How to make the most of tech transfer opportunities in Japan

Technology transfer from Japanese universities and research institutions has been minimal, compared to that in the United States. However, a new initiative looks set to change this

After a series of reforms, Japan is now in a similar position to most other countries, where research carried out by university professors and researchers with internal funds and institutional facilities is owned by the organisation for which they work. The vast majority (in terms of technology output) of Japanese universities also have a technology licensing organisation (TLO).

TLOs are peculiar entities in the international panorama of tech transfer institutions. In Europe, tech transfer centres or offices (usually based within universities) and research institutions might have different denominations and tasks, but they nearly always form part of the institutional organisational chart of the university or research centre. Things are different in Japan. TLOs can have four different structures depending on how they are linked to their parent institution:

  • Outside TLO – the university collaborates with an external TLO or establishes one outside the organisation;
  • Internal TLO – the TLO is created within the organisation;
  • Internalised TLO – the university decides to internalise the functions of the external TLO by making it internal; and
  • Multi-organisation TLO – an example of this is the Kansai TLO, which was created to support the licensing efforts of several entities rather than just one.

Legally speaking, TLOs might have different forms too, although this is beyond the scope of this article (for those interested in the history of tech transfer, please refer to the report mentioned below).

As is the case in the United States and Europe, in Japan there is an organisation responsible for monitoring the Japanese tech transfer system and liaising with the national network of TLOs. The University Network for Innovation and Technology Transfer (UNITT) was established to promote potential partnerships between academia and industry and “through these activities… contribute to the development of Japanese academia, the advancement of technology in Japan, and the development of Japanese industry”.

Every year (in Japan, the financial year begins on April 1), UNITT publishes a report on the activities and performances of its members. The following figures are based on these numbers, along with responses from all the (surveyed) universities in Japan to the Ministry of Education, Culture, Sports, Science and Technology’s questionnaire (Figures 1 and 2); all universities and TLOs, according to a report issued by the Japan Patent Office (JPO) (Figure 3); and the 98 respondents who responded to UNITT’s survey (Figures 4 to 7). The figures illustrate that some comparisons with the United States should be taken with a grain of salt, as the number of respondents to US and Japanese surveys was significantly different.

Figure 1 illustrates the number of invention disclosures reported by all universities and compares this to previous years. As can be seen, 2004 is a significant reference date, as this is when national universities were privatised. In practice, this meant that eventually a university could be the official owner of the intellectual property generated by its researchers when public funding was at stake – the TLO would be the operating arm which performed tech transfer activities on behalf of or together with the university. As is clearly visible, after an initial spike – probably due to the passage of the new law – the number of disclosures remained more or less stable, especially from 2011 to 2014.

Figure 2 shows the number of national and international patent applications filed between 2004 and 2014. Also striking is the so-called ‘filing ratio’ – the ratio between the number of invention disclosures and subsequent filing of patent applications based on these disclosures. In Japan, this number seems quite high (between 70% and 80%) compared to other industrialised countries (where it is usually closer to between 50% and 60%).

Figure 3 examines patents that were issued in favour of the respondents. Once again, figures relating to the last three years are similar and mirror other growth indices related to the number of disclosures and filings. In this case, the number of reported applicants is greater than the general number of respondents. The figure shows, for example, that 214 applicants obtained at least one patent out of the total 4,776 patents issued by the JPO in 2013.

In terms of executed licences, Figure 4 compares the number of licences declared in the United States from 1991 to 2014 to those declared in Japan from 2005 to 2014. The two series look fairly similar in terms of growth, as well as sheer numbers. Over the 10-year period, Japan peaked with 2,841 executed licences. Over the same period in the United States, the number of licences rose from 4,932 to 6,896. Since the number of disclosures, filings and patents in the last three to four years has stayed pretty much constant, the growth in terms of executed licences is probably due to the increased negotiating skills of TLOs.

As far as the nature of licensees and the types of agreement executed by the respondents goes, Figure 5 makes it clear that:

  • a significant role is still being played by large corporations, followed by small and medium-sized enterprises (SMEs) and finally start-ups; and
  • there is an even allocation among the different types of agreement being executed with licensees.

Figure 1. Invention disclosures

Source: MEXT

The last numbers to look at are those which relate to the licensing income reported by respondents, where a significant dichotomy between Japan and the United States becomes apparent. It is worth reiterating that comparing two systems in this field based on different cultures and with completely different implementation periods is neither a simple nor a fair exercise. However, the numbers illustrate how important the difference between these two countries is in this regard.

