amount
£60,000
£50,000
£40,000
£30,000
£20,000
£10,000
£0
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Royal Society of Edinburgh 18
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 50
Challenges 4
4 Perceptions
• a juggling & balancing act
• need to
– build mutual understanding and clarity with all
audiences
– gain acceptance of our limitations
– establish the boundaries
– work on the chemistry
Royal Society of Edinburgh 19
Discrimination?
• history of close relationship with Scottish companies
– STRIDE programme
• “working with SMEs does not make you money”
– open to all serious enquiries
– willing to discuss options
– must have clear expectations
– charitable status, but not a charity
Royal Society of Edinburgh 20
What have we got?
• 15 newcos in 2.5 years
– yielding 75 jobs
• 2 trade sales - both in Scotland
• 2 joint ventures
• growing consultancy and CPD income
• transparent decision processes, structures, results, option
appraisals
• effective training programmes for staff and students
• a degree of harmony
Royal Society of Edinburgh 21
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 51
APPENDIX C
Historical View of Industrial Links at Heriot-Watt University
By Duncan Cameron
On 16th October 1821 in Freemasons Hall In Niddrie Street (now Cecelia’s Hall) the
School of Arts in Edinburgh, in which Heriot-Watt University has its roots, was
inaugrated. After the inaugral address by Leonard Horner the first lecture was in
Chemistry and was delivered by Dr Andrew Fife who later became a professor in the
University of Aberdeen.
Heriot-Watt College had a number of links with industry. In the early 1960’s an
Industrial liason Centre was set up and financed jointly by the Ministry of Technology
and the College. The Industrial Liason Officer was Pat Conway. His remit was limited to
making contact with small and medium sized companies in South East Scotland. There
was also the low Cost Automation Centre with Allan Inglis as Director. It was part
financed by the Ministry of Technology.
With a one off grant from the University Grants Commitee UniLink was set up by
Heriot- Watt University in 1969 to foster and strengthen links between the University
and industry. The development of the Research Park, the first of its kind in Europe, was
a major reponsibility of Unilink. Sadly the first Director of Unilink, Martin Chalmers, died
in August 1970. He was succeeded as Director by Arthur Gardiner in January 1971.
It was Principal Hugh Nisbet’s idea that there should be an area set aside on the
University’s new campus where industrial companies could establish research and
development laboratories and we discussed this idea with Sandy Hodge who at that
time was President of the Edinburgh Chamber of Commerce and with Dr Woodward of
Inveresk Research International.
Principal Robin Smith was a strong supporter of Unilink and the Research Park. In
1971 the first company to set up a research laboratory was Inveresk Research
International and the second building was for Edinburgh Instruments – a spin - off
company set up by Des Smith, Professor of Physics. Unilink was also directly involved
in the esatblishment, on the Research Park, of the University’s Institute of Offshore
Engineering.
The Research Park was a new concept in the country and was slow in attracting
companies in the early 1970’s. The number of companies grew significantly in the mid
1970’s following the development of the Syntex Research Centre on a six acre site with
over 600 employee’s, the majority of them being university graduates.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 52
APPENDIX G
Royal Society of Edinburgh Science
Base Research and Commercialisation
Workshop - Inverness
A Report of a Workshop
Organised by
The Royal Society of Edinburgh
and held at the UHI Millennium Institute Office on
28th June 2001
This report is based upon one commissioned by Inverness and Nairn Enterprise and produced
by Glenalfric Ltd.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 53
Royal Society of Edinburgh Science Base Research and
Commercialisation Workshop – Inverness
The Inverness event was attended by almost sixty people, including twelve who joined the
workshop by a video conference multi-link with Ardtoe, Stornoway, Kirkwall in Orkney and
Scalloway in Shetland. Participants were drawn mainly from private sector businesses, public
sector support services, and the academic partner institutions of the UHI Millennium Institute
(UHI).
