In response to the current coronavirus crisis, we have seen a number of high profile academic-industry partnerships announced, including a new testing laboratory in Cambridge set up by AstraZeneca, GSK and the University of Cambridge, and plans by the University of Oxford and AstraZeneca to further develop and manufacture a COVID-19 vaccine that was initially developed and is currently being trialled at the University. Partnerships between academic institutions and industry are crucial for the translation of lab-based research into real-world benefit, and have produced huge numbers of drugs, therapies, vaccines, diagnostics and medical devices that we rely on today, with many more in the pipeline.
In order to successfully partner with an academic organisation to develop and commercialise a drug or other therapy or technology, it is important for potential industry partners to appreciate the priorities and drivers of the academic partner, as these can differ significantly from those of a commercial organisation. In this article we discuss some of the issues that matter most to universities and other academic institutions that set them apart from commercial organisations. We focus on the UK, although many of the issues have worldwide applicability.
In the UK, universities and most research institutes are charities and must act for the public benefit and in line with their charitable purposes to advance knowledge and learning by teaching and research. They must act prudently and not put their assets at an unjustifiable risk. A charity cannot be run for profit (any profit must be incidental to its charitable purposes), so universities commonly commercialise intellectual property through technology transfer subsidiary companies. While the technology transfer companies of universities are usually limited liability companies, they are aligned with the parent university’s objectives, and it is important to always bear these objectives in mind when partnering with a university or its technology transfer company. Universities in the United States are also not-for-profit organisations, and similar principles apply.
Preserving Academic Freedom
One of the top priorities for an academic organisation is to preserve its freedom to conduct academic research, even where an industry partner is taking an exclusive licence to the relevant patents and know-how.
In the UK, there is a statutory exemption to patent infringement in the Patents Act 1977 known as the ‘experimental uses exemption’. This is a general exemption for acts done for ‘experimental purposes relating to the subject matter of the invention’, but this has been narrowly interpreted by case law. It covers experiments carried out to find out something new about an invention claimed by a patent, but does not provide blanket permission for all research using the invention, and is therefore not particularly useful for universities wanting to preserve their rights to carry out academic research using the inventions they have developed and subsequently licensed to industry partners.
When partnering with industry, academic organisations will therefore always require an express contractual right to continue to conduct academic research and teaching using the intellectual property that is being licensed to the industry partner. An express right such as this will also cover the continued use of any licensed know-how by the academics. It is likely the academic organisation will also seek the right to conduct this research with their collaborators. While reserved academic rights are non-negotiable for universities, there is always some room for negotiation around the precise scope of the reserved academic rights depending on the circumstances, such whether or not the research can be done in collaboration with commercial entities or benefit from commercial funding.
Ability to Conduct Clinical Trials
In addition to carrying out academic research, universities also commonly seek to preserve their rights to conduct academic clinical trials, even where the industry partner will be exclusively responsible for developing and commercialising the therapy in question. In the UK, activities that are conducted “for the purpose of a medicinal product assessment”, such as the running of clinical trials in order to generate data to support a marketing authorisation, are exempt from patent infringement. However, academic organisations may also seek to preserve a contractual right to carry out academic clinical trials that would otherwise infringe a patent exclusively licensed to the industry partner, and to ensure that they also have a right to use any licensed know-how in such trials.
In common with reserved academic rights, the scope of the academic organisation’s right to conduct clinical trials will be negotiable depending on the circumstances. An industry partner will often seek to impose a number of parameters around those trials, such as specifying which particular researchers are permitted to run the trials and how the industry partner should be involved (for example, in the design of the trials), given the impact that the results of those trials could have on the industry partner’s own development programme.
An industry partner taking a licence of technology from an academic organisation will naturally wish to benefit from any improvements made by the academics in the future. A university may be willing to offer access to its improvements, but will resist providing an unlimited pipeline by tightly defining the improvements that the partner may access. It is quite common for an industry partner’s access to improvements to be limited to those improvements that fall within the claims of patents already licensed, and to improvements generated by a specific researcher or laboratory in a specific period of time. Granting access to improvements can restrict the ability of a university to access funding for its research, which is crucial for a university and the individual academics, so a licensee’s right to improvements may be subject to any rights that third parties may have. Access to improvements can be via an automatic licence or an option to take a licence, but if the industry partner wishes to have a broader right to improvements and new inventions, this can often be achieved via a ‘right of first negotiation’ mechanism, where the academic organisation must offer certain defined improvements and new inventions to the industry partner before anyone else.
Publish or Perish
Publication is the lifeblood of academics and their organisations, and is critical to the careers of individual academics and to the funding of universities. In collaboration agreements and technology licences, a right for the academics to continue to publish their research is likely to be non-negotiable. There are fairly standard parameters around this publication right; the academic organisation will usually accept an obligation to run publications by the industry partner, and allow certain confidential information to be removed before publication. It is also common to allow for a delay in publication for a certain period of time to allow time to apply for patents in respect of any invention disclosed in the publication, if necessary. The timeframes for these processes are negotiable and will depend upon how competitive the area is – in a strongly competitive area, delays on publication can become critical for the academics.
Approach to Risk
As mentioned above, universities are charities and are generally risk averse. As charities they must not put their assets at an unjustifiable risk and it is therefore common for universities and their technology transfer companies to seek to cap their liability where possible. They will also resist giving warranties around the intellectual property that has been developed at the university, although there is a fair amount of variation depending on the academic organisation and the particular technology involved. The type and level of liability that an academic organisation will accept will depend on the activities they carry out as part of the partnership. Universities will often accept contractual liability if they fail to carry out R&D work that is their responsibility, but the responsibility and risk of exploitation is nearly always firmly on the industry partner.
Unfortunately, research collaborations and licences do not always pan out how the parties had hoped. The competitive landscape and the priorities of the industry partner can change. Many situations have arisen where technology that has been licensed to an industry partner ‘sits on the shelf’ and the academic organisation involved has found it incredibly hard to progress the technology with another partner. This is why, when entering into a partnership, an academic organisation will want to deal with such a scenario at the outset, to ensure that it can take the licensed technology back in-house and find a new industry partner in future, and continue its mission to translate its research into real-world benefits.
In an ideal world for the academic organisation, it would have a clear right to use the improvements, materials and clinical data generated by the industry partner with a new partner if the original industry partner does not progress the technology. In reality, this is often difficult to agree at the outset. It is often agreed that if the partnership were to come to a premature end, the parties will negotiate in good faith a licence back to the academic organisation of such improvements, materials and clinical data on commercial terms to be decided at the time. Such a ‘right to negotiate’ is likely to be an unenforceable agreement to agree under English law, and an academic organisation may seek to include a mechanism for the terms to be decided by an independent expert if the parties cannot agree.
The COVID-19 crisis has catapulted scientific research, and academic-industry partnerships in particular, into the limelight. These types of partnerships have a long history, with many success stories over the decades. Experienced industry and academic partners are well aware of the needs and priorities of the other, and this understanding is vital to their success. In the coming months, we hope to see these new partnerships start to bear fruit to help the world through the coronavirus crisis.