MPs call UKRI’s IP policy “far too cautious”
When the House of Commons Public Accounts Committee took evidence from Ian Chapman in June as part of its inquiry into UK research infrastructure, the UKRI chief executive told them that it was “worth us looking again” at intellectual property terms and conditions:
“UKRI’s terms and conditions are more liberal than those of other public investors – say, ARIA, the NIHR, or other parts of the public sector. When they make investments in research institutes and organisations, they will have more stringent controls over IP. It is in itself perhaps a bit anomalous that different parts of the public sector have different terms.”
He went on to say that UKRI was in the process of considering its own IP terms and conditions – but that it wanted to strike a balance between being “too liberal” and inhibiting company growth.
The committee has now produced its report, concluding that UKRI is being “far too cautious”, that it should consider taking more equity stakes in companies that it funds, and that in general the Department for Business, Innovation, Science and Trade should “do much more to recover taxpayer’s money when a successful company exploits research which the taxpayer, via UKRI, has paid for.”
IP in the spotlight
It’s a topical intervention from the committee, given that the government is already stressing its desire to see more value from the research system captured within the UK, and business groups are taking to the media to raise the spectre of exit taxes and spinout crackdowns.
But it’s also an odd moment to be making the argument, since Chapman was clear that the IP policy is in the process of being considered internally within government. UKRI’s new delivery plan says that refreshed IP grant terms will be implemented in November, and these will “better anchor IP exploitation and economic value from public investment in R&I in the UK.”
Chapman’s contrast between UKRI on the one hand and the National Institute for Health and Care Research (NIHR) and ARIA on the other is an instructive one. NIHR has developed and complex revenue-sharing processes in place, whereas ARIA says that its standard approach is for funding recipients to own any new IP generated – but it will sometimes attach certain additional requirements, such as a “small royalty fee” where its funded IP is commercialised outside the UK, and an obligation for products and services to be supplied to the UK government at a discount for a period of time. This latter approach may prove a good guide to future direction of travel.
(That said, a recent House of Lords science committee hearing saw former science minister Lord Drayson push ARIA chief executive Kathleen Fisher to think further about how the funder’s IP policies could better keep commercialisation benefits within the UK. Fisher indicated that ARIA saw its existing policy as the right approach.)
UKRI released a “strategic statement” on IP earlier this year, in which one of the expectations on funding recipients was to ensure that systems are in place which will allow grantees to demonstrate how the outcomes and impacts from international IP collaborations will “meaningfully benefit the UK.” That said, the statement also stressed adherence to the various best practice spinout terms which have followed from the 2023 review of university spinouts, which focused above all on ensuring that universities did not retain too large an equity share.
It’s also worth noting that both the government and UKRI have commissioned recent studies exploring value capture within the UK, including from Cambridge Industrial Innovation Policy and the Innovation and Research Caucus (as we’ve covered on this site).
The indications do appear to be that the recent policy emphasis on flexible founder-friendly policies is indeed “too liberal” to be a good fit with the government’s growing ambitions to retain the benefits of research and innovation within the UK – but until UKRI unveils its new policies, it remains too soon to see exactly how things might change. The Public Accounts Committee report articulates very clearly how there is appetite in some corners for a more robust approach.
Elsewhere in infrastructure
The committee’s focus on IP is also striking given that its inquiry was, on the surface, a follow-up to the National Audit Office’s report on UK research infrastructure. This piece of work focused its conclusions on the “fragmented” infrastructure landscape, the growing maintenance backlog, and the need for UKRI to manage its portfolio in a more integrated way.
Here, the committee simply calls for UKRI to articulate “clear thresholds” for determining whether to continue funding infrastructure projects, concluding that in certain recent examples it could have moved quicker to rein in spending. It also asks UKRI to write to the committee with a detailed breakdown focused on STFC in particular, setting out expected spend on both modernising and decommissioning infrastructure.
The committee also cites evidence received from ResearchPlus, the Russell Group and the University of Bath, all of whom cited rules around VAT as a barrier to the effective sharing of research infrastructure, an important point in light of the government and Research England highlighting research collaboration as a supposedly promising way to manage costs.
But the committee rolls this into a broader argument about the challenges faced by researchers outside the Golden Triangle – its recommendation here is for UKRI to set targets for how much of its funding should be allocated to different regions of the UK.