Due to technical issues with video conferencing equipment, the venue had been changed at
short notice from The Green House, Beechwood Business Park on the outskirts of Inverness, to
the UHI Directorate in the city centre. As a consequence of this change, the room was filled to
over capacity, but the video conference equipment and expertise available ensured that all
participants were able to see and hear the proceedings. Discussion was lively and informed,
with contributions from a large number of individuals with a variety of backgrounds and
perspectives on the issues. A list of participants is included.
The meeting agenda was as follows:
• Chairman’s Introduction, Professor Robert Donovan, FRSE, Vice-President, The Royal
Society of Edinburgh
• Presentation by Dr Iain Glen, Research Director, Highland Psychiatric Research Foundation
• Presentation by Calum Davidson, Head of Knowledge Economy and Growing Businesses
Group, Highlands and Islands Enterprise
• Presentation by Dr Alistair Goodlad, Managing Director, SAGA Seafoods (1994) Ltd
• Panel Discussion with those above and Dr Douglas McKenzie, Managing Director, Integrin
Advanced Biosystems Ltd
Introduction by Professor Robert Donovan, FRSE, Vice-President, The Royal Society of
Edinburgh
Professor Donovan welcomed the audience to the fourth in a series of RSE Science Base
Research and Commercialisation Workshops. He explained that the main aim of the event was
to take a critical look at the challenges of the commercialisation process with a view to
identifying challenges, obstacles, and aspects of best practice. Previous workshops had been
held in Glasgow, Dundee and Edinburgh, and a final summary event, distilling the key points
from all four workshops, was planned for August 2001. Professor Donovan introduced the
speakers and discussion panel, and outlined the format of the event. He then thanked the
sponsors of the event, TVS, SHEFC and Fusion, a networking initiative managed in partnership
of Inverness & Nairn Enterprise with HIE, New Park Management and the Inverness and District
Chamber of Commerce. Participants joining the event by video conference were also welcomed
by the chair.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 54
Presentations
‘Science Base Research and Commercialisation – A UHI Millennium Institute View’, by
Dr Iain Glen, Research Director of the Highland Psychiatric Research Foundation
Dr Glen presented an outline of the opportunities and challenges for UHI in developing a
strategy for the commercialisation of research. He noted that research in the Highlands was
starting from a very low base, and without critical mass. Scientific publications overall within the
institution were limited, and UHI was a junior partner in intense competition for government-
funded research grants. However, there is a strong tradition of cultural creativity and democratic
intellect in the Highlands and Islands, and the combination of further and higher education
provides a new driving force for technology development. The natural environment also
provides a potential advantage for applied science-based research and commercialisation,
particularly in the areas of marine science and energy research. Dr Glen recommended proof of
concept, funded through commercialisation, as a rapid way of encouraging research and
commercialisation.
Dr Glen stressed that UHI needs to establish a structure for sustained business support,
possibly through incubator units, to manage science-based research and develop intellectual
property and commercial spin-outs. He noted the importance of rewarding inventors
appropriately. He then outlined the UHI draft proposals on intellectual property rights. In
conclusion, Dr Glen noted that despite the current low research base, areas of potential
research excellence and commercialisation potential had been identified, and UHI could look to
the future with confidence.
Presentation by Calum Davidson, Head of Knowledge Economy and Growing Businesses
Group, Highlands and Islands Enterprise (HIE)
Mr Davidson outlined the development of a HIE strategy for innovation and research over the
last decade. A series of innovation support frameworks had been put in place, and key sectors
such as health care, biotechnology, marine science, ICT, natural resources renewable energies
had been identified. Recognising that the Highlands cannot compete large, traditional, urban
centres of research, the area should concentrate on its particular strengths. Successes in the
area with advanced office space developments and the outreach incubator service were
highlighted.
