The reform of the Italian Industrial Property Code: New opportunities for technology transfers in the Life Sciences sector
Technology transfer – transferring knowledge from scientific research to productive and industrial sectors – is an essential element of innovation exploitation processes. Having a proper system of research incentives makes it more possible to employ research results for commercial use, while also encouraging industrial development.
A notable example is the United States, where the Bayh-Dole Act was introduced in the 1980s. The Bayh-Dole Act transfers control over the economic exploitation of inventions from privately funded research to universities and research-funding companies. So, in the US, it is possible to grant structurally organised subjects the right to exploit innovations developed in the university environment, facilitating cooperation between the research activities and the production sector.
As a result of the Bayh-Dole Act, the US has created the most efficient technology transfer system in the world: it is estimated that the contribution of technology transfer to the US gross domestic product in the 20 years between 1997 and 2017 was almost USD900 billion, with more than 6 million jobs generated. Focusing on the life sciences sector, many vaccines and new drugs were created in the US during the same period thanks to technology transfer and public-private partnership systems.
The situation is not as favourable in Italy (and other European countries).
Italy has an excellent basic research system in many areas, especially life sciences. Italy is among the top countries in terms of the number of quality scientific publications, ranking seventh (eighth in terms of the number of most cited articles), according to the report “Dynamics of scientific production in the world” published by Hcéres, the French body for the evaluation of research and higher education. Similarly, Italy is a country with an industrial vocation with a strong propensity for technological innovation, ranking eleventh in the world for patent filings in 2023.
When taking into consideration the life sciences sector alone, more than 600 new startups were established between 2021 and 2023, with more than EUR 2 billion in investments. The fastest growing area is biotechnology, followed by MedTech, digital health, and life sciences services1. Among other things, the life sciences sector is destined to intercept a significant part of the Italian resources of the PNNR (Piano Nazionale di Ripresa e Resilienza), with the possibility of attracting further resources from mission 4 of the PNNR, dedicated to technology transfer, which has a ceiling of EUR2.4 billion. Nowadays, more than in the past, financial resources are available to transform the national heritage of scientific and technical knowledge into economic value for the entire country, and technology transfer is an effective tool for doing so.
But, so far, the Italian numbers on technology transfer activities have been limited. According to data published in recent research, in 2018, around 150 spin-off companies were established by universities and research centres, which employ about 400 employees in their Technology Transfer Offices (TTOs). In short, Italy is light years away from the US.
Part of the explanation is linked to the legal framework regulating the ownership of rights arising from university research activities. Until recently, Italy applied the “professor’s privilege”, i.e., the industrial property rights relating to patentable inventions obtained in the course of research activity were attributed to university researchers and inventors. According to a widely shared assessment, this system hindered the development of virtuous technology transfer models in Italy, penalising above all sectors like life sciences, which would have benefited significantly from an ecosystem favouring technology transfer. In recent years, numerous requests have been made to reform this legislation.
Well, now may be the time.
Law No. 102/2023 introduced significant changes to the Italian Industrial Property Code (IPC) and revolutionised the attribution of ownership of inventions obtained as part of university research activities, also by repealing the “professor’s privilege”.
The current wording of Art. 65 IPC grants to universities and research organisations ownership of the rights to inventions created by researchers, if the findings were made under an employment agreement or an employment relationship, including a fixed term one, with the university. The structures included in the scope of application of this Art. 65 IPC include universities, including non-statal ones, legally recognised universities, public research bodies, institutes for hospitalisation and scientific care (Istituti di ricovero e cura a carattere scientifico, IRCCS) and organisations that carry out research and promotion of technical-scientific activities on a nonprofit basis or in an agreement between the same entities. Art. 65 IPC has been aligned with what has been established – for the private sector – by Art. 64 IPC, which, under certain conditions, grants the employer the rights to inventions made by employees under an employment relationship.
