For intellectual property creators
Information for the University of Melbourne research staff and students who want to be involved in its commercialisation and create impact from their research
Also referred to as technology transfer or research translation, technology commercialisation is the transfer of knowledge and discoveries to the broader community. It can occur through publications, educated students entering the workforce, exchanges at conferences, relationships with industry, and more. On these pages, the term “commercialisation” will be used to refer to the formal licensing of technology to third parties, under the guidance of professionals employed by the University’s Technology Licensing Service (TLS). This includes the full spectrum of research translation activities such as royalty-free licences, open-sourcing, and transfer of knowledge to social enterprises and not-for-profit ventures, as well as more conventional licences to established, for-profit companies, start-ups and spin-outs.
The University of Melbourne engages in technology transfer to create impact, change the world for the better, and enhance its reputation. Generation of revenue to fund further research is an important but secondary goal that flows naturally from success in creating impact.
Why would a researcher want to participate in technology commercialisation?
According to the broad definition of technology commercialisation, commercialisation of research is necessary to achieve impact from the research – that is, to use the research to make a contribution to the economy, society, culture, national security, public policy or services, health, the environment, or quality of life, beyond contributions to academia. Reasons for researchers to become personally involved in generating impact from their research are unique to each researcher, and might include:
- Making a positive impact on society
- Feeling a sense of personal fulfillment
- Achieving recognition and financial reward
- Generating additional lab, department or centre funding
- Meeting the obligations of a research contract
- Attracting research sponsors
- Creating educational opportunities for students
- Exploring an alternative career to academia
- Potential to discover and lead new research ideas and directions
- Linking students to future job opportunities
Please refer to the following pages for more information on aspects that are relevant for technology commercialisation.
What is intellectual property and who owns the intellectual property I create?
Understand the technology transfer process
The process for technology commercialisation at the University of Melbourne
Intellectual property disclosure
Understand the duty to disclose intellectual property and find out how to disclose your inventions or discoveries
Managing research for effective commercialisation
May I publish the results of my research and still protect the commercial value of my intellectual property?
Yes, but since patent rights are affected by these activities, it is best to submit an Intellectual Property Disclosure form well before communicating or disclosing your intellectual property to people outside the University. There are significant differences between Australia and other countries as to how early publication affects patentability. Once publicly disclosed (published or presented in some form), intellectual property may have restricted or minimal potential for patent protection outside of Australia. Be sure to inform your RIC Business Development Manager of any imminent or prior presentation, lecture, poster, abstract, website description, research proposal submission, dissertation, publication, or other public presentation including the intellectual property.
May I use material or intellectual property from others in my research?
Please refer to the Using intellectual property owned by other parties page.
May I share material, research tools or intellectual property with others to further their research?
Yes. However, it is important to document items that are to be shared with others, and the conditions of use. If you wish to send materials to an outside collaborator, an outgoing Material Transfer Agreement (MTA) must be completed for this purpose. It also may be necessary to have a Confidentiality Agreement completed to protect your research results or intellectual property. Please refer to the MTAs page for more information.
What rights does a research sponsor have to any discoveries associated with my research?
A Research Contract must clearly specify the intellectual property rights of the sponsor. These rights vary widely from one contract to the next. In some cases, the University retains ownership of the intellectual property resulting from sponsored research, and the sponsor has rights to obtain a licence to the defined and expected results of the research in a nominated field. In other cases, research contracts allow the sponsor a limited time to negotiate a licence for any intellectual property developed as the result of the research. Contact TLS for help initiating, understanding, and dealing with research contracts.
What about consulting?
In a typical consultancy by an academic, the academic provides defined, specialist advice to a customer for a fee. Academics considering entering into consultancy agreements must consult with their Department to ensure that the proposed consulting arrangement is consistent with the Departmental and University policies, including those related to IP ownership and use, employment responsibilities, and conflict of interest.
Assessing an IP Disclosure
How does the University assess IP Disclosures?
