(UK) Universities' IP and Spinout Policies

Yesterday, I virtually attended a half-day conference organised by the UCL Institute of Brand and Innovation Law (IBIL), looking at IP and spin-out policies of universities and how this is evolving. 

The conference was enlightening and informative, and I will highlight a few points I found of particular interest.  As someone who advises many UK universities on securing IP, I was not at all surprised to hear that, while one would expect the ultimate goal to be similar across the universities, there is still a significant degree of divergence in terms of how this may be delivered. This was nicely illustrated by looking at the total number of terms universities use to define IP, as well as the length of their published IP policies. With respect to the number of terms defining IP, this varied from zero to 22 and the length of university IP polices varied from 3 pages to 71 pages. Although the data was anonymized, it would be interesting to analyse which universities fell at the extremes and perhaps understand the reasons behind this.   

Another area where there was significant divergence was with respect to any revenue sharing arising from IP commercialisation. While all universities reward IP creators, there is a clear disparity when it comes to benefiting the creators' department(s), the university and/or the technology transfer office (TTO). Whether there will be any harmonisation in the future remains to be seen.

When it comes to spin-out formation and universities taking equity in the spin-out, this was also shown to be highly divergent. However, given the complexities of each particular situation and the factors that come into play, it does not seem unreasonable that many universities argue that one size does not fit all and that the amount of equity stake can and should vary from case to case. Nevertheless, many universities appear to be adopting a maximum equity stake, approaching the recommendation put forward in the University Spin-out investment terms (USIT) guide published in 2023. I say “approaching” as the majority are still above the maximum recommended amount of 20%, but there does appear to be a general desire to reduce the total amount of equity taken by a university. Given that the investor community wants to see universities taking less equity in their spin-outs, this will hopefully be looked upon favorably by potential investors. Moreover, it was pointed out that many universities are willing to negotiate when it comes to equity holdings and their published equity stakes are identified as maximums that may be reduced depending on the particular situation.

You may have noticed that the title of this piece puts UK in parentheses. The conference was identified as relating to UK universities. Whilst I do not wish to be critical in any way, it is relevant to point out that all the data was obtained from universities in England and did not include data from universities in Scotland, Wales, and/or Northern Ireland. I am not sure why the analysis was limited only to English universities (my bad, I should have posted an online question at the time), but perhaps the sheer amount of data was simply too much to include universities from the other devolved nations. Nevertheless, it would certainly be interesting to see if the universities in Scotland, Wales and/or Northern Ireland are equally varied in their approach, or if there are any areas of harmonisation. 

From my experiences working with universities, I find each university to be slightly different in their approach to handling IP and the data presented at the conference would appear to bear this out. Whilst I am sure investors would wish to see a commonality of approach, I believe a degree of variation is inevitable. As individuals, we may display some similarities, but ultimately we are all unique. Surely, one cannot expect universities to be any different.