Chapter 5: Government Funded Biotechnology Research
5.2 United States Government Funded Public Research Institute: National Institutes of
5.2.6 NIH OTT Effort to Increase Licensing Activity to Serve Global Public Health
國
立立 政 治 大
㈻㊫學
•‧
N a tio na
l C h engchi U ni ve rs it y
patented inventions in their internal research programs but do not permit their use in the sale of products or services.
Figure 10 NIH Licenses by Type of Agreement (FY2011-2013) 118
5.2.6 NIH OTT Effort to Increase Licensing Activity to Serve Global Public Health
Table 11 NIH Executed Licenses since FY 2008119, 120
Fiscal
Year Executed License % of US companies % of Small Businesses (Both US and Non-US)
FY 2008 259 81%* 57%*
FY 2009 215 81% 35%
FY 2010 226 79% 42%
FY 2011 197 82% 52%
FY 2012 198 80% 42%
Over the years, NIH has been working closely with Small and Medium Enterprises (SMEs) to facilitate technology licensing from NIH to SMEs. For example, in FY 2009, NIH has created a virtual space where NIH licensees and SMEs could self publish a showcase of their technologies and product development for an audience of
118 Annual Report FY 2012 (2012), NIH Office of Technology Transfer, p4, Retrieved from http://www.ott.nih.gov/sites/default/files/documents/pdfs/AR2012.pdf
119 Summarized from NIH Office of Technology Transfer Annual Report, from FY 2008 till FY 2012.
120 *: Estimates on Pie Chart from 2008 NIH OTT Annual Report, p6, about 50 “total foreign” licensor, 125
“Small U.S. Business” licensor, 23 “Small Foreign” licensor.
•‧
issued by NIH from FY 2008-2012 and the proportion of local and foreign licensees. In FY12, OTT executed 198 license agreements — 80% with US companies of which 42% were small businesses. Of the new licenses executed, 54 (27%) were with companies licensing from NIH for the first time; 74% of those first-time licensees were US companies and about 12% of those were small US businesses122.In FY 2012, OTT initiated a new licensing program to reach out a difficult market segment that it previously not exploited – start-up companies. Since many technologies developed at NIH are early stage medical technologies, time and development risks to commercialize a product are high. The initiative includes two model agreements123 tailored to fit the special needs of start-up companies: a new short-term exclusive Start-Up Evaluation License Agreement (Start-up EELA) and a Start-up Exclusive Commercial License Agreement (Start-up ECLA) to facilitate the licensing of intramural invention to start-up companies124. Start-up EELA allows start-up companies to license in NIH early-stage technology for a shorter period of time compared to ordinary agreements, to evaluate their interest before committing into a longer term Start-up ECLA. These new licenses will be offered to companies developing drugs, vaccines or therapeutics from NIH or FDA patented or patent-pending technologies. Start-up companies entering into the agreement must license at least one US patent and commit to develop a product or service to the US market.
These new Start-Up Licenses successfully minimize the start-up companies’ entry barrier under exclusive licenses and provide a structure that encourages and supports the commercial development of early stage NIH and FDA technologies. As a result, the
121 Annual Report FY 2009 (2009), p6, NIH Office of Technology Transfer, Retrieved from http://www.ott.nih.gov/sites/default/files/documents/pdfs/AR2006.pdf
122 Annual Report FY 2012 (2012), NIH Office of Technology Transfer, p4, Retrieved from http://www.ott.nih.gov/sites/default/files/documents/pdfs/AR2012.pdf
123 The new NIH Start-up Licenses are offered to assist start-up companies that are:
1) less than 5 years old; 2) less than $5M in capital raised; and 3) fewer than 50 employees, to obtain an exclusive license from the NIH for early stage biomedical inventions.
124 NIH Start-Up Exclusive License Agreements (n.d.), NIH Office of Intramural Research and Office of Technology Transfer, http://www.ott.nih.gov/nih-start-exclusive-license-agreements
•‧
國
立立 政 治 大
㈻㊫學
•‧
N a tio na
l C h engchi U ni ve rs it y
program brought in over 30 license applications for drugs and biologics in FY 2012.
This program is expanded to include device in FY 2013125.
Besides that, members of NIH TTO staffs have been actively participating and giving presentation in various local and international meeting. These outreach has successfully communicate the technology transfer policy of NIH, engage in cooperative technology transfer with governmental and non-profit institutions, as well providing training to institutions implementing technology transfer. Footsteps NIH TTO covered including APEC Research & Technology meeting in South Korea, Licensing Executive Society Annual Meeting, various start-up and SBIR meetings, and etc.
