Getting Research Out of the Lab: Supporting the “Third Mission” of Canadian Universities

“As Canada reorients its innovation strategy toward technological sovereignty and economic security, universities are bearing the brunt of changing expectations. Beyond education and research, they are increasingly being judged on their third mission: translating the knowledge they generate into socioeconomic benefits. But we need only to turn to the archives of this very publication for evidence of longstanding calls to action across Canada’s innovation ecosystem. Eight years ago, Feridun Hamdullahpur as President/Vice-Chancellor of the University of Waterloo called for universities to have “ an unwavering dedication to entrepreneurship ” in the face of the 2018 CCA report on Canada’s struggle to commercialize research. In 2024, Tarek Sadek, executive director of the Innovation Boost Zone at Toronto Metropolitan University, called for an innovation-based economy “built on the shoulders of a strong ecosystem capable of translating our world-class university research into products and services that can improve our living standards, sustain our planet and strengthen our global competitiveness.” Along with competitiveness, intellectual property (IP) is central to economic security . Current geopolitical pressure has shown that issues that could previously be dismissed as inconveniences to the talent and IP resources of this country are now critical vulnerabilities that must be addressed at the research stage. Inefficient tech transfer combined with a weak early-stage investment ecosystem are key causes of IP leakage. The tech transfer process can be the deciding factor in whether a commercialization attempt is made at all. A complicated one can kill the attempt before it even begins. Given that university research operates far upstream from practical implementation, connecting the lab to the market is no small task. A notable challenge is that university tech transfer offices are underfunded relative to the size of the IP portfolios they manage. While the ElevateIP program and provincial organizations are working to bridge this gap, federal funding agencies must step up by providing clear guidelines on IP use and actively resourcing tech transfer as a matter of course when allocating research grants. Merely owning IP is not enough: patents are only valuable if they are put to use. Public research funding agencies are increasingly required to connect the research they support to measurable economic impact . To create this impact, patents must be mobilized quickly and efficiently . Recognizing this, many countries have adopted express licenses to speed up the process. These minimally negotiable templates avoid expensive, lengthy legal reviews and balance the needs of all the stakeholders. The US introduced express licenses in 2010, building on its highly effective Bayh-Dole framework; the United Kingdom relies on the USIT guide; and the Netherlands recently committed to a framework capping license negotiations to less than a week. Canada’s approach is a stark contrast to our peer nations: only a handful of our universities use express licenses, and we have no nationally consistent approach. Because Canada has no federal guidelines governing management of the IP arising from publicly funded research, every university has a unique IP policy. This fragmented landscape has prevented Canada from settling on a unified tech transfer process. The value of fast and simple tech transfer cannot be overstated. While negotiating a licence from scratch might yield marginally better terms for one party, the resulting delays and legal costs are likely to outweigh any benefits, since these costs can have a chilling effect on tech transfer. Faculty may view the time spent navigating a long and complex tech transfer process as conflicting with research priorities. Startups that are never created in the first place are lost opportunities for universities to fulfill their third mission. Context is important: Canada cannot copy and paste American express licenses. The U.S. is a seller’s market flush with risk-tolerant capital, allowing American universities to take aggressive licensing positions that would stifle innovation in Canada’s buyer’s market. Changing institutional IP policies (which are often baked into collective bargaining agreements) would be a tall order, so we require an express licence that works with existing institutional IP policy frameworks. We built the Simple Agreement for Innovation Licensing ( SAIL ) to meet these challenges after extensive research and pan-Canadian consultation with universities, founders, investors, industry associations, national innovation networks, and public funding agencies. From this work, we distilled 6 core principles to guide effective tech transfer in the Canadian ecosystem, or indeed in any ecosystem that is presently constrained by systemic risk intolerance . The intent is to use these principles to resolve the tensions that have historically made tech transfer slow and adversarial: who owns the IP and when, how the university can be compensated without burdening a pre-revenue company that has not yet earned a dollar, what happens when the market eventually validates the technology, and how to avoid the uncertainty arising from any terms left to future negotiations. To ensure the public benefit of research is not locked behind a single company’s exclusive access to the licensed technology, SAIL requires that licensees issue sublicences to non-competing third parties on request. To reward all stakeholders in proportion to the risks they take, and to avoid burdening pre-revenue companies with royalties and fees, universities are compensated primarily through convertible debt (proportional to the costs they absorb on behalf of their startups). To make IP ownership clear from the start, SAIL defines a “trigger event” (by default, the startup securing private investment) that establishes economic viability. When a trigger event occurs, the debt converts to equity, and the startup can take ownership of the IP on the preagreed terms. To motivate participation in Canada’s innovation ecosystem, SAIL is written in plain language . This decreases the complexity of licensing terms and reduces the time and cost involved in transferring technology from universities to startups. The result is an easily-understood, fully pre-negotiated licence that allows universities to move fast enough to deliver on their “third mission” while respecting the realities of a capital-constrained ecosystem. Startups are more effective vehicles for bringing disruptive technologies to market than incumbent firms. The latter are often not Canadian-controlled, and there is clear evidence that when tech is transferred to startups, the vast majority is to local startups, increasing the chances of domestic benefit. However, weak early-stage funding often forces Canadian startups abroad out of necessity rather than preference. By actively incentivizing universities to support their startups in the pre-revenue phase, SAIL helps universities give domestic innovators the foundation they need to stay and build disruptive technologies at home. Canada is at a crossroads : there have been calls to address the critical challenges to unlocking the potential of our university research output for years, and we cannot afford to wait any longer. We need a ready-made, nationally consistent solution suitable for the vast majority of startup licensing deals. By embracing an approach that does not require institutional IP policy changes, Canadian universities can easily lead this change, sending a powerful signal to funders and faculty alike that they are committed to entrepreneurship and to translating their research into lasting socioeconomic impact. The post Getting Research Out of the Lab: Supporting the “Third Mission” of Canadian Universities appeared first on University Affairs .

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