Innovation: bridging the divide

The research world is changing fast - and a new breed of professional is helping to bring discoveries to the market place. ELMIEN WOLVAARDT reports. innovation:

'We are in the third and most profound of the societal revolutions in world history - the information revolution - and this has changed our world,' says Prof Tony Bunn, director of the Medical Research Council's Innovation Centre.

Prof Tony Bunn

'The research world is also changing. Especially in a country such as South Africa, with its combined burdens of poverty and disease, scientists are under increased pressure to produce insights and innovations that have the potential to improve quality of life.

'This means giving research an applied focus with social relevance, and forging partnerships with industry to commercialise new discoveries.'

The Innovation Centre is tasked with helping MRC researchers to do precisely that: take their discoveries to the market.

Although commercialisation of research might seem to be in conflict with the ideals of independent and academically 'pure' scientific work, without it, new techniques or tools with the potential to save lives, might remain on the proverbial shelf, collecting dust.

'This is not to say that 'blue-sky' research - think of the movie Beautiful Mind - is unnecessary or unwarranted,' says Prof Bunn. 'Such research often gives rise to the kind of serendipitous discoveries that can lead to major shifts in the way we understand our world. This, in turn, creates many previously unimagined avenues along which more applied research - and possible commercialisation - can take place.'

In addition, he says, research innovations have a 'very positive' effect on the economy.

'Each research innovation that leads to a spin-out company, patent or licence means more jobs, more business for suppliers, and more business for their suppliers in turn.

'And we must remember that wealth and health form a virtuous cycle: an increase in one positively reinforces the other,' says Prof Bunn.

Unfortunately, South Africa has been extraordinarily unsuccessful at turning innovations from academic research into commercial opportunities.

'By far the most significant barrier in South Africa and elsewhere, is the cultural mismatch between universities and industry,' says Dr Sharon Herbert, also of the MRC Innovation Centre.

'A contributory factor is the performance evaluation system of university and science-council researchers, which requires them to publish regularly in peer-reviewed academic journals,' she says.

This places discoveries in the public domain, and makes them unattractive to investors and possible industry partners.

'To encourage increased interaction between scientists and industry, performance evaluation systems need to be adjusted to include weightings for invention disclosures, patents, licensed patents and the establishment of spin-out companies. If scientists are rewarded for engaging in entrepreneurial activities, they will be encouraged to collaborate more with industry,' says Dr Herbert.

The MRC has realised the importance of having a formalised process to manage the discoveries emerging from its various research units. Early last year, the necessary systems and processes were actively implemented - including systems to ensure that researchers share in the financial benefits arising from their discoveries.

Nationally, however, there is a shortage of the skilled professionals - called technology transfer professionals - needed to help scientists take their discoveries to the market place: a convoluted and complex process that hopefully results in either registering and licensing patents or developing spin-out companies. In essence, these professionals build the bridge between research and industry.

Says Prof Bunn: 'Typically, technology transfer professionals come from the research and development environment and have developed the business and legal acumen necessary to move academic discoveries to market. It is much easier for a scientist to develop these combined skills than it is for an accountant or lawyer, for example, to understand the language and methods of science.'

The Innovation Centre is in the process of training more technology transfer professionals - not only in South Africa, but also in other African countries - through its partnership with MIHR, the Centre for the Management of IP (intellectual property) in Health Research and Development, based in Oxford, UK.

This MRC/MIHR initiative, called the Africa Programme for Health Innovation, is sponsored by the Rockefeller Foundation and the UK's Department for International Development, and is actively engaged in both South and East Africa at present. To date, over 75 technology transfer professionals have benefited from this initiative.

'This is not a local phenomenon. The ever-increasing demand for technology transfer professionals - those who have a unique understanding of the "languages" of science, business and law, and are able to integrate them - is testimony to this global reality.'

The good news is that the Department of Science and Technology (DST), through the Innovation Fund Commercialisation Office, has also recognised the important role these professionals have to play, and has committed itself to supporting their development. 'They have sponsored several workshops to help them develop skills related to negotiation, licensing, patenting, project management, marketing and business development,' says Dr Herbert.

Government's active participation speaks of the value it places on research innovation.

In this year's Science and Technology budget speech, Minister Mosibuda Mangena said that ‘... much of our success as a country is dependent on research and development.'

South African President Thabo Mbeki also stressed this position when he recently stated: 'Institutions of higher learning must contribute to the economic growth and transformation in our country.'

Says Prof Bunn: 'While research institutions give rise to new ideas and industry turns these ideas into products, the role of Government is to ensure a fair and enabling legislative and funding environment.

In addition to the ground-breaking 1996 white paper and subsequent innovation initiatives, the DST and Department of Trade and Industry have joined forces to propose new IP legislation that seems set to provide fertile soil for the commercialisation of research discovery at publicly funded institutions.

In general, a balance between research excellence and commercialisation is encouraged, and the proposed legislation states that researchers must disclose potential intellectual property to the technology transfer office of their institution.

The principle of benefit sharing must also be accepted and defined, and, most significantly, the proposed legislation states that institutions will be obliged to have intellectual property policies in place in order to qualify for public funding.

