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Piet Barnard and Dr. Andrew Bailey

Piet Barnard, Director, Research Contracts and Intellectual Property Services, UCT and Dr. Andrew Bailey, Intellectual Property Manager, Research Contracts and Intellectual Property Services, UCT

Sable’s Dave Kitley met with Piet Barnard and Dr. Andrew Bailey from UCT’s Technology Transfer Office, known as ‘Research Contracts and Intellectual Property Services,’ to discover why the University is recognized as one of the national leaders in enabling technology transfer and IP commercialization among higher education institutions. The interview reveals key initiatives taken by the University to encourage the commercialization of IP, the challenges the University faces in the current technology transfer environment and critical factors required to help drive the growth of the sector.

Dave Kitley: Can you describe the role of the Research Contracts and IP Services team at UCT’s Technology Transfer Office?

Piet and Andrew: The Research Contracts & Intellectual Property Services (RCIPS) role is to receive disclosures of inventions, evaluate their commercial merit, protect the intellectual property and in collaboration with the inventors, market and license the technology, or create spin-off companies. RCIPS also supports UCT’s research activities by centrally managing, authorizing and negotiating research contracts entered into with our wide variety of funders.

Can you provide a high-level description of your success to date and your overarching model?

UCT can be characterized as one of the better performing Universities in South Africa and Africa, mainly because we’ve have been around longer than others. Others that’s been around for as long or longer that our Office e.g. North West, Stellenbosch are by all accounts also doing well and then there is also up and coming institutions such as Nelson Mandela Metropolitan University (NMMU). Different Universities have different structures. Stellenbosch have set-up a separate company that manages IP and incubates spin-outs. Various models can be applied as the IPR Act and the national organizations aren’t prescriptive on this. The UCT office has not break even yet, based on key ratio’s and benchmarks we are performing and commercializing according to global averages based on the research funding coming into the university.

What are some of the key differences between global best practice and its application in South Africa?

Differences between the American and RSA environment include:

External Research Funding: IPR Act and Exchange control regulations (external investor set-up) compared to American equivalent, Bayh-Dole, which tends to be slightly different yet has similar nuances. RSA Government is an unknown entity in terms of walk-in rights that are granted by the IPR Act and the walk-in rights are broader than in the US. For international funders, however it’s not easy to export final IP generated.
Start-up capital: American VCs are happy to invest in companies with licensed IP, however South African VCs also do not have appetite for University startups based on early-stage technology. In South Africa, investors wish to see the IP assigned to the spin out companies and the inventor participating full-time in it. The Innovation Fund previous funded early-stage development and projects could be run within a university, without the need for company formation. The TIA, formed from a number of entities, such as the Innovation Fund and Biotechnology Regional Innovation Centers (BRICs) now funds further down the innovation chain, leaving a gap where the Innovation Fund was previously active. The bar is raised further by the need for universities to co-invest at 20%, which typically means that the university has to find an additional funder / Angel. Funding in these critical early stages and sometimes conflicting policies, means South Africa is not maturing its opportunities in line with what’s happening globally.

How is UCT addressing this funding gap?

We have formed a small pre-seed fund, for which the university annual grants R500k, to develop research and products through the required maturities and milestones in project and product development. Investment in projects occurs at two levels: R20k and R100k. We are also fundraising to establish the ‘Evergreen Fund’ for investments of between R500k and R1.5m per project.

What is your opinion on the state of technology transfer and the commercialization of IP across the country?

We see three main challenges in South Africa Technology Transfer: Financing, Incentives for the researchers and the skills within the offices to commercialize deals effectively.

We find that not all researchers have bought into the notion of technology transfer and commercialization initiatives. This could be largely due to the culture of institutions, and the prioritization of publishing in international journals to increase the reputation of the researcher and improve further funding opportunities. Having successful examples of commercialization helps change this mindset though –as has been seen in some Departments.

The American VC industry appears to be far more risk-taking than the South African counterparts. Finally there is a skills and capacity shortage in the respective TTO offices, impacting on the ability to advise researchers appropriately.

How are private players, like Business Incubators, assisting or competing with the work you do?

These are not competing with us and we don’t see them as problematic either. Private business incubators, bridging finance, etc. are great with assisting us achieve our intentions. The issue does come in when they want exclusivity, and want to have first right to deals. From a university perspective this is problematic and not possible, as the University needs to maintain its freedom to assess the best opportunity for a specific case. The terms of these funders/investors are often onerous.

What is UCT doing differently to other Universities? Can you tell us more about the Scout initiative you are running?

It is difficult to pinpoint what we do differently and whether what we are doing is actually the best way of doing things. I think our structure of having the IP Section & Contracts (legal) Section in one Office is relatively unique.

We have trialed the IP Scout initiative a few years back – with some success. With financial assistance from NIPMO, UCT are re-introducing and expanding this initiative. These scouts, depending on tenure, are possibly retired experts in their area of expertise, who have relationships in the academic and industry world, and can advise the researchers in a confidential manner on the options available them. We have found that some researchers don’t wish to approach our office, so we have a scout walk the corridors, sit in meetings, who raises awareness and increases our knowledge of the different departments and what they are doing, and also not in certain instances.