Business Development Managers and the University’s Technology Licensing Service (TLS), often with the help of creators, examine each IP disclosure to review the novelty, ownership, inventiveness, and enforceability of the IP, protectability and marketability of potential products or services, relationship to related intellectual property, size and growth potential of the relevant market, amount of time and money required for further development, pre-existing rights associated with the intellectual property, the preferences of the creators, and potential competition from other products and technologies. This assessment might also include consideration of whether the IP can be the basis for a new start-up business. Based on this assessment, the TLS Technology Commercialisation Committee makes a recommendation to the University about protection of the IP, and the preferred commercialisation approach.
What happens when TLS recommends not patenting or commercialising the intellectual property?
In many cases, if TLS recommends that the University not proceed with patent protection or commercialisation of the disclosed IP, the Business Development Manager will explain to you, the creator, that this is because the IP needs more development before it is ready for patenting and commercialisation. TLS will usually provide more guidance as to what aspects of the IP require more development to increase its potential for impact, and what funding sources might be available to support this development. TLS and your BDM will work with you during and after this development to reassess the IP and find the best path to impact.
Marketing of a technology
How does the University market my IP?
TLS and the Business Development team use many sources and strategies to identify potential licensees and market IP to them. Often existing relationships of the creators, TLS, and other researchers are useful in marketing IP. Market research can also assist in identifying prospective licensees. We also examine other complementary technologies and agreements to assist our efforts. We use the University's TLS website to describe IP we’re marketing, and we attend conferences and industry events, and make direct contacts. Faculty and Departmental publications and presentations are often excellent marketing tools as well.
Licensees are generally already known to the IP creators. Thus, your research and consulting relationships are often a valuable source for licensees. Our licensees often license more than one technology from the University. We attempt to broaden these relationships through contacts obtained from website inquiries, market research, industry events and the cultivation of existing licensing relationships.
How long does it take to find a potential licensee?
It can take months and sometimes years to locate a potential licensee, depending on the attractiveness of the IP, its stage of development, competing technologies,and the size and stage of development of the market. Most University IP tends to be in the early stage in the development cycle and thus requires substantial commercialisation investment, making it difficult to attract a licensee.
How can I assist in marketing my IP?
Your active involvement will dramatically improve the chances of matching IP to an outside company. Your research and consulting relationships are often helpful in identifying both potential licensees and technology champions within companies. Once interested companies are identified, the IP creator is the best person to describe the details of the IP and its technical advantages. The most successful technology commercialisation results are obtained when the creator and the licensing professional work together as a team to market and promote use of the technology.
Can there be more than one licensee?
Yes, IP can be licensed to multiple licensees, either non-exclusively to several companies or exclusively to several companies, each for a unique field-of-use or certain territories.
What is a licence?
A licence is a permission that the owner or controller of intellectual property (in this case, the University) grants to another party, usually under a written licence agreement.
Licence agreements describe the rights and responsibilities related to the use and exploitation of intellectual property developed at the University. University licence agreements usually stipulate that the licensee must diligently seek to bring the University intellectual property into commercial use for the public good, and provide a reasonable return to the University, in line with the University’s Licensing Principles.
How is a company chosen to be a licensee?
A licensee is chosen based on its ability to commercialise the technology for the benefit of the general public. Sometimes an established company with experience in similar technologies and markets is the best choice. In other cases, the focus and intensity of a start-up company is a better option.
What will I gain if my IP is licensed?
In accordance with University policy, 40% of any net financial return from a licence is provided to University creator(s), as discussed in the Intellectual property page. In addition, creators enjoy the satisfaction of knowing their creations are being deployed for the benefit of the general public. New and enhanced relationships with businesses are another outcome that can augment one’s teaching, research and consulting. In some cases, additional sponsored research may result from the licensee.
What is the relationship between an IP creator and a licensee, and how much of my time will it require?
Most licensees require the active assistance of the IP creator to facilitate their commercialisation efforts, at least at the early stages of development. This can range from infrequent, informal contacts to a more formal consulting relationship. Working with a start-up can require substantially more time, depending on your role in or with the start-up and your continuing role within the University. Often further development work will be contracted back to the IP creator. Your involvement with a start-up is governed by the University’s conflict of interest policies.
