Intellectual Property Policy in Canadian Post-Secondary Institutions
Evaluating the downstream success of various models of academic IP ownership through entrepreneurship outcomes
Incentivizing commercialization of IP developed in universities is a complex challenge. This article makes the case that effective commercialization of early technology requires inventor ownership of the associated IP.
Their conclusion is based on differential analysis of European innovation before and after an EU-level policy shift. Prior to 2000, university IP in Europe was largely governed by “Professor’s Privilege”, which gave academics control of their inventions. In 2000, many EU countries changed to university-owned inventions, resulting in a decline in university-based startup activity in countries that did so compared to those that did not.
Canada has a patchwork of IP policies that span the spectrum from inventor ownership to university ownership, a situation that provides us an excellent sample by which to evaluate the effectiveness of different models of tech transfer.
The conclusions of the European study generalize well to Canada, as shown by PitchBook Data statistics presented in this BetaKit article. In their analysis of top 100 universities by entrepreneurial activity, 8 Canadian universities feature, and there is a telling gap and a key IP policy difference between the top 4 and bottom 4 when ordered by spinout activity normalized by population. Below, the brackets show (# of spinouts, # spinouts per 1000 students enrolled in 2022, and average $ raised per spinout), By the numbers, in the last decade:
McGill: Jointly-owned IP
411 spinouts, 11.8 spinouts per 1000 students, $38M raised per spinout
Waterloo: Inventor-owned IP
406 spinouts, 10.6 spinouts per 1000 students, $48M raised per spinout
Queen’s: Inventor-owned IP
234spinouts, 8.3 spinouts per 1000 students, $21M raised per spinout
U of T: Jointly-owned IP
392 spinouts, 6.4 spinouts per 1000 students, $38M raised per spinout
...
UWO: University-owned IP
156 spinouts, 3.6 spinouts per 1000 students, $13M raised per spinout
UBC: University-owned IP
254 spinouts, 3.5 spinouts per 1000 students, $18M raised per spinout
Concordia: University-owned IP
141 spinouts, 2.8 spinouts per 1000 students, $16M raised per spinout
York: University-owned IP
143 spinouts, 2.6 spinouts per 1000 students, $18M raised per spinout
What the top 4 all have in common is an IP policy that gives inventors control over their inventions, while those with only university control lag by a large margin. Just as was seen in Europe, giving inventors control of their inventions correlates with downstream spinout activity and fundraising. It’s worth noting that having a university involved is not a bad thing (indeed, tech transfer offices can add significant early value), as long as inventors are involved and have agency in the process.
IP policies in Canada are developed at the level of individual institutions, with little federal or provincial policy guidance or incentive to choose any particular model of IP ownership and governance. This is not a problem with the universities: they are simply responding to a lack of incentive to prioritize any particular model of tech transfer. If we are to fully benefit from the economic potential of Canadian research, we need to act on the data to develop public policy that incentivizes adoption of tech transfer frameworks that put inventors in the driver’s seat.
I have no issue with the principle that inventors should have meaningful input into the commercialization of their inventions. However, I don’t believe that data cited in this post support the argument that “giving inventors control of their inventions correlates with downstream spinout activity and fundraising.”
The cited Pitchbook university rankings are not specific to companies based on IP developed at the founder’s alma mater. Rather Pitchbook has counted the number of alumni entrepreneurs, and their companies, who have raised venture capital over a 10-year period. This is a measure of the entrepreneurialism of the student body of the institutions. Pitchbook does not use the term “spin-out” at all—it simply counts “companies,” many of which are likely founded by alumni entirely independent of their alma mater’s research outputs or IP policies. Indeed, the data do not align with published AUTM data on spin-outs arising from university IP.
Unless one assumes that institutional IP policies (which I contend most students are blissfully unaware of) somehow shape the entrepreneurial character of the student body, it is difficult to draw a causal link between those policies and the number of companies associated with each institution in the Pitchbook data.