However, innovative business developments had been hampered by the lack of a local research
base. Research activities had been quite disjointed, and efforts dissipated into discrete pockets
that did not impinge on the local business community. Potential innovations had also suffered
from a lack of coherent IPR advice and support, and a failure to capitalise on the commercial
opportunities that had arisen from small, EU-funded business projects. It was suggested that
these challenges were best addressed through the development and expansion of local
research institutes, and innovative support networks. There would also be a focus on UHI and
other university-based research activities. Mr Davidson noted a need to build on the success of
the outreach incubator services, and outlined plans for the establishment of a new Highlands
and Islands Virtual Innovation and Business Centre. The success of the Fusion initiative in
networking public and private bodies to encourage business innovation was highlighted. Key
activities for the future would also include collaborative research and development ventures with
UHI, funding bodies and the private sector.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 55
In conclusion, Mr Davidson noted that there was a need to accelerate the pace of development,
to focus on quality and appropriate research, to develop a range of UHI research specialisms,
and to work closely with research institutes and associations to ensure that research activities
are relevant to recognised economic development priorities.
Presentation by Alistair Goodlad, Managing Director, SAGA Seafoods 94 Ltd
Dr Goodlad detailed the major issues facing UHI in the development of a strategy for the
commercialisation of research. UHI partner institutions are mainly small further education
colleges spread throughout the Highlands and Islands, and with little or no current research
base. Despite the opportunities presented by ICT and modern transport links, there is no
apparent critical mass for research and development. Structural issues within the organisation
would also need to be addressed, as the formal relationship between UHI and its partner
institutions would determine the development of commercialisation potential.
It was noted that the scale of commercialisation activities could range from small projects with
local government or company backing, to larger research projects with major commercial spin-
offs, and large multi-partner commercial contracts. However, Dr Goodlad stressed that the
starting point for the development of a UHI commercialisation of research strategy had to be the
promotion of long-term wealth creation for the community served by the complex.
Panel Discussions
What sort of timescale should be projected for long term wealth creation strategy for the
Highlands and Islands?
There was general agreement that the creation of wealth through the commercialisation of
research should be viewed on a generational timescale. Current funding opportunities through
various public bodies should be used strategically by UHI to put structures in place that would
eventually lead to a self-sustaining research base. Ways would be developed of identifying and
bringing in key individuals to drive key research areas forward. A collaborative approach to
research with partners from outwith the Highlands and Islands was advocated. It was
recognised that the RAE as currently constituted might not be the most appropriate means of
reflecting research activities in the context of UHI.
What sort of advice and support ought to be available for SMEs?
The provision of information and advice to SMEs is now recognised as a mainstream activity for
the enterprise companies. The importance of a dedicated one-to-one information service was
emphasised, and the need for a co-ordinated approach to avoid confusing customers. For
technology transfer, SMEs need good graduates, good ideas, quality and cheap IPR, and
quality and cheap facilities. It was suggested that UHI might reverse engineer the traditional
university to company process by formally engaging SME expertise in its research activities.
It was suggested that more UHI academic partners should take advantage of the opportunities
presented by the Teaching Company Scheme (TCS), which has significant experience of the
measurable benefits of matching companies with academic expert help. The real benefit of this
arrangement to the SME was held to be the contact with the academic, so UHI would need to
be in a position to offer participating companies relations with good academic staff. TCS
partnerships with other Scottish Higher Education Institutes (HEIs) were also advocated.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 56
However, while recognising the enormous benefits of the TCS, it was noted that some larger
universities have identified issues with the loss of IPR into commercial companies.
What is the UHI policy on IPR?
Concern was expressed that EU-funded projects will not be financially viable for the smaller
colleges if UHI proceeds with its intention to take the overheads from commercial products. This
was recognised as a fundamental issue, noting that the feasibility of research in general
depends on the recycling of funds. It was stressed that to be viable for funding, all research
contracts need to sit within the institution’s overall research strategy, and that dual support
mechanisms for commercial activities and core support should be explored.
Is the purpose of research really to enrich the life of people in the Highlands?
Given the low population density in this area, urban paradigms for technology transfer do not
really fit. However, the quality of life is high, and the strengths of the area lie in its people. It was
noted that Scotland is a relatively easy place to establish a company, and correspondingly
presents significant opportunities for the commercialisation of research. However, a mechanism
is required for addressing practical considerations to make the most of these opportunities
before they are lost to other parts of Europe.
