Untying the nods of university-company collaboration

Regis Assao, Director of Allagi Open Innovation Services

When talking about partnership with universities, it is important to remember they have a very different mindset. Companies that are not used to deal with universities may find a lot of difficulty in the interaction. In fact, even the ones with more experience still face some challenges when involved in collaborative projects.

While companies have goals usually based on strategic and financial outcomes, professors are measured by the generation of knowledge (publications) and of new human resources (number of masters and PhDs). At this point, the issue of confidentiality is of great concern. The university must generate knowledge and transfer it to society through publications and theses. The industry, in turn, tends to view everything as an industrial secret. It is natural that concerns arise from both sides.

The solution depends on the maturity and on the relationship between the parties. With common sense and patience, both sides reach a compromise and develop a relationship of trust. The professor does not publish without the authorization and review by the company. The company ensures the researcher publishes scientific results without revealing the secrets. This is done, for instance, by parametrizing data, by not identifying the company in comparative studies, by limiting the disclosure of results to qualitative demonstrations, among others.

Another relevant issue is the timing: the companies have deadlines to launch products, to renew their portfolios and to remain competitive, while in academia, even if there is no solution to a problem or the delivery of a concrete result, the learning process is already considered a milestone, therefore, there is less pressure regarding time.

A third issue that hinders interaction is related to the contract, not only because of the long approval process, but mainly due to the intellectual property clauses. Before being signed, an agreement goes through various instances for approval: by the department of which the professor belongs, the university, research centers, academic councils, funding agencies, technological innovation units, attorneys and finally the dean and rector. It is a bureaucratic process, with decisions that must be made collegially, in meetings that sometimes occur only once a month.

When at the Unit for Technological Innovation or the attorney, the main decision will involve intellectual property.

Two laws can generate difficulty in the interaction and negotiation among parties: the Law of Innovation states that intellectual property should be divided proportionally to the contribution of each part in the project, which is rather vague and creates several controversies. Meanwhile, universities are limited by Law 8,666, which requires universities to bid for sale or for the use of a public good, among other obligations. As intellectual property is considered an asset, it ends up being treated as a public space of the university, just like a cafeteria would be.

What is the solution to meet Law 8,666? Universities can establish covenants or cooperation agreements, instruments in which both parties contribute equally to achieve a goal, with balanced duties and benefits. Thus, it is not necessary to make a bid to regulate the use of intellectual property, which would now have to be divided equally among the parties.

The academia also understands that the calculation of each part’s proportion of contribution is controversial and difficult to calculate. To facilitate the discussion, they propose a division in equal parts, also consistent with the principals of an agreement. However, if the company uses intellectual property for economic benefits, it is using its half  but also the university’s half, and it would have to pay a “rent” to profit from this asset, which is technically called royalties.

On the other hand, the company could pay 100% of the costs of the project, and the apportionment of the contribution would be of 100% to the company and 0 to the University, a case in which the payment of royalties is not request. Nevertheless, the investment on researchers that will work on the project, if calculated, would be much higher than the value the company is investing on the project.

Many times, the issue is quite difficult to negotiate. What we see is that more important than having  100% of the intellectual property, it is the exclusive use of a patent for a limited time (2 to 5 years, usually),  the  preference to acquire the intellectual property in case of sale, or have exclusive use in the area of interest (for instance, a patent that is licensed exclusively to the production of automotive paints, but is freely licensed by the university to the textiles industry), exploitation exclusiveness at a certain territory or the combination of such alternatives.

As seen, developing partnerships between universities and business is a very complex topic and sometimes of difficult negotiation. There is a path of maturity on both sides, and we must consider that this subject is relatively new in Brazil. However, many companies are now learning how to deal with these constraints and have achieved significant results, such as Petrobras, Embraer, Natura, Fiat and BG Group.

The good news is that the New Code of Science, Technology and Innovation aims to eliminate most of those nods. Concomitantly, the Government is analyzing unpacking the code to anticipate the implementation of some measures. We must wait and hope!

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