FAQs

The service is intended for employees of the University, but some contracts involve the subcontract of specialised services beyond the capability of the University employees. In such cases Consultancy Services will ensure that the subcontractor has appropriate insurance cover.

Consultancy is a voluntary undertaking and therefore the University does not contribute directly to the support of Consultancy Services. The service provided by Cambridge Enterprise is funded entirely from the 12.5% management fee it adds to the cost of consultant and facility fees; this is equivalent to 1/9th of the fee charged to the client.

Consultancy rates vary depending on a number of factors, such as the level of experience of the consultant, the nature of the work being delivered, the extent to which the work is specialist and the type of organisation that the client is.

For example, fees are likely to be higher in a situation where a professor is providing his or her advice in an area where they are regarded as a world expert, than for work that involves data analysis that could be completed by a number of different people.

When the work requires the consultant to use departmental facilities, the costs associated with using such facilities must be built in to the overall consultancy fee that is charged to the client.

Departmental facilities are charged at a commercial rate (a premium above the Full Economic Costing, or FEC) as agreed with the head of department or their designate. If the facilities require technical support then a University protocol (X5) will be used to estimate the FEC. The standard contract contains a University standard optional clause, which is used in cases where the client is happy to allow publication.

Consultancy Services deducts its management fee from income received and distributes the remainder according to the academic’s wishes. Any payment to the academic directly will be in response to an invoice. Similarly, payments to departments for the use of facilities by the academic in delivering the services will be in response to an invoice plus VAT. Any donations to the University will be by the Gift Aid process and must be declared before work commences.

Gift Aid is the name of the process by which Cambridge Enterprise donates income to University departments.

Once the management fee and direct departmental costs have been deducted from the consultancy project income, an academic can either take the remaining consultancy fee as a personal payment or notify us that he or she will not be taking it personally, in which case Cambridge Enterprise will donate it to the University for use in future research. It is imperative for us to be told at the start of a project if an academic does not want to take part of or all of the money personally.

The Gift Aid donation process is carried out twice annually.

CUTS stands for Cambridge University Technical Services Limited. CUTS is a wholly owned subsidiary of Cambridge Enterprise Limited and deals solely with consultancy contracts. It has no employees, and is administered by the staff of Cambridge Enterprise. University employees can work as consultants through CUTS. This has a number of benefits, including that by using CUTS the academic consultant may benefit from the University’s professional indemnity and liability insurance policies. Prior to the incorporation of Cambridge Enterprise in 2006, CUTS was a trading company wholly owned by the University of Cambridge, acting as a vehicle for the University’s commercial activities related to IP.

Please note, if you are a University of Cambridge employee who wishes to engage in private clinical practice work for the National Health Service (NHS), then all payments must be administered through CUTS.

In short, we cannot make guarantees. This is stated in the liability and indemnity clause within our standard contract: ‘The work comprised in the services is of an experimental and developmental nature. The client acknowledges that it has not relied on any representation or warranty that the services or deliverables will provide any particular result or outcome.’

IP only vests with the client once payment is made in full by the client. In general, it is accepted that the consultancy is fee for service work and that any foreground IP created will vest in the client. The Consultancy Services standard contract will ensure that:

• know-how is excluded from the definition of IP, since this cannot be unlearned by the academic
• the right is reserved for the academic to use the skill, know-how and expertise acquired in the performance of the services for the purposes of providing similar services to any other client and to use the deliverables for the purposes of teaching and academic research

When channelling consultancy projects through Cambridge Enterprise, academics are able to use their affiliation to the University and use the University address and letterhead for correspondence. When working in a private capacity, academics must use their home address and personal letterhead.

It is not possible for academics, whether working through Cambridge Enterprise or in a private capacity, to give permission to the external client to use the University of Cambridge logo. Use of the University of Cambridge logo in any capacity must be granted by the Office for External Affairs and Communications.

If the project has been channelled through Cambridge Enterprise then external clients are able to make a reference such as: ‘This report was commissioned by Company X and compiled by Dr Joe Bloggs of the University of Cambridge acting through Cambridge University Technical Services Limited.’ Otherwise external clients should not make reference to the University.

Publication is possible and negotiable but in truth it only happens in a small number of contracts. Consultancy Services’ standard contract contains a University standard optional clause, which is used in cases where the client is happy to allow publication.

Spinning out a new company can be an excellent way of commercialising technology developed at the University. Sometimes more technology development needs to be done before a technology can be sold and the funding of this development is outside the remit of traditional University funders such as research councils and charities.

