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As short-sighted politicians cut its budget, IP might provide some relief for cash-strapped CSIRO

Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) is one of the country’s great success stories. It was established as a publicly funded agency in 1926 and is a world-class R&D institution, operating out of dozens of sites in Australia and employing thousands of highly-skilled scientists and engineers. It has done globally important work in areas as diverse as agriculture, IT, climate change and life sciences. Now, however, CSIRO is having its funding cut, forcing retrenchment in sectors of coverage and staff numbers.

At a time when developed economies such as Australia’s are more reliant than ever on their ability to out-invent and out-innovate the competition cuts in CSIRO’s funding may end up doing much more long term harm than good; but putting that to one side, the organisation’s management has to live with the decisions that the politicians have made and must develop strategies that can accommodate them. And here IP could potentially play a very important role.

Alongside its world class R&D operation CSIRO has also developed an IP function that stands comparison to anything you’ll find elsewhere. We did an in-depth profile of it in issue 55 of IAM, published in 2012, and last year also named CSIRO as one of our Asia IP Elite. But it’s not just that the organisation is very good at IP management and strategy, it also has very good IP to work with. A couple of years ago it secured a $220 million settlement with a number of US companies in litigation relating to patents covering Wi-Fi technology (which subsequently, and ludicrously, saw some label CSIRO a troll); previous to this it also became the first non-practising entity to secure an injunction in the US following the Supreme Court’s eBay v MercExchange decision.

It’s not unreasonable to think that where WiFi leads there are many other areas that might follow. It’s also a matter of fact that when entities do find themselves under financial pressure a more aggressive approach to IP monetisation is often seen as a way of making up income shortfalls. Putting those things together, it would not be a surprise were CSIRO to be currently looking much more closely at licensing opportunities. That said, some recent developments may have made that a harder task. In March, for example, the Sydney Morning Herald reported a high-profile figure among a spate of lay-offs:

Among the three lawyers and three para-legals sacked on Wednesday was CSIRO elder statesman Terry Healy, a former general counsel to the organisation

Mr Healy led the legal actions, which recovered hundreds of millions of dollars, against many technology companies that cashed in on the organisation's invention of wireless internet technology.

Mr Popovski said the staff association had lodged an official dispute over the treatment of the legal team.

"There are hundreds of patents in CSIRO and they require legal defence of the intellectual property within them," Mr Popovski said.

"That's why we have this legal team, so we need to understand what's the so-called business case that Terry Healy and his colleagues have been given to get rid of them.

"But beyond that there is a question about the bona fides of the case to make them redundant.

"The WLAN [Wi-Fi] litigation project is continuing for at least six months, requiring quite a bit of legal work."

If the story is accurate and Healy’s redundancy has been confirmed it could make it more difficult for CSIRO to develop an expansive monetisation programme; harder, but not impossible. As this blog has discussed previously, one option open to universities and other types of research institution looking to increase the bang on their licensing buck is to partner on a privateering basis with third parties. In other words, they can work with other NPEs and outsource much of the monetisation leg work, including enforcement, to them in return for a share of any spoils.

With its track record in both technology development and IP, it’s not hard to imagine that many NPEs would see forming a relationship with CSIRO as an attractive and lucrative prospect, while CSIRO itself would have the ability to dictate the terms under which a partnership might function. Of course, going after new licensing opportunities is not guaranteed to generate extra cash, but if someone else is bearing most of the risk and you want to maximise your IP income, why not go for it?

Australians have funded CSIRO for a number of decades and CSIRO has done sterling work in many areas. The organisation has every right – in fact, it surely has a duty – to make sure it is paid the licensing fees across the world it is owed. Working closely with an NPE in the US and perhaps even elsewhere could help it to do that cost-efficiently. Further down the line, Australia’s politicians may have every reason to give thanks for such a move.   


Joff Wild
IAM Magazine
09 June 2014

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IP management, Licensing, IP politics, IP litigation, Patents, IP business

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