Written evidence submitted by Tim Harper (GRA0006)

I am an entrepreneur active in the field of nanotechnology. Over the past twenty years I have set up a number of successful nanotechnology (and graphene) based businesses (see https://www.linkedin.com/in/timharper). I have written about, commented on and analysed the commercialisation of nanotechnologies including graphene since 2000 (see www.timharper.net).

I have chaired national nanotechnology initiatives and designed funding programs. I have instigated research, commissioned, written and published highly cited reports on the economic potential of nanotechnologies and life sciences at Cientifica, the World Economic Forum and World Gold Council. My work has been used by governments and public policy organisations, the financial sector and international business in setting, defining and measuring effectiveness of R&D programs, technology policy and innovation strategy.

I am currently involved with three graphene related businesses:

• Co-Founder at G2O Water Technologies Ltd (www.g2o.co) , developing waste water treatment systems based on graphene coated membranes
• Director at Inclusive Designs Ltd(De-Heat) developing solid state cooling systems (www.inclusivedesigns.co.uk/deheat/index.html) and
• Consultant to Tamicare Ltd using graphene to enable high volume 3D printed wearable technologies (www.tamicare.com).

In addition, I have advised and worked with many of the UK companies involved in manufacturing, modifying or applying graphene.

Through my public and private work, I am very familiar with the issues involved in translating emerging technologies such as nanotechnology into an economic impact, while for the past twenty-five years I have worked closely with academic institutions around the world both managing research projects and licencing intellectual property.  As a result, I understand how academics and those in the commercial sector often have a different world view and motivation.

The issues raised by the recent Sunday Times article about the National Graphene Institute are nothing new. The UK has a long standing record of punching above its weight in terms of scientific impact while often failing to take advantage of those breakthroughs.  The oft cited excuse of lack of capital is not true, there is always funding for well managed innovative companies, ranging from Innovate UK grants through to angel investors and venture capital.

Part of the problem lies in the technology transfer mechanism, where UK universities take a bipolar approach. This involves either believing their own hype and claiming that every scientific breakthrough is commercially significant and can only be licenced to global players, or conversely having little or negative interest in interacting with the commercial world. The situation is worsened by the growing tendency of University press offices and scientific journals to announce research results in hyperbolic terms.

Many UK universities have arrangements with companies who have first refusal on new technologies. In some cases, this works very well but in the majority of cases this creates a barrier for other funders who may be more appropriate. I evaluated the possibility of a graphene based early stage fund last year but the message from several universities was that the combination of their existing mechanisms and relationships with third parties meant that there was no room for anyone else. As a result, many potentially exploitable technologies are rendered unavailable to the market.

Furthermore, there are special issues associated with getting nanomaterials such as graphene to market in the UK. The UK has an economy dominated by the service sector which has little use for graphene. The lack of large end users for whom emerging and disruptive technologies would be attractive, such as microelectronics or displays, means that there is a large disconnect between scientific research and the demands of the UK economy. The stimulation of innovative high technology manufacturing is the only way to provide an outlet for scientific breakthroughs in new materials like graphene. 

While the recent attention has focussed on the National Graphene Institute and the “benefits and disbenefits of the way that graphene's intellectual property and commercialisation has been managed,” it would be unfair to single out the University of Manchester for criticism as this is a UK wide issue.

Lessons from History

Graphene is a nanoscale allotrope of carbon along with Fullerenes (Buckyballs) and carbon nanotubes. A look at the last twenty years should have provided sufficient warning that the “build it and they will come” model of technology push does not work.

The award of a Nobel Prize for the discovery of Buckyballs led to an explosion of interest in new carbon materials.  The Frontier Carbon Corporation was established in Japan in December 2001 as a joint venture of the Mitsubishi Chemical Corporation and Mitsubishi Corporation with the goal of becoming the world leader in the commercial production of nano-scale carbon products.[1]  The initial announcement claimed that Mitsubishi Corporation and Mitsubishi Chemical Corporation would make fullerenes available in commercially significant quantities beginning in early 2002 under a new joint venture to be known as Frontier Carbon Corporation.  While Frontier Carbon still exists, Mitsubishi Corporation sold 50% of the business to Showa Denko K.K. in January 2013[2], and fullerenes still remain a technology in search of a commercial application.

Carbon Nanotubes in common with many other nanomaterials, were a classic example of “technology push.”  This was illustrated in 2002 when the nanotechnology publication, Small Times, published an article on the original licensee of the patents filed by Rice University where much of the early work was performed headlined, “CNI has the brains, the cash, now all it needs is the market.”[3]  From Buckyballs to graphene materials, producers have faced the classic chicken and egg situation of there being no market until scalable production at economically viable prices had been demonstrated, while companies are unwilling to invest in production capacity until they know where the market is.

This trajectory of high expectations for a new nanomaterial, followed by massive investment, and subsequent failure to live up to expectations was repeated by buckyballs, carbon nanotubes and latterly graphene. The failure to take a rational view, starting with an unmet need rather than the technology, as led to the loss of vast quantities of public and private money in attempts to commercialise these materials.

In contrast to the hype, another significant factor In the inefficient commercialization of materials is the inability of academics to make a rational assessment of the commercial potential of a technology.

In an article in Chemical and Engineering News titled “Graphene’s global race to market” and published on April 11th 2016, Andrea C. Ferrari, director of Cambridge University’s Graphene Centre is quoted as saying that “it will take 10–20 years for graphene to move into regular commercial use.” Peter Budd of the University of Manchester “pours cold water on the idea that graphene will be all things to all products because ultimately, he says, it is too expensive.”