Forming a new company can be the best way to raise this funding. It is important to note that forming a spin-out company is hard work for the founders and should not be entered into lightly; however, it can be a rewarding experience for University academics and can be an excellent method of commercialising technology.

Spin-out formation in Cambridge is unusual in two ways. Academics can opt out and commercialise the technology themselves and/or the University has its own seed funds that can fund new companies that emanate from the University. Cambridge Enterprise Ventures team has three levels of preference as to the types of companies that it funds:

1. Companies founded on technology owned by the University. These are inventions from members of the University who have opted into the Cambridge Enterprise ownership of the IP and services that it provides.
2. Companies founded on technology owned by current members of the University, that is, inventions from members of the University who have opted out of the Cambridge Enterprise system, or members who have made the invention outside of their normal activities within the University.
3. Companies founded by alumni who are leaving the University to develop ideas generated during their time at Cambridge.

This is done on a case-by-case basis, but the equity will usually be split between Cambridge Enterprise as owners of the technology (in return for licensing the technology to the new company) and the founders of the company. Founders may include inventors of the technology who will play an active role in the company going forward, plus any other management brought in to assist with the development of the company in the early stages. Factors influencing the share of the initial equity include:

• the nature of the licence
• the role of the University in the development of the technology
• the role of the founders in the development of the technology and the company
• the number of founders
• the terms and conditions of third party funders of the research that led to the technology.

Good faith negotiations will take place between the founders and Cambridge Enterprise, and any inventors who are not founders, to come up with an equity split that will give a fair financial return to all stakeholders and will incentivise the founders to drive the new company forward in the best way possible.

Sometimes it’s a good idea for the founders to agree among themselves, prior to discussions with Cambridge Enterprise, their relative contribution to the development of the technology and their planned contributions to the company going forward. This can sometimes facilitate the negotiations with Cambridge Enterprise about the initial equity.

The terms and conditions of a licence can be varied. Financial returns to the licensor normally include a combination of signing fees, milestone payments (both time-based and development-based) and royalties on sales of any products in the future.

However, with a spin-out company it is not always a good idea to withdraw cash from the business for such payments. In these cases, Cambridge Enterprise may forego some of these payments in return for founding equity (and vice versa).

Once the founding equity has been decided, the company will need to go out and pitch for investment. The University can invest in spin-out companies through the Ventures team at Cambridge Enterprise. If Seed Funds (and other investors) decide to invest, negotiations will take place between the investors and the company to ascertain the value of the company. Once investment is made, the original equity holders of the company (founders plus Cambridge Enterprise) are diluted accordingly by the investors.

Suppose two Cambridge academics decide to form a company based on their work at the University and there is one additional inventor who decides not to be part of the new company. During initial negotiations it is agreed that the equity split will be 50% to Cambridge Enterprise in return for the licence to the technology and 25% to each of the founding academics. During fundraising, Ventures decides to invest £500,000 and agrees that the value of the company is also £500,000. The equity split before and after funding would look like this:

Pre-Money

Founding academic 1     25%

Founding academic 2     25%

Cambridge Enterprise     50%

Pre-money value            £500,000

Post-Money (following £500,000 investment)

Founding academic 1     12.5%

Founding academic 2     12.5%

Cambridge Enterprise     25%

Seed Funds        50%

Post-money value           £1,000,000

(£500,000 original value plus £500,000 investment)

The above example is an oversimplification of what normally happens. The sums are rarely that simple and financial returns upon realisation don’t always mirror percentage ownership due to factors such as options and preference shares.

It is important to note that, while connected, equity held by virtue of the licence and equity held by virtue of investment are handled differently upon a realisation.

The ultimate goal for a spin-out company should be an exit. An exit can be flotation on a stock market or, more normally, an acquisition (via trade sale) by another company. In these instances the holders of the equity sell their equity in the spin-out company in return for cash. The founders will be paid for their equity and naturally keep the proceeds.

The realisation due to the seed funds will go back into the fund to invest in the next generation of University spin-outs. The realisation awarded to Cambridge Enterprise will usually be shared out to the inventors of the technology according to the University IPR policy.

Cambridge Enterprise holds equity in relation to any licence. The Chancellor, Masters and Scholars of the University of Cambridge hold equity in relation to any cash investment.

