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Awareness of Competition Law

Most interviewees were not aware that EU competition law might play a role in their job. Some said that it could indirectly influence their work as it could be relevant for contracts or tendering. One interviewee whose work concerned commercialisation activities remarked that, in such activities and with non-standard contracts, care had to be taken that the market was not distorted. Generally, however, areas of concern seem to have been implemented into university policy or would be dealt with by a separate legal/contracts team or even external solicitors who could be consulted if necessary. One interviewee mentioned that senior management made the final decision, if a problem was detected. Research offices would normally not apply competition law directly themselves and are thus often ‘not necessarily aware of what the competition rules are’.

Economic Activity

As has been explained in Chaps. 3 (Sect. 3.2.4) and 4 (Sect. 4.5), HEIs would have to be conducting an economic activity in order to fall under the competition rules. It was concluded that this is not likely to be the case regarding generic funding provided by HEFCE despite the recent impact agenda. The interviewees explained that research council funding can generally be divided into two categories; the responsive mode whereby the academic can apply at any time with any project falling into the remit of the respective council[1] and themed calls where a subject and a deadline for application is set. These still seem to be broad calls allowing the academic to decide about the exact project. An interviewee from a category 1 university explained this as the aim of the research councils being to strengthen the knowledge base and, ultimately the economy, generally rather than serve a more immediate goal. The academics would therefore compete on an academic level and the research council would pick the proposal most valuable for the public good. From this description, it does not generally seem to amount to a service which could be provided under market conditions and research funded this way would thus probably generally also not amount to an economic activity. One interviewee, however, mentioned that very large grants would sometimes be quite specific and come closer to a tender, something which might change this assessment.

Government departments usually have, according to the interviewees, very specific calls essentially commissioning research which would also often be classified as such and require declarations to be signed giving assurance that no anticompetitive behaviour is taking place. These calls, therefore, seem to be economic in nature. Other public funders might have specific as well as broader calls. With regards to third sector organisations, how specific the calls usually are would depend on the raison d’etre of the organisation. The WELLCOME trust, for example, would ‘come out with these really quite broad themes, but then the smaller charity that has been set up to look into a particular type of malignant tumour will have quite a narrow focus’. Judging from these descriptions, decisions would need to be made on a case by case basis on whether or not a call would amount to a service which could be provided under market conditions and thus as an economic activity.

In relation to collaboration with the private sector, the interviewees mentioned that all forms identified in Chap. 4 (Sect. 4.2.2.3) existed. They did not elaborate further on science parks which is perhaps explicable by this being a loose form of collaboration essentially amounting to a space where research takes place. As has been mentioned in Chap. 4, these would, in themselves, probably not constitute an economic research activity. Many interviewees talked about other looser arrangements for ‘keeping in contact’ including industry days, enterprise boards and research networks. More institutionalised forms of such arrangements might also provide funding to facilitate new collaborations. Some interviewees also mentioned strategic partnerships in which work was conducted collaboratively with a company on a regular basis which might go beyond research and also include employment schemes for graduates or access arrangements for technology. Research co-operations were described as general co-operations whereby research is conducted jointly in the longer term and the private sector contributes financially (e.g. through staff time or use of their equipment). Sometimes these would be supported by EU or national public funding sources, for example by the Technology Strategy Board[2] or the research councils. Collaborations increased through user-partners being required on ‘the impact side’. Networks, strategic partnerships and research co-operations would have to be regarded as undertakings conducting an economic research activity if the research could have been conducted on a market. Judging from the descriptions, this would, again, need to be assessed on a case by case basis with the stage of the research, openness of direction and predefinition of targets playing a role in such an assessment. The Commission has made very clear in the review process of the Research Framework that mere labelling of research as collaborative does not make it a noneconomic activity.[3]

The universities rely on academics to report innovations which they then exploit, often through especially established companies. Sometimes this might occur through spin-offs which, as some interviewees explained, initially will only exploit one patent, but they eventually added to their portfolio. Occasionally, venture capital firms invest in such spin-offs. In para 19b of the Research Framework, the Commission explains that licensing and spin-off creation are to be considered as non-economic if they are of an internal nature and profits are reinvested. As we have seen in Chap. 3 (Sects. 3.2.4.2 and 3.3.5.3) the combined reading of para 19 and para 15 of the Research Framework leave some confusion as to when exactly knowledge transfer is non-economic in detail. It has been argued there that the conception of competition law and the declared intention of the Commission in the Issue Paper[4] would indicate a narrow reading here requiring also that the knowledge has arisen out of non-economic research and is being exploited non-exclusively. If these conditions are not fulfilled the activities can be of an economic nature. According to the descriptions, both non-economic and economic exploitation seem to occur; the latter being especially the case where venture capital firms are involved. With regards to spin-offs and start-ups, whether or not their behaviour or university interaction with them amounts to an economic activity for the university, would also depend on how closely affiliated they still are with the university, how much private capital is involved and on the exact nature of their activity.

According to the interviewees, the universities would also have privately funded chairs, fellowships, post-docs or Ph.D. researchers. The interviewees explained that the latter can be fully funded, if the company had a specific project it wanted to be conducted. They might also be co-funded with additional research council funding. As part of such a project the Ph.D. researcher would then also sometimes be seconded to the company. Such Ph.D. studentships would be especially common in the (natural) sciences. If staff or Ph.D. researchers are essentially conducting a pre-described service for the private sector, this could amount to an economic activity. From the explanations provided by the interviewees, this might occasionally be the case, especially in some of the Ph.D. studentships. If the private sector is simply donating money to a chair in an area of interest and the holder of the chair can still determine the direction of teaching and research, this would probably not amount to an economic activity.

Finally, the universities conduct some activities which are more obviously economic in nature. In this respect the interviewees mentioned contract research, con- sultancy,[5] the leasing of research infrastructure, material transfer agreements when the university has created materials which a company is interested in (e.g. cells or compounds) as part of their research and data access agreements if companies want to access university data sets. Interviewees from two universities mentioned that such activities are mostly conducted through separate technology transfer companies owned by the universities. The universities might equally, require such activities from private sector undertakings.

  • [1] Within the responsive mode there would, however, sometimes be ‘highlight notices’ givingpreferential treatment to certain themes.
  • [2] Now called Innovate UK and envisaged to become part of United Kingdom Research andInnovation (UKRI). See further Chap. 4 Sect. 4.2.1.1.1 above.
  • [3] See Chap. 3 (Sect. 3.2.4.2).
  • [4] European Commission 2012, p. 7 seq.
  • [5] On the economic nature of consultancy see also Chap. 3 Sects. 3.2.4.2 and 3.3.5.3 above.
 
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