Figure 7 shows that that licensing income in Japan has grown fairly steadily nearly every year (the only exception being 2011), peaking at a very respectable $33 million in 2014 (as a comparison, Italian universities surveyed on this topic reported an overall licensing income of €1.1 million over the same period). However, this pales somewhat beside the reported figure of nearly $2.6 billion in the United States for the same year. Looking at the bigger picture, it appears that the difference is primarily a result of the average amounts generated by the executed agreements, which could itself be the subject of a separate study.

In addition, the number of active licences might be influencing income amounts. According to a UNITT survey, a sample of 186 universities in the United States reported in 2011 that the number of active licences in their portfolio was 38,600 – around six times the number reported by Japanese TLOs (ie, 6,883 in 2012).

Figure 2. Filed patent applications

Source: MEXT

Figure 3. Granted patents

Source: MEXT

Figure 4. Number of executed licence agreements

How to reach technology producers in Japan and Europe

The EU-Japan Centre for Industrial Cooperation is a unique venture between the European Commission and the Japanese government which aims to promote all forms of industrial, trade and investment cooperation between the European Union and Japan, and to improve EU and Japanese companies’ competitiveness and cooperation by facilitating exchanges of experience and know-how.

The centre is based in Tokyo, with a branch office in Brussels, and follows the priorities established by the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs and the Japanese Ministry of Economy, Trade and Industry (see www.eu-japan.eu for more information). It manages policy-related and business support activities – such as managerial training courses, cluster missions, information seminars, research, student placement programmes and a business forum – as well as various other services all designed to help bring European and Japanese businesses together, including the publication of reports dealing mainly with topics that affect Japan and the European Union.

Figure 5. Nature of licensees

Figure 6. Type of executed agreements

Research I undertook at the end of 2014 at the centre led to the drafting and publication in April 2015 of a report entitled “Japan’s Technology Transfer System: Challenges and Opportunities for European SMEs” (available on the centre’s website). This explores the Japanese tech transfer ecosystem of universities and research centres in detail and concludes by offering some recommendations to EU SMEs and Japanese universities and research organisations. It highlights the fact that Japanese universities and research centres interviewed during the research showed a clear interest in increasing their international outreach in terms of tech transfer negotiations and realistic confidence in being able to enter into negotiations with foreign partners.

Following the report’s publication, a survey conducted among EU SMEs revealed the following:

  • The majority of respondents considered the possibility of finding a technology for their company originating from Japan, even though they claimed to know little or nothing about tech transfer opportunities from Japanese research institutions;
  • The majority of respondents declared that they would be interested in licensing available technology rather than buying it;
  • Information communication and technology, engineering, physical sciences and life sciences were the most interesting technology areas as far as respondents were concerned;
  • The majority of respondents declared that they would mostly utilise the licensed technologies either to start a research collaboration with a prestigious institution or to embed the technology in future products or services;
  • The majority of respondents considered that the most likely obstacles when trying to negotiate a contract with a Japanese institution would relate to language barriers, cultural differences and difficulties in crafting an agreement; and
  • The majority of respondents stated that the most important features on a website offering tech transfer opportunities would be explanatory videos of the technologies and advanced research methods to find the available resources.

In February 2016 – two months after the survey was completed – the centre launched the EU-Japan Technology Transfer Helpdesk, a new service designed to support EU and Japanese companies undertaking tech transfer transactions, as well as to bridge the knowledge gap about current available technologies in both Japan and the European Union.

The original survey regarded the service only with regard to EU SMEs and Japanese universities and research centres (ie, outbound from Japan). However, the project was then expanded to include a two-way approach. Therefore, from its official launch, the services offered by the helpdesk are now dedicated to Japanese and EU companies (especially SMEs), universities and research institutions, as well as individuals working for these entities.

Currently, the three pillars of the helpdesk comprise:

  • an integrated database for available technologies from EU and Japanese universities and research centres;
  • a series of information and training activities (eg, webinars, seminars organised in conjunction with the helpdesk’s partners) related to tech transfer and IP management with a focus on the European Union and Japan; and
  • a repository of tech transfer-related materials.

Figure 7. Licensing income

Integrated database

After contacting the helpdesk, EU and Japanese universities and research centres can post their available and most promising technologies in the hope of finding a licensee, buyer or partner. The process also provides for integration with the Enterprise Europe Network (EEN) database. In fact, after completing a technology submission, the system allows users to file an EEN form to be included in the EEN database as well. The EEN is the world’s largest support network for SMEs, with more than 3,000 experts across 600 member organisations in around 70 countries. Member organisations include chambers of commerce, technology centres and research institutes – the EU-Japan Centre for Industrial Cooperation is the only EEN member in Japan (http://een.ec.europa.eu).

Available technologies are divided into seven main categories: applied mathematics, computer science, applied physics, medicine, engineering, physical sciences and life sciences. Technologies can be searched using keywords, technology readiness level or technology area.

