At Appleyard Lees, we have extensive experience in helping universities, and their spin-outs, protect their innovations. We work with over 50 universities throughout the UK and Europe, and know how the universities work, and what they need. With that in mind, we are often asked for our general thoughts and guidance on topics surrounding universities and innovation. So, in this introductory article, we take an initial look at some interesting things that we have spotted in this area.

Patents have a purpose

Patents are not an academic exercise. Patents provide universities with a tool for commercialising their cutting-edge research through licence, sale, or enforcement of the patent rights in a court action. Recent examples in the US have shown that getting patent protection for key technologies can result in significant financial benefit.

In February 2016, Carnegie Mellon University settled its patent infringement lawsuit against Marvell Technology Group, a hard-drive manufacturer, for $750 million. While in July of 2017, a US District Judge ordered Apple to pay $506 million to the research arm of the University of Wisconsin as a result of a patent infringement lawsuit. The success is not just limited to the US, and many UK university spin-outs have achieved success. For example Circassia, an Imperial College London spin-out, raised £200 million in its initial public offering. An extensive patent portfolio clearly had a part to play in the raising of this sum.

Are UK universities becoming more patent savvy?

We have seen that universities are now aware of their impact outside of the traditional world of core research and related high-profile publications. Indeed, universities are now often assessed on the basis of such wider impact. In our experience, commercialisation of innovations is now increasingly important, and patents are playing a big part in this. The data appears to back this conclusion.

We have looked into the patent filing trends for a group of major UK universities. As the graph below shows, the number of international Patent Cooperation Treaty (PCT) and European (EP) patent application publications for these UK universities have been steadily increasing.

Unsurprisingly, the EP applications lag behind the PCT applications. Many PCT applications will not enter national/regional phase because either they have a low chance of getting granted or are no longer commercially relevant. Some time ago, it was not unusual for universities to incur the cost and risk of pursuing filings beyond the PCT stage. However, we know from experience that this is now a rare occurrence, unless there is a significant chance of some return on that investment. Typically, filings beyond the PCT stage are left to a related spin-out or commercial partner. Many universities offer the chance to proceed beyond the PCT stage to the inventors themselves, if there is insufficient commercial interest from the perspective of the university. The number of EP applications does, however, closely follow the number of PCT applications, which suggests that Europe is a major destination for our group of UK universities if and when filings are pursued.

What technologies are universities protecting?

For the UK universities we considered, the top technology areas protected via EP patent filings relate to medical or veterinary science (including medical devices and medicinal preparations), the general area of measuring instruments, organic chemistry, and biochemistry. The below chart shows data for EP filings over the last six years.

While the number of patent applications filed by universities has increased dramatically, the patent applications are still predominantly focussed on the same technological areas as they have been in the past, as shown in the comparative data for EP filings made 3-4 decades ago.

This could perhaps be viewed as surprising, with the recent and rapid changes in technology. It will be intriguing to see if this changes, and how quickly, as advanced research centres come online and develop, and as pressure for universities and third parties to interact and benefit from one another increases.

In particular, we would expect a relative increase in filings in the area of computing (e.g. AI, machine learning, big data etc.), where many universities are undertaking significant, world-leading research.

Continuing trend?

While not every patent will result in a $750 million payoff, it is encouraging to see that UK universities are increasing their efforts to protect their innovations. It will be interesting to see if filing numbers continue to rise, or if equilibrium is reached.

While budgets are being squeezed, we have noted that universities are becoming savvier in terms of initial and overseas filings and related prosecution when it comes to managing their patent spend. Universities are using more creative strategies when it comes to managing budgets in this area. For example, many universities now have cut-off periods at which point funding for existing national filings is stopped or curtailed. Some universities have systems whereby inventions are ranked prior to filing, and a filing strategy adopted to fit that rank.

All considered, our thoughts are that the pressure for more commercial impact from research will grow, to the extent that we expect filings to continue to rise for at least the foreseeable future. We will look to re-visit some of these and related topics in more detail, in future. If you have a topic of interest that you would like us to explore, please do get in touch.