SAIL Version 3
Financial model updates, axiom clarifications, detailed guidance, and more!
Today I give you a break from my usual innovation policy ranting discussion to announce the release of SAIL version 3, as well as a major facelift for www.howtosail.ca. This website will serve as a central hub for all things SAIL-related going forward, including copies of the latest documentation, a detailed archive and changelog, and a list of partner organizations that are involved in building and using the SAIL framework.
If you are interested in getting involved with the SAIL initiative as a supporter, a contributor, or a user, or are simply interested in staying up to date, please get in touch. You can also sign up on the website to receive updates and news relating to SAIL going forward, or follow along on LinkedIn.
SAIL v3 changelog
The major changes between v2 and v3 are concentrated around the financial model. What we heard clearly from those who provided feedback on v2 was that the components of the convertible debt included in SAIL required accounting overheads that added unnecessary complexity. To address this, we have separated the components of convertible debt into two buckets, one of which requires careful accounting and corresponds to accounting that universities were already doing anyway, and one that does not. In this way, SAIL v3 should be no more administratively complex than any existing licensing framework.
Alongside this version, we have also significantly expanded the SAIL guidance document. The guide, also available on the website, provides a detailed rationale, grounded in the axioms of tech transfer and discussions with stakeholders from across the country, for every decision made in SAIL. The guide walks users through the process of a SAIL negotiation, section by section, clearly delineating responsibilities and elaborating on the spirit and intention behind the various clauses in SAIL. We note that the guide is not yet in plain language, which will be corrected in the next few weeks.
The other significant change relates to the axioms themselves. A few axioms have had wording tweaked to clarify intent, with the most significant changes being made to axiom 5, which was, in hindsight, not very clearly articulated in SAIL v2. This axiom relates to how institutions should seek to benefit from supporting commercialization activity. SAIL’s position is that the amount of convertible debt and eventual equity being tied to the marginal cost of commercialization above and beyond the costs involved in the research process itself. Given that the institution has already been paid through other means (mainly taxpayer-funded grants) for the work involved in undertaking the research and disseminating the results, only costs that are not directly aligned with their mandate, such as patenting, market studies, IP management support, and other commercialization-specific costs, should be reflected in institutional equity stakes. Just as with any angel investor that is rewarded with equity that reflects the cost of their investment, SAIL provides a framework through which universities can simply account for their costs and see reward that is proportionate to the support they provide.
The guidance document dives deep into the rationale for this, also providing a framework for thinking about situations in which it is reasonable to execute a license agreement that may not be compliant with all of the axioms.
Definitions and language have been edited for simplicity and clarity throughout. While it is not yet at the standard of “plain language”, it is getting very close. You can expect a minor release to take it the rest of the way in the near future.
The last piece of the puzzle is funding, and providing research institutions not just the tools (SAIL) to deliver impact beyond the lab, but also the resources. Stay tuned for developments on this front.
Acknowledgements
Many thanks to University of Ottawa Innovation Support Services, for hosting the roundtable discussion that informed the latest update to the framework using funding from Intellectual Property Ontario, and to co-hosts MVIP™ Solutions, Inc. and FORPIQ, to Robin Ford for her work simplifying the language in the agreement enroute to a true plain language contract, and to all those who participated and shared their insights.