How can we best exploit knowledge and expertise in ‘softer’ areas of relatively low commercial
potential such as culture, education and society?
The difficulties in recognising and valorising intellectual capital were noted, and the need for a
transferable model for capitalising on expertise. UHI has the potential to facilitate the brokerage
of knowledge. If the knowledge available in the Highlands is of as good a quality as that
available elsewhere, the natural environment will be a crucial factor in encouraging inward
migration.
How can UHI best develop a research strategy that will impact on all its academic partners?
In response to this issue, the importance of achieving excellence in teaching as a base for
knowledge transfer in establishing a research base was highlighted. Noting that significant
amounts of intellectual capital leave the area through graduate export, respondents emphasised
that the mark of a successful knowledge and research strategy was to bring this intellectual
capital back to the area. There was some debate as to whether it was best to nurture home-
grown knowledge, or out-source knowledge acquisition by bringing in the best from outwith the
area. A partnership process was advocated whereby centres of strength within an institution
would be identified, to be developed over time with the help of world-wide expertise.
Have businesses in this area really identified a need for research, and are they prepared to
support it?
The ‘PICT’ project was described, where large companies are invited to invest in research and
development activities with identified commercial potential. A key aspect of ‘PICT’ is that all the
resources required to take the product from idea to market are built in at the start. Collaborative
projects with partners from other parts of northern Europe have identified the benefits of a
joined-up approach of research-generated business and business-generated research. The
need to involve the community was highlighted, and the development of a strategy based on
critical mass in key areas of activity.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 57
Is there a potential conflict between pure research and the drive to commercialisation?
There are already huge pressures on teaching staff, and UHI cannot afford to lose staff to spin-
out companies. It was argued that the potential of research commercialisation is best exploited
by retaining the academic staff within the institution to generate further commercialisable ideas.
A possible solution was to spin out post doctoral students to the commercial sector. In this
context, the experience of the University of Strathclyde was described, where there is a positive
policy encouraging spin-out company activities by academic staff. However, the potential
detrimental effect of losing senior academics for part of the session is acknowledged.
Furthermore, it was recognised that the impact of these activities on the knowledge economy of
the Glasgow area in particular and Scotland in general was very small. Around 50% of
graduates were moving out of Scotland and taking their knowledge with them. In order to
encourage graduates to remain in the area and facilitate local wealth creation, a change in the
business culture of the area would need to be effected. This would be addressed through the
provision of high-quality modules in enterprise and business development
Summary of Key Issues
A number of significant points on common themes emerged in the course of this event. These
are summarised in terms of their particular relevance to the UHI Millennium Institute, and to the
enterprise companies:
Key issues for UHI:
• UHI needs to accelerate the pace of its research development, focusing on a range of
quality research specialisms
• Internal structural issues such as funding allocation and IPR must be addressed
• Research activities must be aligned with identified economic development priorities, and
aim at long-term, generational wealth creation for the area
• UHI should make strategic use of current funding opportunities, including collaborative
partnerships with research institutes and other HEIs
• The encouragement of research activities across the institution must be based on a solid
foundation of excellence in teaching, including the integration of modules in enterprise and
business development into undergraduate and postgraduate programmes of study
Key issues for the enterprise companies:
• There will be continued support for research institutes working in priority development
research areas
• Dedicated information and advice centres will facilitate the support of innovation and
commercialisation of research
• Collaborative partnerships between business, education and research should be maintained
and encouraged
• The Highlands and Islands have a tradition and an expertise in ‘softer’ areas of knowledge
which must not be lost in the drive towards technological commercialisation
• The development of a commercialisable research base will provide a context for importing
knowledge by attracting high-quality researchers from outside the area, while at the same
time nurturing home-grown talent
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 58
• Significant applied research taking place in contexts other than higher education institutions
should not be ignored
Concluding Remarks
This was a well attended event which generated a great deal of interest and stimulated
meaningful debate. Feedback from participants was generally very positive – the confusion over
invitations, and the change of venue at short notice, did not overshadow the audience’s
appreciation of the quality of the presentations and the liveliness of the ensuing discussion. The
call to hold such events on a regular basis was echoed by many participants.