The terms of the licence are agreed at the outset. The licence is normally signed just prior to investment being made in the company. This is mainly due to logistical and efficiency reasons.

Many aspects will be similar. However, a licence to a spin-out normally has fewer cash payments in an effort to keep cash within the company.

Intellectual property (IP) encompasses the expression of ideas, information and knowledge. IP includes not only discoveries and inventions, but also music, literature, and other artistic works, as well as words, phrases, symbols and designs. In the University context IP can be considered as the outcome of research projects, collaborations, consultancies and other activities. At the University of Cambridge this is governed by the University Intellectual Property Rights Policy.

Intellectual Property Rights (IPR) are the legal rights protecting the owners of IP. The first owner of IP is normally either the person who invents, authors or designs the IP, or his/her employer (depending on the contractual arrangements governing his/her work). Commercial exploitation of the IP can occur directly by the owner of the IP, or by licensing the IP to be used by other companies. The most common types of IPR are confidential information, copyright, patents, trademarks and design rights.

IP and patent information

• UK Intellectual Property Office
• European Patent Office
• United States Patent and Trademark Office
• World Intellectual Property Organisation

Patent searches

• Espacenet
• Patent Lens
• Fresh Patents

Inventions are sometimes made by individuals, but often by groups of people working together. It may not be clear who the inventors are because it is not yet clear what exactly the invention is. Inventors are people who have made an inventive (non-obvious) contribution to the invention. Invention is not the same as authorship – the supervisor is not necessarily an inventor of work done by their students / post-docs, but we always advise a student to discuss inventorship with their supervisor before submitting an invention disclosure.

A patent protects your invention and lets you take legal action against anyone who makes, uses, sells or imports your invention without your permission.

The legal requirements for an invention to be patentable are:

• novelty – at least some aspects of the invention must be new and not described elsewhere in the public domain
• non-obviousness – the invention could not have been predicted by someone working in the field
• industrial applicability

When an invention is disclosed to Cambridge Enterprise, we assess its patentability against these criteria. Other elements are taken into account when taking the decision to patent a technology such as analysis of your market, competition and timing.

After your invention is disclosed to Cambridge Enterprise, we will evaluate its patentability. If your invention is patentable then a priority application is drafted by a patent attorney. Cambridge Enterprise acts on your behalf and liaises with patent attorneys during this process. The timeline as well as the costs of the patent process are summarised in the patent application process. Once granted, the term of a patent, or the time it is enforceable, is of 20 years from the initial filing.

Related questions:

• I have an idea, what do I do?
• Is my invention patentable?

Cambridge Enterprise works with inventors and patent agents to draft strong patent applications. Once an application is filed, we will manage all stages of the patent prosecution and administration.

We work with an experienced copyright lawyer in the University’s Legal Services Division to provide advice on copyright issues and to promote the effective commercialisation of copyright works (such as computer software).

Copyright provides the author or creator of an original work with certain rights concerning use of that work and governs use of the work by others. It arises automatically without the need for registration as soon as the work is created and recorded in a material form.

As a general rule, the first owner of copyright in a work is its author, who may, among other ways, license use of that work to another person or organisation for specific purposes and time period, or assign copyright (i.e. transfer ownership of copyright in that work to another person or organisation).

In essence, copyright is a property right and may be bought or sold, inherited or bequeathed, or licensed or assigned in whole or in part.

UK law recognises two forms of rights in databases – Copyright Designs and Patents Act 1998, Section 3A and Copyright and Rights in Databases Regulations 1997.

A database is defined as a collection of independent works, data or other materials which:

• are arranged in a systematic or methodical way, and
• are individually accessible by electronic or other means.

A literary work consisting of a database is original if, and only if, by reason of the selection or arrangement of the contents of the database the database constitutes the author’s own intellectual creation.

Examples of databases include telephone directories and timetables.

Like copyright, a database right is an automatic right which exists as soon as the database exists in a recorded form. Database rights last for either 15 years from the end of the year in which the making of the database was completed or, if it was published during that period, 15 years from the end of the year in which the database was first made available to the public.

Database rights provide the author or creator of an original work with certain rights concerning use of that work and governs use of the work by others. It arises automatically without the need for registration as soon as the work is created and recorded in a material form.

As a general rule, the first owner of a database right is its author, who may, among other ways, license use of that work to another person or organisation for specific purposes and time period, or assign the database right (i.e. transfer ownership of the database right in that work to another person or organisation).

