Frequently Asked Questions: Knowledge Transfer for Universities and Research Institutions

Key issues and core concepts

Knowledge transfer is a process that allows research results, discoveries, scientific findings, intellectual property (IP), technology, data and knowhow to flow between different stakeholders. Most commonly, the term refers to the transfer of such assets from universities and research institutions to industry or governmental institutions, thereby generating economic value and industry development.

  • Formal and informal channels: Knowledge transfer occurs via both formal and informal channels. Formal channels typically involve a legal arrangement through which the parties clearly establish the terms of the transfer of given intellectual assets. Common examples are licensing, start-ups and spin-offs, contracts, research projects, etc. Informal channels, on the other hand, refer to personal contacts and hence to the tacit dimension of knowledge transfer. Examples include human capital mobility, publications, teaching, interactions in conferences and seminars, informal exchanges between researchers or academia and industry, students entering the workforce, etc.
  • Technology transfer: While the term knowledge transfer is often used synonymously with technology transfer, they have different meanings. Technology transfer concerns transfer of innovative solutions of problems that are protected by different intellectual property rights. Knowledge transfer is a broader term and covers other areas of research, including social sciences, as well as less formal transfer mechanisms.

IP commercialization is the process through which firms create economic value by converting knowledge, discoveries and inventions into new or significantly improved products and services. The commercialization process can be different at each university or research institution, but usually involves the following steps:

  • submission of the innovation or discovery (usually through invention disclosure forms)
  • evaluation (assessment to determine the scientific and commercial value of the knowledge)
  • protection (intellectual property or other type of protection)
  • business case and commercial plan (determining if the innovation or discovery is truly feasible), marketing, product development plan, and other commercial considerations.

The benefits of research commercialization are shared among different stakeholders ranging from universities and research institutions to inventors, research departments, sponsors, private sector, etc. Many universities and research institutions have well defined policies to support, encourage and enable the commercialization of knowledge and technology. They may include the establishment of knowledge transfer offices and associated policies for invention support, creation of start-up and spin-off companies, programs to sustain company development, incubators and accelerators, research parks, and participation in organizations and networks focused on IP commercialization.

For more information, consult our website on IP Policies for Universities.

IP valuation is the process of identifying and measuring potential benefits and risks of an intangible asset. IP valuation is important for business planning, licensing, acquisitions, mergers, investments, joint ventures and loans. Valuation methodologies are important, because funding institutions are often willing to consider investment in research and innovative technologies, but lack the methodology with which to assess the value of IP assets.

IP valuation is considered as one of the most complex issues in the process of IP commercialization as it is very volatile and subjective. IP valuation, at least in its quantitative approach, appears as scientific calculation and in fact it is only an estimation depending on the experience of the valuator in the particular area and his or her ability to make technical, market and IP projections in the future (except in litigation where valuation of the lost benefit would be done based on past events and existing market data). In addition, the value of an intangible asset further depends on the context, thus the same asset can simultaneously have different values in different contexts.

Obviously, IP valuation is not a purely mathematical calculation, even when it is based on formulas. There is always an element of subjective selection of relevant data that the valuator is going to use for the projection of potential benefit of an exploited asset, taking into account the risk that the technology might not be successful due to technical characteristics of the product or market or IP problems.

The reasons are multiple, starting with the fact that universities and R&D institutions often deal with early-stage technologies, very far from market penetration and use, which makes any projection of the future benefit extremely risky – at this stage it is very difficult to define potential fields of use and thus to identify a suitable market in which technology would be exploited. The other impeding element is the lack of IP professionals with appropriate skills to conduct IP valuation.

There are two major IP valuation approaches:

  • qualitative, which is an evaluation of an invention based on defined criteria related to technical, IP and market requirements in order to determine if the research result is valuable for further investment and IP commercialization, usually done in pre-commercialization phase; and
  • quantitative, which is the process of measuring the potential benefit and risk that can be generated by an IP under assessment.
  • The quantitative approach, which aims to give monetary value to IP, has a number of developed methodologies associated with it, among which the most used are: Cost Method, Market Method and Income Method (which has numerous variations such as Discounted Cash Flow, Monte Carlo program, Real Option etc.).