125 Annual Report FY 2012 (2012), NIH Office of Technology Transfer, p4, Retrieved from http://www.ott.nih.gov/sites/default/files/documents/pdfs/AR2012.pdf
•‧
國
立立 政 治 大
㈻㊫學
•‧
N a tio na
l C h engchi U ni ve rs it y
5.3 Taiwan Government Funded Public Research Institute: National Health Research Institute (NHRI)
Taiwan National Health Research Institute (NHRI) is the equivalent institution of United States National Institute of Health based on the funding source, motive of foundation and organization structure in general. NHRI has similar “Extramural Research Program” and “Intramural Research Program” of which the former program subsidizes researcher outside the institute and the latter program subsidizes intra-institute research.
5.3.1 Background
Located at ZhuNan, MiaoLi County, the NHRI is dedicated to enhance the progress in medical research and to improve the overall health care quality in Taiwan.
The NHRI research focuses mainly on medical research, drug development, public health, medical equipment and technique research and etc. Not only funding scientific research, the NHRI is dedicated in maintaining various databases like Cell Bank, National Health Insurance Research Database126, Taiwan Polymorphic Marker Database127, and also provide on-job training to medical personnel. Unique to NIH, the NHRI owns a cGMP128 biology product factory, of which is crucial for vaccine development and to bridge the production of biology product from bench-side to bed-side use.
The NHRI is comprised of 8 Institutes, 11 Research Groups and 3 centers. All of the institutes, divisions and centers are dedicated to medicine, public health and pioneer medical research. The NHRI has been established to serve the following purposes:
• To plan the overall directions of national science and technology development in health and medical care;
126 全民健康保險研究資料庫
127 台灣多變異性標桿資料庫
128 cGMP, current good manufacturing practices, are guidelines enforced by United States Food and Drug Administration to all manufacturers of dietary supplements, ensuring the production of good quality drug.
•‧
國
立立 政 治 大
㈻㊫學
•‧
N a tio na
l C h engchi U ni ve rs it y
• To coordinate, integrate, and support research activities undertaken by medical institutions in this country;
• To further educate and train young scientists and physicians;
• To establish an objective and fair system for reviewing and assessing research projects and their progress; and
• To facilitate the exchange of information and to promote domestic and international cooperation129.
5.3.2 Executive Orders and Source of Funding
Compared to NIH at its age of 80s, of which was founded back in 1930s, Taiwan NHRI is a relatively young institute founded in 1996. The idea of establishing a National Medical Research Center was being proposed by a group of Academicians from Academia Sinica, the national academy of Taiwan. It was later being adopted by the National Health Administration in 1990 and renamed it to National Health Research Institute. In late 1995, President Teng-hui Lee signed the Act of Congress for The Establishment of National Health Research Institute130 into law in February 3, 1995.
According to paragraph 3-5 of the abovementioned act, the fund for NHRI foundation was NTD 2 billion, funded by the Taiwanese government. The subsequent research funding comes mainly from the Taiwanese government though NHRI accepts private donation from the public. The Ministry of Health and Welfare (MOHW) is the competent authority of NHRI and is responsible to supervise NHRI, since NHRI acts as a non-profit organization and most of its funding come from the government.
In 2013, the NHRI will be given a budget at NTD$ 2,193M for it’s research and development activity in 2014. Funding given by other funding agencies in Taiwan to NHRI researchers are not being discussed in this study.
129 Overview (n.d.), National Health Research Institutes, Retrieved from
http://english.nhri.org.tw/NHRI_WEB/nhriw001Action.do?status=Show_Data&uid=20110617146947300000
130 財團法人國家衛生研究院設置條例（總統令 八十四、二、三 華總(一)義字第 0647 號）
•‧
國
立立 政 治 大
㈻㊫學
•‧
N a tio na
l C h engchi U ni ve rs it y
5.3.3 Organization and Structure
Figure 11 NHRI Organization Structure 131, 132
Figure 11 shows the basic organization structure of NHRI. The Technology Transfer Office (TTO) was established in 2001, of which it currently recruits 10 personnel, including one director, two legal professionals, two personnel responsible for TTO activity housekeeping work, and five personnel working on IP management in different fields. NHRI keeps a very small Technology Transfer Office though they handle almost everything a TTO does by outsource part of its operation to outside law firm. For example, TTO outsource its Taiwan and International Patent Application operation to local and foreign law firms133, more than eighteen firms were selected in 2013, among them 7 are international law firms and 11 are local law firms134.