'The intention of Government is to turn South Africa into an innovation-driven economy that is able to compete on the global stage,' says Prof Bunn.

'Whether we like it or not, the research landscape has changed irreversibly. Who pays the piper calls the tune: tax payers are now expecting more tangible outputs from their tax Rands.'

Success stories at the MRC
During his research career, Prof Tony Bunn has had first-hand experience of the rewards associated with taking a research discovery to the marketplace.

In 1984, while at the University of Stellenbosch Medical School, Prof Bunn combined his academic and entrepreneurial abilities and developed the world's first portable lung function system, ELF, for diagnosing obstructive and restrictive lung disease. This resulted in the spin-out of a company called CRC, and ELF was marketed in the same year. As Prof Bunn wanted to stay in academic research, all CRC's research and development was outsourced, with the company holding the intellectual property rights. CRC is still involved in ongoing research and development, manufacturing, and distribution of PC-based diagnostic medical devices.

With an Innovation Fund Grant, and together with the Peri-natal Mortality Research Unit at Stellenbosch Medical School and the CSIR, he also led the team that developed 'Umbiflow'. This is an affordable and effective device for detecting placental abnormalities during the last trimester of pregnancy. 'Umbiflow' was awarded the NACI Most Outstanding Innovation of the Year Award in 2002.

The following are other MRC success stories:

• DNA-based diagnostic tests and risk assessment tools for a variety of diseases, including breast cancer, ovarian cancer, colon cancer, familial hypercholesterolemia and cystic fibrosis. An additional test for cardiovascular disease is currently being commercialised. The intellectual property was developed by Dr Maritha Kotze and her team, and the services are provided predominantly in South Africa through a start-up company called GeneCare (see page 14 and 15).
• A stereotactic-positioning device (SPD) that uses surface markers on a patient's head to accurately locate and take tissue samples (biopsies) from brain lesions identified using conventional scanning. The system comprises a tripod device and an associated biopsy needle/probe. The SPD is aligned via complex mathematical calculations using a PC to enable the probe to directly enter the brain and locate the centre of the identified lesion. In this way minimal damage occurs to the surrounding healthy tissue. A local company was licensed to market the product and approximately forty units have now been sold both nationally and internationally, mainly to developing countries.
• A software package and system for managing remote data collection in clinical trials and other field studies has been developed and is being used by MRC researchers. The technology, called HAPI, is being distributed using an open source model.
• A nutritional software package has been licensed to a local company for packaging and distribution.
• Together with a Malaysian company, the Nutritional Intervention Research Unit has developed a product aimed at improving general nutritional (micronutrient) and health status, as well as the nutritional status and prognosis of diseased individuals. A license has been granted to a listed company in South Africa for the production and distribution of the product, while the Malaysian partners are exploiting it internationally. Royalties from all sales are shared between the MRC and its Malaysian partner. Some of the products from this IP are already on the market.

Commercialising innovations at the MRC
The MRC Innovation Centre has developed an intellectual property (IP) policy that has recently been approved by the MRC Board. With the systems and innovation tools developed and available on the web for all researchers, the Innovation Centre is now well equipped to manage the complexities of moving from "mind to market" - in collaboration with MRC inventors.

What are the requirements for patenting an innovation?
Patenting is the most robust route for the commercialisation of an invention. A patent is an exclusive right granted for a period of time (20 years) to an inventor in exchange for a full disclosure of the invention to the public. In order for an invention to be patentable it needs to be new or unique and non-obvious to someone 'skilled in the art'. It also needs to have an industrial application.

Who owns the intellectual property of an innovation?
Generally, innovations (or IP) created or discovered by MRC researchers and collaborators belongs to either the MRC alone, or jointly to the MRC and any other institutions or organisations that co-fund the research.

What about the researchers who created these innovations?
The moral rights of the researchers (called 'IP creators') responsible for creating innovations with commercial potential are both respected and protected. These researchers have the right to participate in decisions regarding the commercialisation of the intellectual property, and are also entitled to a percentage of the profits accruing from this. Researchers also get financially rewarded for their work.

Can researchers still share their discoveries with the academic world?
In the first place, if the objective of a researcher is open scholarly work, the MRC will, in general, refrain from asserting ownership. Secondly, the right of researchers to publish and present the results of their work are recognised. However, the MRC's Innovation Centre will advise researchers on protecting the IP in their work before it is publicly disclosed.

How are research innovations commercialised?
There are two main routes that can be followed with an innovation that has commercial potential: it can either be licensed for implementation by a commercial partner company, or a spin-out company can be created that is based on the innovation. Which route is chosen depends both on the nature of the innovation, and the extent to which the researcher wants to be involved in its commercialisation.

What happens to the profits arising from commercialisation?
When IP is licensed to an existing company, the income resulting from licence fees and royalties, minus any direct costs, are dived according to the following 'Award for IP beneficiaries/inventors' scheme:

For a spin-out company various permutations of inventor participation are defined in the IP policy (see http://innovation.mrc.ac.za/policy.htm). This can vary from no involvement and being rewarded via the above scheme, to owning shares in the company in lieu of the scheme. An MRC scientist has already received close to R100 000 through this scheme.