It was generally recognised that the Highlands and Islands offer particular opportunities for
research in terms of a general tradition of creativity, the natural environment and the recognised
quality of life in the area.
The event highlighted a willingness among participants to collaborate, share and work towards
long term wealth creation and the improvement of the quality of life in the Highlands and
Islands. Opportunities for bilateral and multilateral partnerships between businesses, education
providers and research institutes in the area were identified. The continued provision of a forum
for dialogue, connectivity and networking will help to capitalise on these opportunities.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 59
PARTICIPANTS
Mr Ken Abraham Managing Director, Omnitech ltd Uk
Ms Donella Beaton Chief Executive, Canan
Dr Alisdair Chambers Director, A&P Chambers
Mr Richard Constanduros Technical Director, Highland Natural Products Ltd
Mr Calum Davidson Head of Knowledge Economy And Growing Business Group,
Highlands and Islands Enterprise
Professor R J Donovan, FRSE Vice-President,Royal Society of Edinburgh, Professor of
Chemistry, University of Edinburgh
Dr William Duncan Executive Secretary, The Royal Society of Edinburgh
Ms Hazel Ferguson New Park Management
Mr Stuart Gibb ERI
Dr Iain Glenn Research Director, Highland Psychiatric Research Foundation
Mr Phillip Hamilton-Grierson Chairman, AI Welders
Mr Ray Harrison Managing Director, Edinburgh Biomedical
Sir Graham Hills FRSE Former Vice Chancellor, University of Strathclyde
Mrs Linda Kirkland Accounts Manager, Cap Gemini
Mrs Kay Lackie Administrator, Highlands and Islands Health Research Institute
Ms Norma Macdonald European Programme Manager, Highlands and Islands
Enterprise
Mr Ruaridh Macneil Head of Business Development, Inverness and Nairn
Enterprise
Mr Murdo Mackenzie Managing Director,New Park Management
Mr Ross Maxwell Managing Director, Albyn Medical
Dr J. Douglas McKenzie Managing Director, Integrin Advanced Biosystems
Mr Axel Miller UHI Research School Convenor, Natural Systems Science,
Dunstaffnage Marine Laboratory
Mr Douglas Mundie Chief Executive, Technology Ventures Scotland Ltd
Mr Alasdair Munro Innovation and Technology Co-ordinator, Highlands and Islands
Enterprise
Mr Richard Myers Business Development Inverness and Nairn Enterprise
Mr Alan A Nelson Partner, Scott Oswald
Mr Phil Olsen Director, Ardgay Data
Ms Colleen O’Toole Partner, Connections Research
Mr Chris Palmer Partner, Connections Research
Mr Archie Prentice Senior Economist, Highlands & Islands Enterprise
Dr Marc Rands Research Officer, Royal Society of Edinburgh
Mr Iain Ross Ardgay Data
Dr G.B Shimmield FRSE Director, Dunstaffnage Marine Laboratory
Mr Bill Sylvester Chief Executive, Inverness & Nairn Enterprise
Mrs Maggie Symonds Director, Calico UK
Mr Calvin Tan Development Director, Tri-Gas Ltd
Mr Hugh Thomson Director, Research and Consultancy Services, University of
Strathclyde
Mr Allan Thomson Managing Director, Wavegen
Mr Steve Tinsley Scotland Electronics, International Limited
Ms Susan Torrance Braidgrove Ltd
Ms Susan Walker Events Co-ordinator, Royal Society of Edinburgh
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 60
Mr David Wann Director of Funding and Deputy Chief Executive, SHEFC
Dr David Watmough Executive Chairman, Highland Innovation Centre Ltd
Mr Brian Wilson Business Advisor, Teaching Company Scheme, Highlands and
Islands Enterprise
Mr David Whittacker Pinnacle Business Solutions
Marine Farming Unit Ardtoe Link
Mr Malcom Gillespie Head of Aquaculture, Seafish Aquaculture, Marine Farming Unit
Ardtoe
Lewis Castle College Link
Mr David Currie Senior Manager, The Royal Bank of Scotland
Dr Frank W Rennie Convenor Research School of Sustainable Rural Development
Lews Castle College
North Atlantic Fisheries College Link