In essence, database right is a property right and may be bought or sold, inherited or bequeathed, or licensed or assigned in whole or in part. The database right can apply to both paper and electronic databases.

Infringement of the database right takes place where a person, without the consent of the owner of the database right:

• Extracts (the unauthorised permanent or temporary transfer of the contents to another medium by any means or in any form); or
• re-utilises (making the contents available to the public by any means)
  all or a substantial part of the protected database.

There are a number of permitted acts which provide defences to claims for infringement. A database right in a database which has been made available to the public is not infringed by:

• data is extracted by a licensed user of the database for teaching or research, and not for any commercial purpose, provided the source of the material is cited
• extraction and reutilisation permitted when it is not possible by reasonable inquiry to ascertain the identity of the maker and it is reasonable to assume that the database right has expired
• the rights in the database have lapsed (after 15 years)

Design right can be used to stop someone copying your design. It only applies to the shape and configuration of objects.

There are two kinds of design right – non-registered and registered.

Non-registered design right exists automatically and protects your design for ten years after the design was first sold or 15 years after it was created – whichever is earliest. However, it is important to note that non-registered design rights are difficult to enforce and don’t provide very strong protection.

A design can be registered, which gives much stronger protection and is recognised as an enforceable right. Registered design right protects any aspect of your design (e.g. both shape and decoration), gives you exclusive rights to use it for up to 25 years, and makes taking legal action against infringement and copying more straightforward. Once registered, the registration number can be displayed on the design. Two-dimensional designs such as graphics textiles and wallpaper must be registered in order to be protected.

Materials may be created during your research (for example antibodies, proteins, DNA constructs, cell lines, microorganisms, plants and animals). These materials are tangible things that may originate in nature and there are legal rights associated with these materials.  Like inventions, the legal rights to materials can be transferred by agreement to other parties. These agreements may dictate what can and cannot be done with a material, for example, a material cannot be modified or sold commercially without permission of the creator. Some materials may be protected by patents.

Rights to any materials created during research at the University of Cambridge belong to the University staff member who creates the materials, subject to any third party conditions which the creators may have previously agreed.

A trademark provides a way of uniquely identifying a product or organisation (‘the brand’). It can be a name, word, slogan, design, symbol or other unique identifier.

A trademark can be registered to protect the brand. A registered trademark enables the holder of the trademark to:

• take legal action against anyone using the brand without permission
• display the ® symbol next to the brand
• sell and license the brand

To be registered, a trademark must be unique. It can include words, sounds, logos, colours or a combination of these. It cannot be offensive, describe the goods or services it will relate to, be misleading, be a 3-dimensional shape associated with the trademark, or be too common or non-distinctive.

A registered trademark will last 10 years, after which it may be renewed.

In the case of unregistered trademarks, it may be possible to take action against another party using a similar trademark, however this is much more difficult to prove than it is to defend a registered trademark. Unregistered trademarks may display the TM symbol next to the brand.

If a technology you are considering patenting is made public it is considered prior art, and this may prevent you from obtaining a patent.

A public disclosure is any non-confidential communication of a technology or research project. It can be an academic publication, a PhD thesis, conference abstract, poster or talk, information posted online or a publicly available abstract of a funded grant proposal. Grant applications are not typically made public but grant final reports can be made available to the public and would be considered a public disclosure.

At the University, conflict of interest (COI) is largely governed by the terms of the Financial Regulations found in Chapter XIII (Finance and Property) of the Statutes and Ordnances of the University of Cambridge. Please note clauses 2.3, 2.5 and 27.2, with respect to COI.

Further advice can be sought from the University’s Legal Services Division or Cambridge Enterprise.

A Confidential Disclosure Agreement (CDA) is a legal agreement covering how information exchanged between two or more parties will be treated.

These agreements are particularly important when you want to ensure that your information, knowledge or research results are held in confidence prior to filing a patent application, to allow a potential research or commercialisation partner to consider the merits of the idea, or to limit how the disclosed information can be used.

The Research Office deals with CDAs as they relate to research at the University, and can offer help and advice concerning confidentiality. The Office can put in place an appropriate agreement, where necessary.

If you are already working with Cambridge Enterprise you can complete an online form to generate a CDA. If you are not currently working with us, please refer to the Research Office. Further information can be found on our Confidentiality agreements page.

Any current job opportunities with Cambridge Enterprise will be advertised on our Work for Us page. You can also subscribe to our job opportunities newsletter to receive job alerts by email.