Federal Partners in Technology Transfer: Past, Present and Future

• Introduction
• Background
• What has FPTT accomplished?
• Measuring the impact of the government's technology transfer activities
• FPTT in the 21st century
• Glossary of terms

(FPTT would like to extend special thanks to Keith Belinko for his assistance in preparing this report.)

---

INTRODUCTION

Federal departments serve their public good mandate in a variety of ways and government research organizations are no exception. Although their primary role is to advance the state of knowledge and to disseminate a broad spectrum of public information in such areas as health, safety and the environment, increasingly, technologies developed by federal research organizations are transferred to the private sector for commercial exploitation, leading to the creation of wealth, jobs and other social benefits. The contribution made by government research organizations through their technology transfer activities to the socio-economic wellbeing of Canada ranges from providing direct technical support to Canadian companies to developing environmental solutions, introducing new industrial processes and procedures, and creating new companies. By working in close partnership with both public and private sector organizations, government research organizations have gained a reputation for being important contributors to the Canadian Innovation System.

During the past several years, a consortium of government research organizations from science-based departments and agencies (SBDAs) has enhanced the way technology transfer is carried out in the federal government. Initially called the Interdepartmental Group on Intellectual Property Management (or IP Group), and subsequently, the Federal Partners in Technology Transfer (FPTT), this consortium has been instrumental in establishing common practices and approaches to technology transfer. The group has also guided the development of S& T policy in the areas of intellectual property management and technology transfer. Working as an advocate of SBDAs, FPTT has become a recognized institution, both nationally and internationally, for promoting best practices in technology transfer and fostering the development of professional capacity in technology transfer and commercialization.

As FPTT moves into the 21st century, it will reinforce its linkages with like organizations in both the public and private sectors, establishing itself as a leader in matters pertaining to intellectual property management and technology transfer. Technology transfer will be viewed in its broadest context, to capture the total contribution of government research organizations in their many different facets.

Back to top

BACKGROUND

The dissolution of Canadian Patent and Development Limited (CPDL) in the late 1980s presented special challenges for government research organizations. CPDL had been established in the 40s as the technology transfer arm of the federal government. Prior to 1990, inventions conceived by federal government researchers were transferred to CPDL for processing. CPDL was responsible for assessing the patentability of the inventions and for licensing the arising intellectual property. CPDL eventually was deemed to be a poor model for technology transfer, since it created a divide between the creators and the managers of the intellectual property.

Government researchers were required to transfer inventions to CPDL without having the opportunity to take an active role in the management or exploitation of the ensuing intellectual property. Once a patent was issued, or royalties received from licensing of the intellectual property, CPDL would issue a monetary award to the "inventor( s)" who then had no further involvement in the transfer of the technology to industry. There was little incentive for government researchers to be involved in the exploitation of the intellectual property; and they moved on to the next research project without maximizing the impact of their previous project( s). The dissolution of CPDL also meant SBDAs had to establish their own infrastructure and protocols for protecting, managing and exploiting their intellectual property. This was a daunting task since the culture within SBDAs called for broad dissemination rather than commercial exploitation of knowledge - the latter having historically been CPDL's responsibility.

In 1989, as a result of CPDL's dissolution, a number of managers from SBDAs, who were already involved in technology transfer activities through their participation in the IRAP-R Program, joined forces to create the Interdepartmental Group on Intellectual Property Management (or the IP Group). This Group was strictly a voluntary organization with no official mandate but it did bring together individuals from within SBDAs who had assumed CPDL's responsibilities for managing their departmental IP. The IP Group was instrumental in helping SBDAs assume this new role by promoting common approaches and practices for the management of IP and by organizing training sessions for researchers and technology transfer practitioners. Working closely with Industry Canada, the IP Group also played a key role in influencing policies affecting the management of IP.

In 1995, the IP Group broadened its focus from intellectual property management to technology transfer and became known as the Federal Partners in Technology Transfer (FPTT). Since assuming this new role, FPTT has contributed significantly both to the development and promotion of best practices in technology transfer both within and outside the federal government and to the knowledge base of those involved in the technology transfer process. This report documents some of the many contributions made by both the IP Group and FPTT in helping SBDAs assume the responsibilities once held by CPDL.

Back to top

WHAT HAS FPTT ACCOMPLISHED?

SBDAs within the federal government began to establish technology transfer offices soon after the closure of CPDL. Today these offices range from one-or two-person-year operations, to the National Research Council's Intellectual Property Office that houses patent agents and technology transfer officers who serve not only the technology transfer needs of the NRC but also those of several other government departments.