Forms of knowledge transfer

There are various formal and informal channels through which knowledge may be transferred. Among the most frequently-used formal means of knowledge transfer are:

  • licensing,
  • assignments,
  • collaboration contracts,
  • material transfer agreements,
  • sponsored research agreements,
  • consultancy agreements,
  • franchising and establishment of spin-off and start-up companies.

Informal transfer of knowledge is becoming more and more important in the academic environment as the mobility of researchers and students is greatly contributing to the dissemination of knowledge worldwide. Knowledge can also be transferred through publications, teaching, conferences, courses, presentations, meetings and informal exchanges and personal contacts between scientists, academia and industry.

In the context of formal channels of knowledge transfer, it is important to bear in mind that there is no such thing as a standard contract or agreement. Some universities and research institutions propose standard models of agreements as part of their IP policies, but such models are only to be used as a starting point, a support or a tool, and need to be adapted to the specific circumstances and requirements of each case. It is crucial to consult an IP lawyer from the beginning of the negotiation and in particular when signing the agreement.

An assignment of IP rights involves the transfer of ownership of IP (patent, utility model, trademark, copyright, know-how protected by a trade secret, etc.) from the owner (assignor) to the assignee (physical or legal entity) with permanent effect.

The assignment contract must accurately identify the subject matter of what is assigned. In case of patented inventions for instance, this may include: granted patents but also provisional patent applications, including PCT applications, or trade secrets that are intended to remain as such.

The difference between licensing and assignment of IP is that in licensing relations the right to use the IP is temporarily transferred to the licensee, often giving the licensor the right to continue to exploit the same IP in a different field of use or territory. Under negotiated conditions a licensing agreement can be terminated and all rights transferred back to the licensor. On the other hand, an assignment of IP rights has definitive effect, like selling tangible assets, thus the former owner will be permanently divested of the ownership.

A license is a consent by the owner to the use of IP in exchange for money or something else of value (e.g. cross licensing). It becomes an actual transfer when the licensor delivers the technology and knowledge to the licensee and the licensee learns how to effectively use, adapt and where possible improve the technology and knowledge.

IP licensing occurs in the context of various business and collaboration relations, such as mergers and acquisitions, joint ventures, research collaboration agreements, joint research and development arrangements, etc. Technology licensing only occurs when one of the parties owns valuable intangible assets, known as intellectual property, and because of that ownership has the legal right to prevent the other party from using it.

For more information on licensing, different kinds of licenses and specificities of licensing negotiations, consult our guide on Successful Technology Licensing (STL).

In today’s knowledge-based economies, the prevailing model of IP collaboration among academic and business organizations is “open innovation”, based on licensing deals among various participating partners. Therefore, there is a growing interest on the part of innovation stakeholders in acquiring more practical knowledge about licensing as a useful tool for transfer of knowledge and IP.

Franchising can be defined as a business arrangement, whereby the goodwill, reputation, technical expertise, trademark and know-how of the franchisor are combined with the investment of the franchisee for the purpose of selling goods or rendering services directly to consumers.

The outlet for the marketing of such goods and services is usually based on a trademark or service mark or a trade name and a special design of the premises. The licensing of such a mark or name by its owner is normally combined with the supply by that owner of technical know-how (usually protected by the copyright on content of the Manual containing know-how based information) and in situ assistance. Simply put, in a basic franchising arrangement the franchisor has developed a successful system for conducting business, and the franchisee wishes to reproduce and operate the same business system, using the same name, usually in a different geographic area.

A joint venture is a business entity created by two or more parties pooling their resources with the objective of implementing a common business purpose. It is generally characterized by shared ownership, shared returns and risks and shared governance. For example, one party may contribute with technology or know-how and the other party may provide investment. A joint venture often includes a license agreement to regulate the use of the proprietary information and background IP that each party brought into the collaborative business.

