Opinion: Destination Waterloo? Or Destination Unknown?

The New Zealand Government’s science sector reforms aim to accelerate the commercialisation of publicly funded research by incentivising researchers to turn the intellectual property they develop into business opportunities. A key proposal is the development of a national intellectual property (IP) policy, inspired by Canada’s University of Waterloo and its “inventor-owned” Policy 73. However, this policy is designed for an entirely different ecosystem and may not work in New Zealand as intended.

Currently, New Zealand universities and Crown Research Institutes (CRIs) own and manage the IP developed within their institutions. In contrast, Waterloo allows researchers to own any IP they create, giving them the freedom to commercialise independently or with university support.

However, as Waterloo’s Director of Commercialisation Scott Inwood explained during a visit to New Zealand last month, the university’s success in commercialisation is less about its IP policy and more about its broader entrepreneurial ecosystem. This includes the world’s largest co-op education programme, proximity to global tech companies, and an entrepreneurial ecosystem of investors, accelerators, and entrepreneurs.

Inwood emphasised that Policy 73 is not the silver bullet behind Waterloo’s commercialisation success.

Encouragingly, the Ministry of Business, Innovation and Employment (MBIE) appears to recognise this. MBIE’s Programme Director for Science System Reforms, Iain Cossar, clarified in May that Waterloo’s model is just one option under consideration. The goal is to design a policy tailored to New Zealand’s unique ecosystem, not to replicate an IP model built for an entirely different ecosystem.

So, if the destination is not Waterloo, where are we headed?

The push for a national IP policy stem from concerns that IP commercialisation is either being stalled by institutional bureaucracy or being “left on the shelf”. While empowering researchers to commercialise their research is compelling, there are multiple ways to achieve this.

Waterloo’s IP policy is an example of an “Opt-In” model. This works well for engineering and software-based technologies that have a relatively short pathway to market (compared to the likes of biotech and pharmaceuticals). It also suits entrepreneurial researchers with the resources and risk tolerance to pursue start-ups. However, if researchers choose to opt-in, it introduces additional work and legal risk for all involved. Institutions must unravel complex issues of IP ownership across multiple parties before they can confidently proceed with transferring the IP rights to begin commercialisation.

Alternatively, other institutions like the University of Cambridge use an “Opt-Out” model. Here, the institution owns the IP by default, but researchers can license or acquire it on favourable terms if they wish to commercialise independently. This streamlines issues of IP ownership should the researchers wish to work with their institutions, while still empowering entrepreneurial researchers who wish to work alone.

The key distinction between Opt-In and Opt-Out models lies in default ownership. Both empower entrepreneurial researchers who wish to commercialise alone. However, Opt-Out models better support those researchers who may be hesitant or disinterested in commercialisation. If default IP ownership is vests in the institution, it provides some leverage to help to resolve inventor disagreements. In both cases, institutions have the necessary rights to take the lead in commercialisation, ensuring valuable IP doesn’t go unused.

Under an inventor-owned model, if a researcher isn’t interested in commercialisation, or the inventor conflict arises prior to opting-in, the institution lacks the authority and the incentive to negotiate a resolution.

In contrast, Opt-Out models incentivise institutions to invest in commercialisation efforts, even in cases where they may have to do the heavy lifting.

The challenge for New Zealand is to design an IP policy that balances the needs of entrepreneurial researchers with those who prefer institutional support. The following principles can help achieve this:

Minimise friction

A national IP policy should empower researchers to commercialise independently without creating barriers for those who prefer institutional collaboration. An Opt-Out model strikes this balance by granting researchers the first option to acquire IP rights on favourable terms. It also enables institutions to get on with commercialisation, without first needing to unravel complex ownership and assignment issues.

Align incentives with effort

Commercialisation is risky and hard work. The policy should reward those who take on this challenge. Institutions that support and invest in commercialisation should receive returns proportional to their contributions, especially those doing the heavy lifting. Similarly, inventors should be rewarded based on their input, especially those willing to pause their career and pursue a risky start-up.

Provide baseline funding

Government funding for commercialisation would reduce pressure on institutions to generate large returns to fund their commercialisation programs. This would also enable them to reinvest their returns in future technologies and attract skilled professionals to support commercialisation at their institutions.

Prevent IP from being shelved

Regardless of the chosen model, there must be mechanisms to ensure IP doesn’t go unused. If institutions or researchers fail to commercialise within a reasonable timeframe, the other party should have the opportunity to acquire the IP and take over commercialisation efforts. This ensures promising innovations have the best chance of reaching the market and benefitting New Zealand.

New Zealand’s science sector reforms present a rare opportunity to reshape the future of research commercialisation. Rather than adopting a foreign model, the country must craft a policy suited to its own ecosystem—one that empowers researchers, supports institutions, and ensures no innovation is left behind.

Dr Dan Carlisle is the Director Commercialisation and Intellectual Property at Te Kunenga ki Pūrehuroa Massey University. He’s deeply involved in Aotearoa New Zealand’s commercialisation ecosystem, supporting and funding commercialisation of New Zealand’s publicly funded research.

Originally published on NBR.