Left alone, each SBDA ran the risk of establishing its own version of a technology transfer office with differing practices and approaches. This would have meant that a company dealing with more than one government department would have been subjected to differing policies with regard to technology transfer . Today , because FPTT serves as a forum for technology transfer officers and others to share information and adopt common practices and approaches, a company working with Natural Resources Canada on a research project is assured of receiving similar treatment from Environment Canada or the National Research Council.

The IP Group and FPTT have also been instrumental in introducing S& T policies that greatly help departments better manage their technology transfer activities. For example, in the mid-90s, working with Industry Canada, the IP Group helped introduce two landmark policies. The first allowed government departments to retain 100% of the royalties received from licensing of technologies. (Prior to the introduction of this policy, royalties went to the Consolidated Revenue Fund, and departments had to use their A-base funding to support technology transfer activities.) This policy enabled departments to use the revenues to expand their technology transfer activities. The second policy dealt with expanding the Public Servants Inventors Awards program to include innovators (i. e., individuals who not only conceive the original invention but also those who contributed to its commercialization). This provided an incentive for federal employees to take a more active role in the commercialization process, thereby, improving the probability of success.

As well, FPTT took an active role in the development of the Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts. The policy removes the automatic Crown ownership provision that previously existed with government contracts and gives contractors far greater access to the intellectual property. Thanks to FPTT, the policy also ensures that government departments can retain control of the intellectual property under certain critical conditions.

Commercializing scientific research is a complex business requiring skilled professionals. FPTT, whose mandate is to increase the professional capacity of those involved in technology transfer and commercialization in the federal government, organizes an annual conference as well as workshops and training programs throughout the year aimed at individuals from government, universities and private sector organizations. These events have been very well attended and have received considerable praise from participants and others. FPTT also maintains a unique inventory of training available in Canada and in the United States. The FPTT members' website provides easy access to selected sites and information on technology transfer world wide.

FPTT has taken an active role in enhancing the publics'understanding of and access to federal research programs. Its website promotes the expertise of over 110 federal research organizations located throughout the country. FPTT also has been instrumental in recognizing and promoting the excellence of federal research through its Annual Awards Program and a poster entitled A Century of Innovation - Federal Labs at Work.

Back to top

MEASURING THE IMPACT OF THE GOVERNMENT'S TECHNOLOGY TRANSFER ACTIVITIES

If the impact of the government's technology transfer activities were simply measured in terms of economic benefits, it would likely be in the billion of dollars. However, the impact extends well beyond economic benefits. Government research organizations have a longstanding record of being active partners of industry and other public institutions (e. g., universities, provincial research organizations, hospitals and colleges), working with individual companies or consortia of companies on a multitude of research projects. The objectives of these partnerships have consistently been to advance the state of knowledge, contribute to wealth and job creation, and improve the quality of life for Canadians.

Most of the research is carried out through collaborative arrangements where each partner contributes monetarily or in-kind towards solving a technological problem or developing a new technology. As well, government research organizations have a mandate to work on next-generation technologies, often using their own A-base funding. These technologies are ultimately transferred to industry for commercial exploitation through licensing agreements and, more recently, through successful spin-off companies. Incubation facilities are also springing up in various SBDAs. Collectively, these activities have contributed significantly to economic growth and job creation.

But by far the greatest contribution of government research organizations has been towards generating social benefits. Whether protecting the health and safety of Canadians, or caring for the environment, government research organizations transfer a wealth of knowledge and technologies either through broad public dissemination or to specific sectors of the economy, such as the oil and gas industry, the food and agricultural sector and the telecommunications industry to name just a few. This form of technology transfer is not easily quantifiable since it contributes to saving lives, averting environment disasters or promoting health and safety standards. None-the-less, without the benefits derived from these types of technology transfer activities, Canada's high standard and quality of life would be jeopardized.

FPTT has played the role of a catalyst in bringing federal departments together to identify opportunities for bundling technologies, to work with common partners and to identify prospective licensees. It has served as an excellent forum for featuring technologies that have been developed across the federal government, drawing representatives from both the public and private sectors to exchange information and best practices.

In 1996, FPTT launched the R& D Impact Network. Working through the Conference Board of Canada, the R& D Impact Network brought together representatives from industry, universities and governments to establish best practices in measuring the impact of R& D and technology transfer. Increasingly, government research organizations have been using quantifiable measures to report on the impact of their technology transfer activities, thereby demonstrating that their contribution to the economy and society far outweighs the funding they receive.