Types of joint venture

There are two fundamental forms of joint ventures, the equity joint venture and the contractual joint venture. The equity joint venture is an arrangement whereby a separate legal entity is created to act as the vehicle for carrying out the project. In a contractual joint venture, the parties come together for a particular business project and sign a contract outlining the terms under which they will work together. The parties do not set up a separate legal entity for the project but work together in partnership, sharing the profits or losses of the venture on the terms set out in the contract. Different contractual means for the commercial transfer and acquisition of technology can be used in either form of joint venture arrangement.

In addition to license contracts, there are various other forms of contractual arrangement such as: collaboration agreements (or collaborative research agreements), sponsored research agreements, contract research agreements, consulting agreements, material transfer agreements (MTAs) and non-disclosure agreements (NDAs) (or confidentiality agreements).

Collaboration agreements

Collaboration agreements or collaborative research agreements are concluded by two or more parties that wish to cooperate to develop and possibly commercialize a new technology. The parties invest their human, physical and financial resources, assets (including background IPRs) and skills. They jointly define the objectives and legal framework of the collaboration, including IPRs ownership, access rights, benefits and risks sharing and rights to commercialize the research results. This type of agreement may be used in the context of academic research collaborations, in particular under research grants, as well as for university-industry joint research projects, including PhD projects.

Sponsored research agreements

Sponsored research agreements govern the relationship between a university or a PRO and a sponsor, that may be a government body or commercial entity interested in developing scientific results in a particular area of relevance for its business. The R&D institution receives funding to support the research in return for preferential access and/or rights to IP deriving from the research results. Contrary to collaboration agreements, the sponsor does not necessarily participate in research activities and may not be interested in the commercialization of the results. The university / R&D institution usually owns the results and IP developed and grants a license (exclusive or non-exclusive) to the sponsor.

Contract research agreements

Contract research agreements are concluded when a commercial company “hires” a university or a PRO to conduct research toward a commercial goal. The objectives of the research are defined by the company and the goals are commercial, not academic. The contractor is fully covering the research costs and IP protection and bears all the risks for the research. The results are usually owned by the company (see EC Recommendation on the management of intellectual property in knowledge transfer activities and Code of Practice for universities and other public research organisations, 2008), with patented inventions or other IPRs being assigned by the university to the contractor.

Consulting agreements

Consulting agreements involve consultancy work by university professors and/or researchers who provide expertise services to an industry partner in exchange for payment, often on a personal basis, if allowed by the university’s policy. The resulting IPRs are most of the time owned by the company, with limited rights of the researcher to publish his or her results. The IP ownership of developed results may also be shared, depending on the Institutional IP Policy of the academic institution and terms of the agreement.

Material transfer agreements

Material transfer agreements (MTAs) govern the transfer of physical assets and tangible research materials from the provider to the recipient that intends to use them for the purpose of its own research. The transferred assets may include patented materials transferred through a license, biological materials, chemical compounds or software. The agreement defines the rights and obligations of the parties regarding the transferred materials, derivative materials, research results and related IPRs.

Non-disclosure agreements

Non-disclosure agreements (NDAs) or confidentiality agreements are legally binding agreements not to disclose confidential information that a party has learned, or not to use it for any purposes other than those specified in the agreement. They are often used before an IP license or other agreement is established, when the licensee wishes to have further detailed information about the IP or technology concerned. In the context of a collaboration agreement for instance, both parties may take an obligation not to disclose or use the information regarding background IPRs of the other party.

Academic spin-offs (or spin-outs) are newly-created companies based on a new technology developed by a university or a PRO. The researchers involved in the development of the new technology often leave their original position at the university and end up in the new company. The university and the spin-off company usually share risks and benefits through different forms of joint venture arrangements. Spin-offs are often owners or exclusive licensees of the IPRs on technologies developed at the university.