During commercialisation of a technology
Most licensees continue to develop a creation to enhance the technology, reduce risk, prove reliability, and satisfy the market requirements for adoption by customers. Depending on the type of product, this might involve additional testing, prototyping for manufacturability, durability and integrity, and further development to improve performance and other characteristics. Documentation for training, installation and marketing is often generated during this phase. Benchmarking tests are often required to demonstrate the advantages of the product or service, and to position the product in the market.
For IP in life sciences, ongoing development might include pre-clinical safety and toxicology testing, and subsequent clinical trials.
What is my role during commercialisation?
Your role can vary depending on your interest and involvement, the interest of the licensee in utilising your services for various assignments, and any sponsored research related to the licence or any personal agreements.
What revenue does the University get if commercialisation is successful?
Most licence agreements have licensing fees that might be very modest, for start-ups or situations in which the value of the licence is deemed to warrant a modest licence fee, or might reach hundreds of thousands of dollars. Royalties on the eventual sales of the products based on the licensed IP can generate similar or greater revenues, although this can take years to occur. Equity, if included in a licence, can yield similar returns, but only if a successful equity liquidation event (public equity offering or a sale of the company) occurs. Most licences do not yield substantial revenues. A recent study of licences at US universities demonstrated that less than 1% of all licences yield over $1 million. However, the University does technology transfer primarily to generate impact and enhance its reputation. For IP creators, too, the rewards of the IP they created reaching the market are often more significant than the financial considerations alone.
What happens to my IP if the licensee’s commercialisation fails?
Licences typically include performance milestones based on the impact and enhancement to the University’s reputation that the licensee achieves. If these milestones are unmet, the University typically has the right to terminate of the licence. This termination allows for subsequent licensing to another business.
TLS is responsible for managing the expenses and revenues associated with the University’s technology agreements. The proceeds received by the University from such agreements, following deduction of expenses incurred by the University, are shared with the creators. In the absence of any other agreement, 20% is retained by the University’s central administration, 40% is distributed to the creator’s faculty, and 40% is distributed to the creators. The principles behind this are described in the Intellectual property page.
What if I receive equity or shares from a company?
University policy is that University creators of IP owned by the University share in any financial reward resulting from the commercialisation of their IP via distribution of 40% of net proceeds obtained by the University, or via the creators taking equity in a company commercialising their IP, but not both. In other words, creators taking equity in a company waive their rights to licence revenue or any other proceeds paid by the company to the University.
What are the tax implications of revenue I receive from the University?
Licence revenues paid to creators are generally taxable as income. Liquidation of equity can also incur capital gains tax. Consult a tax advisor for specific advice.
What if there are multiple IP creators?
The University’s view is that University creators share in the returns according to the contribution they have made to the creation of the IP. This might include contributions that are not recognised in any application for IP protection. Recognition of these contributions, and the allocation and distribution of the proceeds, will be based on the written agreement of all the creators. If the relevant parties do not agree, then these issues may be referred to the creators’ Head of Department and/or to their Faculty’s Dean, and ultimately, if necessary, to the Vice-Chancellor for advice and mediation. In the absence of agreement, the decision of the Vice-Chancellor will be final. More detail is in Section 13— Intellectual Property of the University of Melbourne Statute.
How is equity from a licence distributed?
A licence might carry an equity component, so that the University owns shares or options in the licensee company, particularly with start- up companies. This equity is typically held by the University in a commercialisation trust until a liquidity event occurs – for example, the company is listed on a stock market and the shares sold, or the company is purchased outright by another company – at which point the proceeds are distributed in the same manner as licence revenues. In most such cases, the IP creators have taken personal equity in the company, and so waived their rights to revenue paid by the company to the University, as explained above. In this case, the creators’ share of the proceeds is allocated to Faculty or Faculties in which the creators worked.