We have all seen the headlines – Australia is one of the lowest R&D-funded OECD countries, coming in below 1.6 per cent of GDP and falling, more than a full percentage point below the OECD average. Although the federal government’s Future Made in Australia initiative (FMiA), has earmarked $22 billion for investment, the Industry department’s science, research and innovation (SRI) budget tables for last year highlight a trend that should cause pause for FMiA.
Out of the $12.6 billion in R&D funding last year, only $3.4 billion (roughly 25 per cent) went towards business research activities via the R&D tax incentive scheme. The remainder of the funding was earmarked for research organisations such as the CSIRO, universities and centres of excellence, as well as industry, but the lion’s share went to institutions.
Although this is not necessarily a bad thing, a healthy balance between fundamental research and innovative, commercialisable research is needed. To stimulate a rise in productivity, growth in GDP, a return of investment capital, and an increase in manufacturing, more research needs to progress to market, translating ideas into tangible products and services. This can be envisioned through the innovation life cycle stages:
- Ideation – basic research and conceptualisation (initial proof of concept)
- Project selection or screening – where business opportunities, costs and resource availability dictate project advancement
- Experimentation and product development – prototyping, pilot plant scaling, and manufacturing optimisation
- Commercialisation/licensing
Universities mostly do the first stage well, but the other stages poorly, if at all. This is not an indictment of the Australian university system, but of the global university system. MIT is one of the most prolific patent filing and research-funded institutions in the United States or anywhere, for that matter. Ironically, of the diverse patent portfolio MIT has, less than six per cent of their patents reach the market. This includes licensing arrangements with other companies.
On the other hand, industry thinks it does R&D, but it is predominantly product development. Product development is typically customer-specific, rarely involves patent filing, and its timeframe is months rather than years. Yes, there are always exceptions to the rule, and more and more companies are driving innovation, but the funding numbers paint a holistic picture – industry as a whole is not spending long-term funds for disruptive research. So, while industry does stage one poorly, they conduct stages three and four well.
The gap lies in screening the innovation stage (usually research derived from university institutions) and research funding to develop into commercial products (typically scale-up and product development).
Universities are not equipped to sell and market their research developments and patent portfolios to industry. Most industrial companies do not have the time to search every Australian university for their intellectual property (IP). Also, most information available on patent search engines is limited. For example, in Australia, only the applicant(s) and title of provisional patent applications are disclosed. Typically the title is generic, for instance “composition”, and no details of the encompassed invention are revealed.
In 2020, Australian universities and research institutions accounted for 14 of the top 20 Patent Cooperation Treaty (PCT) filing applicants, and the Group of Eight universities accounted for 56 per cent of all patents in 2019, even more than the CSIRO. How can all these patents, from all these institutions, across all the research sectors be evaluated for commercialisation potential?
A centralised, searchable patent database would expedite the commercialisation of research and allow industry to develop better relationships with universities. Such a system would permit industry to engage with universities sooner, facilitate tech transfer early in the development cycle, providing a pathway to patent protection, and be useful for researchers to engage in collaboration. It would also streamline grant funding.
The centralised database would ideally include published patent specifications and details, limited as required by applicants, which are yet to be published.
There are multiple prosecution options for obtaining a patent, most applicants, including universities, will initially file a provisional patent application. These are not published. The filing date of this provisional patent application is the priority date. Only limited details appear on a patent register. An applicant has 12 months to decide whether to continue with the application. If so, they will then file a complete application, which is the application that will potentially be examined by a national patent office to determine whether it meets legislative requirements for a patent to be granted.
Patent applications are usually published 18 months from the priority date. This means that an applicant must have committed to the filing of a complete application, and the potential costs entailed.
Most patent filings by universities are dropped at the provisional file. There are many reasons for this, such as further research has shown that examination will be difficult, and the overall scope of protection afforded by a granted patent will be of limited or negligible commercial value. Other factors include limited finances and internal requirements to identify potential partners or licensees at a very early stage after the priority date.
While many universities would want to limit the information revealed before the standard 18-month publication date, to capture the interest of potential partners or licensees, especially before the complete filing deadline, a centralised IP database becomes a powerful tool. Universities, and other research institutions, could provide at least a generalised scope of any filed provisional application. This could then open inquiries, with further details being provided with appropriate safeguards, such as non-disclosure agreements in place, before any transfer of information.
All of these could aid in the technology transfer to industry, driving commercialisation of R&D funding, providing another point of contact between industry and academia, and increasing the productivity potential of Australia.
Dr Tony Granville is the innovation manager for Harrison SPARC, an innovation research hub for the Harrison Group. He joined when the company was formed in 2021. It was spun out from Harrison Manufacturing where Dr Granville led its R&D division. His expertise spans the R&D of green chemistries in the energy and water treatment sectors, their scale-up and optimisation, and transfer to large-scale production and commercialisation.
Dr Andrew Gregory is a partner in the FB Rice chemistry team. A registered Australian and New Zealand patent attorney, his practice spans prosecution, coordinating patent portfolios, oppositions, searching and freedom-to-operate opinions, drafting, and strategic advisory services. His client base covers universities to global companies in a range of technological areas including pharmaceuticals, materials and nanotechnology, and green technology.
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