Art. 65 IPC also introduced a specific mechanism to be followed for filing patent applications for inventions made by researchers, who are required to promptly notify the university or the research body of the subject matter of the invention. Within six months of the communication, the entity must proceed to file the patent application or inform the inventor that it does not intend to proceed. The option for the researcher to file the patent application in their name has become a residual hypothesis. In any case, the researcher is entitled to all moral rights to the invention, including the right to be recognised as the inventor.
In relation to the remuneration due to the researchers, Art. 65 IPC entrusts universities, public research organisations and IRCCSs with the task of regulating relations with inventors and the rewards granted for inventive activity, as well as relations with research funders from which patent inventions derive. The internal regulations of universities and research institutes must also regulate any other aspects related to the exploitation of inventions, as well as relations with other parties in research activities, such as students, and any research funders.
The reform of Art. 65 IPC should eliminate the difficulties encountered in exploiting inventions related to the previous regulatory framework. In many instances, the researcher who owned the rights to the invention did not have the means to protect and make the best use of the inventions resulting from the research activity. The new rules should make transferring new technologies to the production system more efficient and faster. As rightsholders, universities and research institutes will be able to approach the markets on an equal footing with private companies and invest in innovations that promise significant results.
Specific regulations have been envisaged for research financed by private parties. In particular, according to Art. 65 IPC, rights to inventions derived from research activities financed, in whole or in part, by third parties, will be governed by contracts to be drawn up on the basis of guidelines prepared by the Ministry of Enterprises and Made in Italy with the Ministry of University and Research (the Guidelines), adopted by Interministerial Decree of 26 September 2023.
The Guidelines have established general principles and indications aimed at guiding the drafting of agreements between academic entities and private funders, focusing mainly on the ownership of the rights of the findings generated by the research and on the exploitation of the results. The Guidelines also emphasise the importance of defining the confidentiality regime to which the information deriving from the research must be subject. In particular, the Guidelines have identified three types of agreements that may intervene in the relationship between research structures and funders: service activity contracts, development activity contracts and innovative research contracts.
In the context of a collaboration between private funders and universities, innovative research agreements, which are characterised by a pronounced propensity for innovation, are more relevant. The results of the activities envisaged by these agreements is expected to be patentable and the granting of ownership of the relevant rights should be adequately regulated in the contract. The Guidelines advocate for agreements to recognise the ownership of the intellectual property rights developed through the research to the academic organisations, providing for the transfer of the economic exploitation rights to the financing entity to exploit the results more efficiently.
Finally, under the new Art. 65-bis IPC, university institutions and institutions of higher artistic, musical, and dance education, public research bodies and IRCCSs may set up, within their autonomy, a Technology Transfer Office (TTO) aimed at promoting the valorisation of industrial property rights and inventions obtained through research and innovation. These offices should be staffed by personnel with appropriate professional qualifications to perform the necessary activities. They should operate as a point of contact with representatives of the industrial system to efficiently transfer knowledge and findings obtained through research to companies.
The reform of the legal framework for awarding ownership of researchers’ inventions is aimed at fostering more intensive collaboration between the public and private sectors to better enhance the development and exploitation of new technologies, also through technology transfer agreements. It’s hoped that this will be an opportunity to encourage renewed interest in research carried out by universities and the objectives to be achieved through such activities: universities and research facilities will have a greater interest in organising and promoting projects that are geared toward practical purposes and achieving innovative results. If adequately protected, these results can be effectively implemented and used in the industrial sector.
By improving the collaboration and flow of information and inventions between research facilities and business sectors through technology transfers, institutions should get a significant economic return, which should help to increase research funding. On the other hand, companies interested in innovation will have an incentive to invest in research, ensuring that they can economically exploit the findings of the activities they have financed through the provisions of the agreements with research institutions.
1This is the picture presented on 5 June 2023 in Milan at the panel between companies, the scientific world, technology, venture capitalists and institutions, entitled ‘Is Italy (or is it not) a country for innovation in the life sciences?’, promoted at the Museum of Science and Technology on the launch of Innlifes magazine.