131 張正平（2006），我國國家生物技術研究機構技術移轉機制之探討，國立政治大學法律與科技整合
研究所，第四章，政大機構典藏，2009-09-17T06:18:05Z
132 Intellectual Property Management Committee was translated from 「智慧財產管理委員會」
133 公告甄選本院委託辦理「國內外專利申請案」之事務所（2013），國家衛生研究院， Retrieved from
http://www.nhri.org.tw/NHRI_WEB/nhriw001Action.do?status=Show_Dtl&nid=20120709141077550000&uid
=20120709141077550000
134 101 年度國家衛生研究院公開徵選事務所結果（2013），國家衛生研究院，Retrieved from
http://www.nhri.org.tw/NHRI_WEB/nhriw001Action.do?status=Show_Dtl&nid=20121114360717540000&uid
=20121114360717540000
NHRI Board of Director
President's Of?ice
Research Supporting
Department Administrative Department
Technology Transfer Of?ice
Incubation Center
Intellectual Property
Manangement Comittee Research and Planning
Department Special Units
•‧
Besides that, the NHRI contains an “Intellectual Property Management Committee” which helps the President of NHRI in making decisions about IP management, technology transfer and Incubation Center related issues. The committee comprised of a total of 7-9 members, which includes the director of NHRI division, the director of TTO and other personnel that has great experience in intellectual property management. Committee members often includes basic science researcher, medical doctors, or TTO personnel with rich market experience. In certain occasion where the committee needs more professional opinion, professional in the field would be invited to join the committee131.
According to NHRI TTO website, the Intellectual Property Management Committee has very strong decision-making power in almost all IP-related activities in NHRI. If an inventor were interested in filing a patent application for his or her invention, upon due diligence validation by the TTO, the patent application request would be submitted to the committee for evaluation. TTO will only execute the patent application process if the committee recognizes the invention. If not, the inventor will be asked to modify the application before it is submitted for a second evaluation. The patent application will proceed upon the recognition of the committee. If the invention did not get approval from the committee for the second time, the inventor will have to submit a memorandum to the President of NHRI for reconsideration of the invention for patent application135. In other case including trademark application, exclusive licensing application and academia-industry collaboration application, all application must be submitted to the committee for evaluation before it could proceed136, 137, 138.
The main technology transfer activity NHRI TTO handles is technology
•‧
way as it relies on the submission of patent application by researcher, but not explores interesting invention actively. However, the Director and members of TTO will participate in the annual research report by each institute in the NHRI in search for potential target for patent application. According to Zhang (2006), though NHRI is building its own industry database, TTO prefers the collaboration bond between industry and academia being cultivated by inventor, because NHRI believes that inventor best understands the potential market and investor, thus it would be most efficient for the inventor to provide information for the academia-industry network.
Besides that, TTO will promote potential licensing technology to the market through website announcement, participating local & international biotech conference, organize joint research progress conference with Academia Sinica & National Taiwan University139, or by giving public talk.
According to the description of NHRI TTO, the aim of NHRI technology transfer is to efficiently apply NHRI research outcome and increase the value of invention application. It aims to turn research outcome into products or services that are valuable to the market. By such initiatives, it could speed up the improvement of Taiwanese industry techniques to increase the nation’s competitiveness, to create mutual benefit relationship between academia and industry, and to improve Taiwanese living quality140,141.
During the early phase of licensing, licensees are being privileged to pay lower royalty rate or in exchange certain percentage of Licensor Company’s share to NHRI.
This privilege is to allow licensor to market the licensed product with a smaller fund with lower burden. Once the licensed products are on the market, NHRI would charge a
139NHRI, Academia Sinica and National Taiwan University hold joint research progress conference (Part I) (2009), National Health Research Institutes, Retrieved from
http://enews.nhri.org.tw/enews_list_new2_more.php?volume_indx=322&showx=showarticle&article_indx=738
•‧
國
立立 政 治 大
㈻㊫學
•‧
N a tio na
l C h engchi U ni ve rs it y
higher royalty rate to its licensor to make up its lost due to lower royalty rate charged earlier142.
Royalty revenue derived from licensing is divided among inventor, research institute and NHRI. According to Paragraph 17 of MOHW Intellectual Property Management Guideline143, 60% of the revenue derived from government-funded research outcome should be channeled back to Taiwan National Science Technology Development Fund144 to further subsidize future research grants. 40% of the balance revenue would be distributed to inventor (40%), inventor’s institute (20%) and NHRI (40%)145.