The submission of technologies, exclusively and freely available to universities and research centres, cannot happen automatically – there must be prior communication with the helpdesk to select the technologies to be showcased. The submission form (in English and Japanese) allows applicants to watch a video tutorial with guidance as to how to fill in the form (which will ultimately be published) correctly.

Each technology is displayed in a standardised manner by allowing the viewer to read a description of the invention, benefits, limitations, potential applications (with the possibility of uploading pictures, charts, videos and audio files) and an institutional section with some useful information about the entity posting the technology.

Every search starts at the home page. If the search is made using keywords, there will likely be more results as more resources will be consulted. On the other hand, if the search is based on a technology area or technology readiness level, the results (if any) will be exclusively related to the number of technologies that have been uploaded onto the database, which at the moment is limited given that the project has not been operative for that long. Technology seekers should be aware that the portal’s true power lies in the aggregating features it has for executing a keyword search. In fact, when a keyword search is performed, the number of available technologies being consulted is more than 20,000 as of the time of writing (originating mainly from Japan and Europe).

Search results are displayed in three layers – a critical point. The first layer shows the technologies listed directly in the helpdesk’s database and those contained in the databases of universities and research organisations which are partners of the helpdesk and which have a webpage with a searchable list of technologies. For these technologies, there is the possibility that the helpdesk might also act as an offline liaison, helping the seeker to get in touch with the relevant organisation.

The second layer sets out the number of available technologies contained in the EEN and J-Store databases. The first is Europe’s largest database of cutting-edge technologies, containing more than 23,000 partnership and technology profiles (originating from 70 countries); the second is a free database providing research results stemming from Japanese universities and public research institutions. J-Store contains information about Japanese patents and patent applications, international patent applications filed in Japan and research papers. A click on the database icon will take the seeker to the relevant results. In this case the helpdesk can act as a liaison and help the seeker offline if the technologies are owned by the helpdesk’s partners.

The third layer relates to patent documents in general (ie, patent applications and granted patents) contained in the databases of the major patent offices of the world. This final set of results gives the reader an idea of what is going on in general (in terms of patenting activities) in the specific search field.

Information and training activities

Another important pillar of the helpdesk is the organisation of physical (ie, seminars) and virtual (ie, webinars or podcasts) events on topics covering tech transfer and innovation, with a focus on the European Union and Japan. The relevant materials, such as videos and presentations, are available for consultation on the website. Speakers from industry and academia offer their views on important topics regarding technology transfer in a broader sense, which has already generated keen interest among stakeholders.

Materials for consultation

The last important section of the helpdesk is dedicated to material for consultation. The website features a list of available materials including reports, slide decks from presentations, webinars, podcasts and articles. This helps to ensure that stakeholders are always kept up to date about activities run by the helpdesk and can download materials that are posted online. The helpdesk is designed to promote open access to valuable resources in the field of IP rights, technology transfer and, more generally, innovation. In addition, representatives of industry, academia and professionals are encouraged to submit articles and presentations for the benefit of the entire community.

Action plan

The EU-Japan Technology Transfer Helpdesk is a new way to access technology produced in Japanese and European universities and research institutions.

For those seeking technology, the following tips might prove useful:

  • First, try to fully understand the problem you are trying to solve.
  • Create a list of keywords that might be relevant to your search.
  • Make a search on the helpdesk’s platform by using keywords if you want a greater number of results.
  • Go through the different resources regarding the available technologies and you will nearly always find the contact details of the entity to which the technology belongs.
  • Contact the helpdesk if you think you cannot directly reach the relevant entity or if you do not find what you were looking for. Many technologies and skills might be available on demand – the helpdesk will help you find them, if they exist.

For technology providers (universities and research organisations), there are also some basic rules to follow in order to be effective at leveraging the helpdesk’s potential:

  • Try to make a shortlist of candidate technologies that you think might be of interest to domestic and foreign entities – not all the technologies in your portfolio deserve to be kept alive.
  • Be ready to create uniform descriptions of the technologies by first highlighting the potential applications and limitations (if known) of the technology being advertised.
  • Prepare accompanying materials which can corroborate the value of the technology and its potential applications – videos are preferred, as users enjoy seeing how things work; a patent is a useful document, but it is not usually a riveting read.
  • Be available to discuss with potential licensees whether there is interest in the technology – as in any investment deal, the investor believes in the team. Be ready to have the creators meet with interested parties.
  • Work on a readable slide deck, which should always be part of the materials attached to the technology being promoted – not everyone has a doctorate in carbon nanotubes, so be clear and submit understandable documents.

Luca Escoffier is project manager of the EU-Japan Technology Transfer Helpdesk

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