Professor Craig Ensler North Atlantic Fisheries College
Mr Alistair Goodlad Managing Director, SAGA Seafoods 94 Limited
Mr John McEvoy North Atlantic Fisheries College
Dr Lesley McEvoy North Atlantic Fisheries College
Orkney College Link
Dr Jim Chalmers Orkney College
Mr George Drever Orkney Enterprise
Dr John French Orkney College
Mr Ronnie Johnson Orkney College
Mr Douglas Sewell Department of Education and Recreation Services, Orkney
Islands Council
N.B Names in Italics denote Chairman and speakers
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 61
SPEAKER’S BIOGRAPHIES
Iain Glen
Dr Glen is the Research Director of the Highland Psychiatric Research Foundation. The
Foundation is an associated institute of the UHI Millennium Institute, and its spin-off company,
Psychiatric Diagnostics Ltd, is located within The Green House Business and Technology
Centre, Inverness.
Dr Glen is a psychiatrist. He trained in Glasgow, and in the 1960s joined the MRC in Chichester.
In the 1970s he moved to a MRC unit at Edinburgh University, and in 1981 he moved with his
research group to the Craig Dunain Hospital in Inverness and formed the Highland Psychiatric
Research Foundation.
Calum Davidson
Calum Davidson is head of the Knowledge Economy and Growing Businesses team at
Highlands & Islands Enterprise. Born in Thurso and brought up in Shetland and Inverness,
Calum is a graduate of the Glasgow School of Art and Stirling University. Having worked with
the HIDB and HIE since 1985, Calum’s background covers all areas of business development,
investment and project management in Scotland, with particular experience in developing and
managing research projects in the knowledge and information sectors. Calum also has a strong
interest in developing new business and research activities and delivering business support
through local, Scottish and European partnerships, as well as through the innovative use of
online technologies.
Alistair Goodlad
Originally from Shetland, Alistair Goodlad studied at Aberdeen for an MA and PhD in
geography. This was followed by two years in Canada as Assistant Professor of Fisheries
Geography at Memorial University Newfoundland, four years with the United Nations in Rome
and Casablanca, and seven years in Bahrain and Saudi Arabia running construction and
fisheries companies.
Since 1983 he has resided in Shetland, working mainly in aquaculture, operating his own
salmon farm, processing factories and live fish-carrying vessels as well as international
consultancy work. He serves on the board of a number of companies, is a Shetland Islands
Councillor, Chairman of Shetland Harbour Board (Sullom Voe) and Lerwick Port Authority.
Douglas McKenzie
Douglas McKenzie is the founder and managing director of Integrin Advanced Biosystems Ltd,
In 1981 he graduated with a degree in zoology from the University of Glasgow, and obtained a
PhD at Queen’s University Belfast. From 1985 to 1988 he was a research fellow in the
Department of Physiology, University of Leeds. From 1989 to 1999 he held the post of research
fellow and Marine Biotechnology Group leader at the Scottish Association of Marine Science
Dunstaffnage Marine Laboratory, Oban.
He founded Integrin Advanced Biosystems Ltd in October 1999.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 62
SPEAKER’S PRESENTATION
Science Base Research and
Commercialisation Workshop
Organised by the Royal Society of Edinburgh
Inverness
28 June 2001
A UHI Millennium Institute View
Dr Iain Glen
FRIDAY 4TH JANUARY 1991
HIGHLAND UNIVERSITY PLAN BACK
ON THE AGENDA
Following the realisation that new developments
in information technology provided:
• the means to connect existing colleges and
research institutes
• the basis of a new philosophy of learning
the plan was conceived to realise a higher
education institute within a decade.
