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KEF - A Useful Framework or Another Restriction?

on Friday, 16 March 2018.

In October 2017, the Universities and Science Minister announced the launch of a new Knowledge Exchange Framework (KEF), to operate alongside the existing Research Excellence Framework (REF) and Teaching Excellence Framework (TEF).

Background

University research outcomes have been the subject of review for many years, eg through the HE-BCI return and HESA reports. There have also been a number of wide-ranging reviews including the Witty Review (2013), the Dowling Review (2015) and more recently the McMillan Report (2016). 

The McMillan Report followed a government request to HEFCE to develop a university knowledge transfer performance framework. Led by Professor Trevor McMillan (Vice-Chancellor of Keele University) the report focused on the exploitation of intellectual property arising from university research, examining best practice, key performance improvement issues and international comparisons. 

The report’s findings were that vast differences between universities (what they do and how) means that there is no safe 'one-size-fits-all' approach to measuring knowledge transfer performance. UK universities are operating at a 'world-class standard' for technology transfer practice. However, there was recognition of the value of building eco-systems around universities to aid knowledge transfer, including securing "patient" capital in support of nascent technology businesses.

You Get What You Measure

The KEF is being signposted as a means for universities to reflect on their performance in knowledge exchange and raise their game. It may also lead to a shift towards commercialisation activities, especially in engineering, medicine, technology and science, where outputs are arguably easier to measure. Access to Higher Education Innovation Funding will be linked to positive feedback on KEF returns which will be particularly important for universities with a focus on the arts and humanities. 

There are concerns that the KEF should avoid measuring outputs too prescriptively, potentially creating perverse incentives. The REF has already been attacked for some of its performance measures, with critics arguing that it negatively distorts research behaviour. 

What Could You Consider Now?

While we await further announcements on the KEF, universities could consider the measures below.

A Fit-for-Purpose Technology Transfer Policy

We often find that the absence, or under-development, of university technology transfer policies generates uncertainty and causes delays. Sometimes this can lead to academic parties developing unrealistic expectations, or impairing the ability of universities to fulfil their governance and legal obligations – in particular to ensure that they:

  • receive fair value as charitable bodies, in return for the transfer of intellectual property rights and assets to private sector partners
  • meet complex state aid requirements

Having comprehensive guidelines for the commercialisation process allows a university to communicate clearly and consistently with its academics, other spin-out participants and prospective funders. This clarity enables everyone involved to identify the feasibility of proposals at an early stage, how best to structure them and what to expect personally from the arrangements. 

These guidelines can also help academics and technology transfer teams develop their understanding of the legal challenges of research commercialisation. For example, participants might identify their shareholdings in a spin-out company as the key driver of their level of control and share of commercialisation proceeds. In fact, minority shareholders can still exert significant control through a shareholder agreement. Revenues can be generated through an intellectual property transfer agreement by way of licence fees and royalties, as an alternative to depending on share dividends from retained profits. 

Template Contracts…

High on the list of complaints from industry and academic quarters is the difficulty of, and time taken in, sorting out legal structures and contractual terms with partners. Universities engaging actively in research collaborations, or facing the prospect of launching a number of spin-outs, can adopt template contracts which reflect their published technology transfer policies. This gives a better prospect of consistency between transactions and should reduce cost and time overall in negotiating deals. 

... Deployed in a Pragmatic Way

Whilst advising higher education institutions on these matters we have encountered problems with technology transfer professionals taking a rigid and prescriptive approach to contractual negotiations, unwilling to adapt standard contracts ill-fitted for the requirements of an 'out of the ordinary' commercialisation project. This can add unnecessary delays and costs to the process and damage goodwill between the partners. University technology transfer teams need to develop the confidence to consider alternatives and bespoke solutions in order to get deals done efficiently, whilst still protecting the interests of their university. 

Long-Term Collaborations 

Another way of reducing the time and cost of negotiating technology transfer arrangements is to form long-term partnerships with key industrial and academic partners. Operating within an agreed framework on a series of related projects in a specialist field of research or technology will reduce the 'drag' associated with contract negotiation, ensure consistency of approach, greater certainty, and help to build trust between partners.

Training for Staff

Academic and other staff can be supported in developing their understanding of the commercialisation process, and their role in it, through their university providing training materials and courses. They can also be supported in preserving the value of university intellectual property assets through balanced publication policies. 


For more information please contact our Commercial Law team on 0121 227 3708.

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