World Patent Information 32 (2010) 71–72

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Book review

Spin-Outs: Creating Businesses from University Intellectual Prop-erty, Graham Richards. Harriman House Ltd., Petersfield (2009).160 pp., £35, ISBN: 978-1-905641-98-7

The publishers Harriman House have a large portfolio of busi-ness-oriented books, including such titles as ‘‘The FinancialSpread-betting Handbook” and ‘‘The e-Bay Business Handbook”.With such a pedigree, it is hardly surprising that the present vol-ume has been written primarily with a financial and business read-ership in mind, rather than the typical patent attorney or patentinformation specialist. The emphasis from beginning to end is fo-cussed on the ‘creating businesses. . .’ part of the sub-title ratherthan the ‘. . .intellectual property’ part of the equation. That is notto say that the author does not deal with IP, but he seems – unfor-tunately to my mind – to have left un-answered a principal ques-tion which any fledgling business needs to address, namely, how toidentify its intellectual property in the first place.

This book is at its most valuable as an insider’s view of some ofthe commercialisation activities of Oxford University. Many read-ers of this Journal will be aware of the products of Oxford Molec-ular Ltd., which are now amongst the tools of the trade in thelife sciences research industry. Two major chapters (over 60 pages,or nearly half the entire book) cover the creation of Oxford Molec-ular Ltd. and its successor Oxford Molecular Group plc, and theseare rich in anecdote and comment on the, often tortuous, some-times serendipitous, route from temporary workshop accommoda-tion to a business which, at its peak, employed 400 people and held25% of the world bioinformatics software market.

In some ways, the book can be regarded as part autobiographyand part company history. The author was a director of Isis Inno-vation Ltd., Oxford University’s technology transfer company, fromits foundation in 1988, and founded Oxford Molecular Ltd. in 1989.He was later chairman of the IP2IPO Group, all the while retaininghis academic roots as head of the chemistry department at Oxford.His book illustrates time and again the value of a wide-ranging listof contacts from many different sectors of endeavour, brought to-gether into a single enterprise; I lost count of the number of timeswhen a new employee or advisor to Oxford Molecular turned outto be a former student, doctoral research colleague or academicor industry competitor. This in itself is no bad thing, but I suspectit could be a cause of frustration amongst a readership of noviceentrepreneurs, lacking such an impressive and established ‘old-boy’ network.

After an initial brief history of spin-outs, which includes men-tion of the impact of the Bayh-Dole Act in the US and the post-war creation of the National Research and Development Corpora-tion in the UK (eventually privatised as BTG), the author includesa chapter on technology transfer which traces the changes in Brit-ish academia in the late 1980s. The major emphasis is on thedevelopment of Isis Innovation Ltd., the Oxford Innovation Societyand the ‘boom years’ under their second managing director, TimCook. Whilst the results are clearly impressive, stated in stark ta-

doi:10.1016/j.wpi.2009.10.002

bles of numbers of businesses formed between 1998 and 2007,readers are left with an impression that much of the developmentcame from outstanding individuals with a deep knowledge of, inthe author’s own phrase, the ‘peculiarities and politics of universi-ties, especially the esoteric Oxford’. These factors are not alwaysreproducible, and leave the reader again wondering whether theycould achieve similar results. By way of contrast with the Oxfordexperience, a short section on the business model adopted by theUniversity of Leeds concludes the chapter.

Chapter 4, ‘‘Starting a spin-out company” includes some helpfulinformation on planning the manpower, investment and route tomarket, a kind of ‘pre-business plan’. This section goes consider-ably beyond the kind of guidance given to most small businesses,in that it includes an early consideration of dividing company equi-ty, raising finance and maintaining full legal documentation. Thematerial in this chapter could be expanded into a book in itsown right, but has been left at a somewhat brief 10 pages.

Following Chapters 5 and 6 on Oxford Molecular Ltd. and Ox-ford Molecular Group plc, respectively, the final substantive chap-ter includes the story of how the construction of a new chemistrylaboratory at Oxford was funded through the University’s spin-outstructures. A deal was arranged with a London stockbroking firm,whereby upfront capital for development was provided in returnfor a percentage of the University equity in all chemistry spin-outsfor an agreed period. Eventually, the experience led the firm to cre-ate IP2IPO, later the IP Group plc, which has an impressive historyof incubating many university-originated spin-out firms.

After a brief concluding chapter, the book closes with a numberof appendices listing a limited range of university contacts, sourcesof investment funding, legal and financial advice and furtherreading.

As a contrast to some business books which seem to consist ofenormous ‘‘do and don’t” check-lists, this offering provides a tale ofhow one university has actually succeeded in this field. However, Ifound myself frequently asking the question of whether they werejust exceedingly lucky, or there were transferable principles ofbusiness to be found in the story. There have been at least two de-tailed reports on spin-outs from academia, in 2002 from the Euro-pean Commission [1] covering all fields of technology and in 2005from the Chemistry Leadership Council and Royal Society of Chem-istry [2], devoted to spin-outs in chemical science. The latter inparticular highlighted the dangers of the ‘one-hit wonder’, whereuniversities form a spin-out in a first flush of enthusiasm, resultingin ‘‘too many companies. . ..formed on the basis of a single idea or pat-ent, leaving them with a weak base on which to establish a viablebusiness”. The same report notes that maintenance of adequate IPprotection is as important as making the initial filing, and says that‘‘We strongly suspect that the longer term budgets and resourcesneeded to properly administer growing patent estates are notclearly understood by some universities and that a crisis of IP man-agement may already be in the making”. Some parts of the EC re-port were similarly gloomy, although admittedly the Seventh

72 Book review / World Patent Information 32 (2010) 71–72

Framework Programme has addressed some of the issues ofhandling IP in European universities. It is clearly no trivial taskto take research from the bench and make a profitable businesswith long-term viability out of it, and certainly not to be under-taken lightly. This book is about a success story, but it does notprovide a comprehensive ‘how-to’ package. To follow in their foot-steps, other universities would also benefit from further specialistadvice, particularly in identifying and managing their intellectualproperty. My personal favourite in this field remains ‘‘Virtualmonopoly” by Christopher Pike [3], which was reviewed for thisJournal [4]. But for anecdotal inspiration, the current book providesan interesting counterbalance to many business books, written bysomeone who has actually been there and done it.

References

[1] European Commission, Directorate-General for Enterprise. University spin-outsin Europe – overview and good practice. Report EUR 17046. Luxembourg: Office

for Official Publications of the European Communities; 2002. ISBN: 92-894-3460-0.

[2] Fyfe D, Townsend R. Chemical science spin-outs from UK universities – reviewof critical success factors. London: Chemistry Leadership Council/Royal Societyof Chemistry; 2005.

[3] Pike CG. Virtual monopoly. London: Nicholas Brealey Publishing; 2001. ISBN 1-85788-284-9.

[4] Blackman M. In: Christopher G. Pike, editor. Virtual monopoly. Nicholas BrealeyPublishing; 2001. Hard back. 198p. Price £19.99. ISBN: 1-85788-284-9 [WorldPatent Information 2002;24(3):237].

Stephen AdamsUnited Kingdom

E-mail address: stephen.adams@magister.co.uk