Why the plan succeeded
• Previous attempts, e.g. Hugh Gunn’s plea
in 1931, had failed because it was not
inclusive in its approach.
• The new plan captured the political and
public imagination.
• The huge commercial potential was
realised by enterprise agencies.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 63
‘Because science flourishes,
must poesy decline?’
Hugh Miller, in A Sketchbook of
Popular Geology, 1859
Democratic intellectualism
(Walter Elliot) becomes George
Davie’s The Democratic
Intellect in 1961.
The combination of higher and further
education provides a new driving force
for technology development in the
Highlands and Islands
Scottish Universities
Despite the facts that
• Scotland has 9% of the UK population but 15%
of the academic science base;
• For scientific publications per capita Scotland
ranks third in the world;
• 57% of Scottish scientists and technologists
(51% in USA) are interested in seeing their work
applied in industry;
spin-outs and entrepreneurship are still low.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 64
Problems facing growth of
science in the UHI Millennium
Institute
• Only some colleges and institutes have an
established science base.
• Scientific publications overall are limited.
• Junior partner in intense competition for
government-funded research grants.
Science-based research and
commercialisation
We have unique advantages in
• natural environment
• marine science
• energy resources.
How can we best make use of these
advantages?
Why commercialisation?
• New ideas in academia often have to
overcome peer review.
• Thomas Kuhn described the peculiar
difficulties facing paradigm shift in The
Structure of Scientific Revolutions (1962).
• Academics find industry more receptive
to innovation, and government is
beginning to recognise this.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 65
Commercialisation
objectives and management
We need to increase ability to
• attract commercial contracts
• develop intellectual property
• increase commercial spin-outs.
Experience of our research
foundation
• Commercial contract funding with a
Scottish pharmaceutical company since
1981. (One-third government, two-thirds
commercial funding)
• Patents developed from 1996 onwards.
• Spin-out company formed in 1998.
• Associate partner in UHI project, 1998.
Experience of our research
foundation
• In developing commercial contracts,
business support was clearly essential.
• Ad hoc consultancy proved inadequate.
• Business support needs to share the pain
as well as the gain; our move to The
Green House achieved this.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 66
Supporting development of
spin-out companies
• UHIMI recognises the need to reward
inventors within a research group.
• Thereafter inventors need to feel
confident to hand over research
development to spin-out companies or to
onward negotiation for invention
development with business support.
UHIMI draft proposals on
intellectual property rights (1)
• Based on Scottish Universities Research
Policy Consortium document University
Research in Scotland – developing a
policy framework, 1997.
• Includes standard recommendations on
co-authorship, acknowledgement and
citation, and ownership of intellectual
property, including student agreements.
UHIMI draft proposals on
intellectual property rights (2)
• Following the Research Assessment Exercise, it
has been suggested that 30% of the RAE funds
awarded would be retained by the research
group/ organisation and 70% by UHIMI.
• Where commercial contracts are obtained by
groups or organisations, it is not proposed at
present for UHIMI to take overheads but this
will be reviewed in two years’ time. Cash inputs
to achieve contracts will be returned to UHIMI.
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 67
Calum Davidson
Head of Knowledge Economy
Highlands and Islands Enterprise
Innovation and HIE
• Development of Innovation Support
Framework
• Concentration on Key Sectors
– Healthcare, Biotech, Marine Science, ICT,
Natural Resources
• Advance offices and Incubator Space
• Outreach Incubator service
Key Challenges
• Lack of local Research base
• Disjointed Research activities
• Access to IPR advice and support
• Limited exploitation and commercialisation
• Dissipation of effort
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 68
How do we address these
• Facilitate the development and expansion of
Research Institutes
• Develop Innovation Support Networks
– formal and innovative
• Focus on UHI and other University based
research activities
HIE’s Key Activities
• Outreach Incubator Services
• Highlands and Islands Innovation Support
Service
• Virtual Innovation and Business Centre
• Fusion Itself
• Focus on collaborative R&D services with
UHI and the private sector
Royal Society of Edinburgh | Science Base Research and Commercialisation Workshop Summary | Page 69
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