Knowing the capacity and capability challenge TTO’s are experiencing across the country, do you feel that a ‘hub-and-spoke’ type model would be more beneficial where a top University like UCT could nurture those with less TTO Human Capital?

It is too difficult to nurture other universities, mainly due to geographical and cultural issues. Different Universities have different styles and relationships, creating biases at times. However by region there is a good argument for it and this seems to be working well in the Eastern Cape. However there is always the question around prioritization and allocation of resources. It is ideal for newer offices where there are institutions with low levels of invention disclosure, where a dedicated TTO could not be justified.

How is UCT enabling ‘spinouts’ or ‘start-ups’?

We have achieved 12 Start-ups to date, where some of these have been incubated on campus. Where we provide access to technology, space and infrastructure we may provide preferential rates and IP management, according to the differing needs. Where IP is registered, UCT pay for the patenting process and will offer the IP to the start-up by means of once-off fees or in return for equity; in early-stage start-ups UCT may continue to support patenting expenditure, which is recognized as a shareholder loan. Depending on the need we may assist with business plans, but encourage the start-ups to do these where possible.

What is your view on the funding gap and what is the impact on entrepreneurship?

There is very little if any funds in the R500 000 to R2m bracket available to develop research and products and do proof of concepts . Many of universities’ innovations are still at the early stage and need development before it is ‘ripe’ enough to qualify for funding from institutions like IDC, TIA as well as VCs.

Previously the Innovation Fund has funded ‘university –based’ projects, but now under the TIA regime spin-outs needs basically to be formed to access funding. Similarly IDC only invest in companies. In many cases the technology is not mature enough to warrant a spin-out company. Another problem is that a funder like TIA requires co-funding from institutions – money we obviously don’t have.

An additional issue is that VC’s in RSA are more interested in the ICT space due to the short-term benefits these are providing. Technology transfer, patenting and licensing, especially in biotech is more of a long-term game.

What are some of the challengers being experienced by researchers?

There are a number of conflicting priorities for researchers. They are responsible for educating students as a primary, and universities are increasing their intake of students, requiring additional classes and time to administer. Secondly, they are required to conduct relevant and dynamic research for undergraduate and PhD students. Commercializing is just the next step in the process however having numerous responsibilities can raise increasing pressures. In terms of incentives, these are still largely focused on publications, student throughput and research, prioritizing these over commercialization.

We are looking at different mechanisms and understanding the desired target audience, this includes how do we incentivize researchers or post doctoral students.

What do you see as critical factors that will help drive technology transfer growth and success?

Simply put: Easier access to funding and skills will aid in enabling success. However, we need to ensure we achieve success with what we have available, as this helps build case studies and momentum, providing us with the case to request more assistance. We are looking for key experience, from both the academic and industry perspective, within fields of R&D and Business Development. Business Development is extremely important with improving industry relationships and aids with guiding research to align to these.

Can you describe Entrepreneurship at the University?

There is a lot happening on campus that is being driven from the bottom-up. Students are identifying opportunities. Incubators are noticing gaps in the services being offered by the University and are looking at filling these. Examples include: Entrepreneurship Societies, Incubators like Bandwith Barn opening up an office on campus.

To cater to this interest, we are also increasing the amount of classes targeting entrepreneurship and innovation, and offering these to more science students to make them aware of the possibilities down the line in their career. A review of entrepreneurship training at UCT has recently been completed across all faculties with the aim of understanding potential synergies and coordinating the activities.

How can the private sector help?

Piet and Andrew: There are a number of ideas being put forward. Some of them are:

Increase the amount of symposiums between academics and industry and across departments to enhance collaboration
Target knowledge centers like the Innovation Hub to use Universities to solve key industry Solutions. This in turn helps sparking innovation in researching and commercializing IP
IP roadshows to make industry aware of our inventory and research being carried out
Collaboration between Universities, Industry and Funding Institutions to focus the research being targeted and increase the number of relevant innovation outputs

About Piet Barnard and Dr. Andrew Bailey

Piet Barnard: Director of Research Contracts & Intellectual Property Services in 2006. Before joining UCT he worked at Somchem, a division of Denel, in a number of technology development and research & project management roles.

Piet has a broad background with a B.Sc in physical science, M.Sc in Chemistry and a MBA. In 2003 he was fortunate to spend three months at the University of Queen's in Belfast as a Commonwealth Professional Fellow.

Dr Andrew Bailey: Andrew returned to his alma mater in 2007 to join RCIPS, having worked at Mintek, AECI and the CSIR in a number of technology development and research management roles in the biomining, fermentation, bioprocessing and food fields. This often involved techno-economic feasibility studies, project management and the development of business plans for late-stage/pilot-scale research and development projects approaching commercialization, as well as trouble-shooting for commercial operations. After completing a Programme in Financial Management, he also worked for the Dialogue Group that gave him valuable experience in sales and marketing, especially interacting with clients in the UK and USA in the financial services sector. Andrew has a PhD in Chemical Engineering from UCT and is a member of the Association of University Technology Managers (AUTM), the Licensing Executives Society (LES), International Society for Professional Innovation Management (ISPIM) and the Southern African Research and Innovation Managers Association (SARIMA) where he is an Executive Committee member.

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