A start-up is a company built on a university granted license for one or more technologies. As opposed to a spin-off company, the founders of a start-up are not affiliated with the university where the new technology has been developed and the company’s financial resources are drawn from external sponsors. The agreement concluded between a university or a PRO and a start-up company needs to address some key considerations: IP, financial conditions, management obligations, conflict of interest concerns, participation and support of the university inventor, commercialization or business plan with development milestones and a pathway to market launch and exit.

Other topics

Knowledge Transfer Offices (KTOs) are usually in charge of managing the transfer of knowledge and technology to industry and of managing IP assets of the university, but their mandate may be broader and cover any interaction or contractual relation with the private sector.

Ideally, KTOs would be self-sufficient and eventually generate additional income for the universities. However, experience shows that not all KTOs manage to become self-funded, and even when they do, start-up funds are generally required for a number of years. In some countries, governments support the establishment of KTOs by means of financial and/or technical assistance. National patent offices are often called upon to provide technical support to KTOs, particularly in the early phases.

KTOs may be internal to the institution, attached to the university or faculty authorities, or the responsibility for knowledge transfer may be transferred to a separate agency, foundation or university owned company. The establishment of joint KTOs for groups of universities or PROs that are based in the same region or specialize in similar fields is an option that has been implemented by a number of institutions in developing and developed countries alike. One of the main reasons for establishing joint KTOs is that individual universities may not generate sufficient work to justify the creation of a specialized office with skilled human resources. Arguments in favor of such an approach emphasize the importance of having a critical mass and the possibility of hiring highly skilled human resources at a lower cost for each individual institution. Nevertheless, it may also be argued that it is important that KTOs are within the university itself so as to have more direct interactions with the researchers and to avoid situations of institutional mistrust when the office is shared with other institutions.

For more information about IP laws and regulations in different countries, consult the WIPO Lex database.

Every country has a number of IP laws and other implementing rules, regulations and policies that can affect knowledge transfer-related processes. Some countries have specific laws on knowledge transfer, technology, innovation or university-generated IP. There may also be relevant provisions in patent and industrial property laws, trademark laws, copyright laws or other pieces of national legislation. Universities and PROs may also have knowledge transfer-related regulations in their own institutional IP policies. International treaties and bilateral arrangements in force in a given country could also affect knowledge transfer processes. It is always important to consult the relevant provisions and an IP lawyer before engaging in any knowledge transfer-related activities.

Assistance

WIPO offers a broad range of advice, resources and support services to universities and PROs and promotes IPRs management and knowledge transfer processes in member states through thematic projects and capacity building programs. WIPO provides member states with advice and assistance on legal framework, policy analysis and IP management; it conducts capacity building projects and publishes tools, manuals and training materials. WIPO also undertakes a growing range of activities to support the development of IP policies for universities and PROs around the world.

WIPO also provides platforms (WIPO GREEN and WIPO Re:Search) enabling collaborations in specific areas of knowledge transfer and partners with public and private institutions in the organization of forums with the aim of facilitating the matchmaking between technology providers and technology seekers.

The WIPO Arbitration and Mediation Center provides dispute resolution advice and case administration services to help parties resolve disputes arising in the area of research and development (R&D) and technology transfer, without the need for court litigation.

For more information please see our Supporting Technology and Knowledge Transfer website.

WIPO provides assistance to universities and R&D institutions in WIPO member states, based on requests submitted by the member states’ governments.

Knowledge transfer related assistance may be sought with national bodies established by relevant laws and policies to support knowledge transfer in your country. One of the main IP related service providers is the national IP office, in particular in the area of IP protection.

Further information can be obtained from our dedicated webpage IP Policies for Universities and Research Institutions. In some developing countries, Technology and Innovation Support Centers (TISCs) provide inventors with information and services on a local level.

The WIPO Inventor Assistance Program (IAP) can also help inventors from developing countries with limited financial means, by matching them with patent attorney providing pro bono legal assistance.

It is paramount to seek professional legal advice and consult an IP lawyer or attorney in your country at the earliest possible stage.

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Disclaimer: The questions and answers provided on this page serve a purely informative purpose and are not a legal point of reference. They do not necessarily represent the official position of WIPO or its member states.