Back to top

FPTT IN THE 21 ST CENTURY

In today's global knowledge-based economy, technological innovation is the fuel for Canada's economic growth and social well-being. Government research organizations have highly qualified personnel and perform world-class research. In order to reach their full potential, they must generate and exploit innovations from their research results. To achieve this, they must increasingly manage their intellectual property as strategic national assets. This comes at a time when the pace of technological development is increasingly rapid and the nature of intellectual property is evolving dramatically. (For example, patent protection in some fields has already become obsolete, with the lifetime of a new technology being shorter than the time it takes to apply for a patent. As well, the traditional way of looking at copyright has been shattered with the advent of e-commerce and the proliferation of information on the Internet.)

With a decade of experience and many successes to its name, FPTT has gained the credibility to lead a national network of technology transfer organizations. By expanding its current role, FPTT can bring together government, universities and industry to improve the system of innovation in Canada. This would fill a critical gap, allowing FPTT to play a key role in strengthening the linkages between government research organizations and industry, as well as with other public sector research organizations including universities, colleges, hospitals and provincial research groups.

FPTT is also well positioned to establish itself as a center of expertise in intellectual property management and technology transfer. By acquiring qualified personnel, FPTT would have the critical mass to offer a wide range of services to both public and private sector organizations. Such a center would not only serve the ongoing needs of federal government departments, but would also provide a broad range of advisory services to the many Canadian SMEs that do not have the capability or resources to manage and exploit their intellectual property to the fullest extent possible.

In the U. S., legislation has been the preferred tool for creating the proper climate for technology transfer from government research organizations to the private sector. As early as 1980, the Stevenson-Wydler Technology Innovation Act required government research organizations to establish an Office of Research and Technology Application to facilitate technology transfer. According to the Act, federal agencies were required to earmark 0.5% of their R& D budget to support technology transfer activities. The Federal Technology Transfer Act of 1986 amended the Stevenson-Wydler Act to encourage collaboration between government research organizations and other R& D performers in the public and private sectors.

This Act was also instrumental in the creation of the Federal Laboratory Consortium, an organization similar to FPTT, but with a dedicated budget and a clear mandate. Several other related Acts have been introduced in the U. S., including the Technology Transfer Commercialization Act of 1999 to improve government research organizations' ability to license federally owned inventions, including the issuance of exclusive or partially exclusive licenses.

The decision to enact legislation dealing with technology transfer in Canada rests at the political level. In the absence of such legislation, FPTT will continue to work effectively with SBDAs in ensuring that common approaches and practices are adopted across the government. As well, FPTT will continue to play a key role in avoiding duplication of effort across government, by serving as a forum for exchanging information and best practices. However, should the decision be made to enact Canadian legislation dealing with technology transfer, FPTT will be in an excellent position to contribute towards the development of such legislation.

Back to top

GLOSSARY OF TERMS

Basic Research:

Its objective is advancing the state of knowledge in a particular field. Its short-term benefits are generally not obvious, but its long-term benefits may be profound.

Government Research organizations:

Within each federal science based department and agency, there exist institutions that carry out R& D in support of government policy. For the purpose of this report, these institutions are referred to as government research organizations.

FPTT:

Federal Partners in Technology Transfer, an organization created in 1995 to promote the transfer of technologies from government research organizations.

Innovation:

The introduction of something new or different. Innovations unlike inventions occur with the introduction of the new technology into use, not upon its conception. For the purpose of this report, innovation is the process of bringing new products or processes to market.

Innovation System:

A network of institutions in the public and private sectors whose activities and interactions initiate, adapt and/ or adopt new technologies for economic or social gains.

Intellectual Property (IP):

Includes inventions; computer software and databases; literary, artistic, dramatic or musical works, books and papers; educational materials; industrial designs; trademarks; integrated circuit topographies; and new plant varieties.

Invention:

The conception of a new idea or apparatus that may or may not be protected by a patent.

IP Group:

The Interdepartmental Group on Intellectual Property Management (also known as the "Belinko" Committee) formed in 1990 to help SBDAs cope with the dissolution of Canadian Patent Development Limited. FPTT evolved from the IP Group.

Licence:

An agreement used to transfer a technology from a government department to an industrial client for commercial exploitation. The client is given access to the intellectual property for a fee or other considerations.

Research Project:

Research directed at solving a technological problem or contributing to the pool of existing knowledge. In this report, its context is defined more by an area of industrial activity, and research may involve more than one discipline. A research project generally results in the creation of intellectual property with direct social or economic value.

Royalties:

Income generated from licensing of intellectual property. According to policy introduced in 1995, government departments can retain 100% of the royalties to be used in support of technology transfer activities.

SBDA:

A science-based department or agency of the federal government.

Spin-Off Company:

A new company created specifically to commercially exploit a government-developed technology. The spin-off company must license the technology from the originating department.