Andre Geim wrote in Nature in 2015 “Maybe one day, 5 or 10 years from now, it will bring real applications. Should I try to apologize for the lack of killer applications so far?[4]”

As many of those charged with commercialising graphene believe that applications will be decades away this raises a number of questions.

1. Do UK academics they know something about the commercial world that other UK companies commercializing graphene such as Haydale, Applied Graphene Materials, 2D-Tech and Thomas Swan do not?
2. Was any proper assessment made before almost £100m of public funds was committed to commercialising graphene in the UK? If, as is claimed the applications are decades away then would the money then not have been better deployed elsewhere?
3. Before deciding to invest large sums in commercialising a technology with an unproven market was reference made to the fate of similar materials such as buckyballs and nanotubes, and was a proper assessment made of the difficulties of commercialising new materials and steps taken to address this?
4. Are the right people with the correct skills and experience being charged with commercialising graphene? Why does this seem to be left to academics with no commercial experience?

The Missed Intellectual Property Opportunity

Clive Rowland of UMI3 states in an interview, answering a question about why the University did not patent graphene or any of its potential applications:

In the tech transfer office too, we had come to the view that the work was both too early to know what to do with it and too much of a rudimentary approach to be a useful manufacturing technique. We couldn’t see the commercial logic in either pitching for venture funding or offering technology licences based upon having a proprietary position on an “arts and crafts” method. No-one had shown any interest. There were no early adopters. So that told us something too. Thus we agreed with the academics that there was nothing worthy in trying to file for a patent for graphene by that route. That proved to be the right analysis[5].

This approach appears, on the surface, to be at best naive, at worst grossly negligent. While UMI3 have a good track record in other areas graphene seems to have been given a low priority until the Nobel Prizes were awarded.

Manchester vs The World

Other entities working with carbon nanomaterials such as Rice University, NEC, IBM, and Caltech all filed initial patents on carbon nanotubes to protect their early work. Some, such as the Rice patents were licenced to commercial entities while others such as CalTech’s basic composition of matter patent were never enforced so as not to hold back the entire filed.

The University of Manchester did not file any patents with a priority date before 2010 when interest in graphene exploded. By this time significant patents had been filed worldwide including 14 in 2005, 22 in 2006, 28 in 2007, 57 in 2008, 202 in 2009 and 455 in 2010.

A search on the World Intellectual Property Database, Patentscope, reveals that as of 14th April there were 35,139 patents worldwide covering the production and application of graphene. Of these the University of Manchester held just 22[6].

These include some very broad claims over the application of graphene in composite materials (IN1662MUN2014 (A), photovoltaic cells US2015083206 (A1) and the production of graphene and graphene oxide.

In the interest of balance, it should be noted that other UK universities did not apply for graphene related patents before 2010 either.

By contrast a single US University, Rice, had 11 patents and Samsung had 24 before by Manchester had filed one.

The Missed Opportunity

Andre Geim was quoted on 21st March 2016 as saying  “I only wish someone would use our IP or patents, but it is still too early at this stage of graphene development[7].”

The majority of of graphene in mass production around the world relies on the exfoliation of graphene, i.e. the separation of graphene which contains multiple layers of carbon atoms into platelets containing a few layers of atoms. This is a variant on Geim and Novosolev’s original method which the University claims was not scalable. Had a patent been secured on the production of graphene by the exfoliation of graphite this would have been a seminal building block patent, referenced by almost everyone commercially applying graphene. 

It seems incredible that such a fundamental building block should be left totally unprotected, and it should to be determined whether the University took any external advice or referenced the history of other carbon nanomaterials in making its decision.

In mitigation it should be emphasised that it is not the job of academics to envisage applications that may be a decade away and they are nor incentivised to do so. In the UK and the EU academics are evaluated on the number and quality of publications whereas patents are also considered in Asia. In Asia policy such as the Chinese Employee Inventions Act[8] incentivises disclosure and the creation of large numbers of patents (which may never be followed up by more expensive international protection). However, this strategy does help raise barriers to entry for foreign competitors in China and Korea.

Furthermore, there is wide variation on the performance of Technology Transfer Offices (TTO’s) around the world. The oft cited case of Stanford University and Silicon Valley is an outlier as demonstrated by multiple unsuccessful attempts to replicate the “Silicon Valley Model” elsewhere. The reality is that most TTOs struggle to cover the costs of evaluating, protecting and licencing intellectual property.

A technology transfer policy that encourages uptake of academic research by SME’s and ensures that Technology Transfer Offices have adequate resources to do so would have a positive impact on both innovation and industrial competitiveness of the UK.

The Lack of Interest in SME’s.

A 2013 report by BIS notes that “SMEs represent over 99 per cent of all private sector businesses, accounting for 59.3 per cent of private sector employment and 48.1 per cent of private sector turnover at the start of 2013. As well as making a disproportionate contribution to job creation they play a key role in growth by driving competition and stimulating innovation[9].”

A 2009 report by NESTA points out that “It is fast-growing innovative businesses that can challenge and eventually replace weak incumbents. They are the engine of creative destruction, driving long-term productivity growth[10].”

However, the partnerships instigated by the National Graphene Institute include Airbus, Akzo Nobel, Alpha, Areva, Bruker, DSTL, Dyson, GlaxoSmithKline, Huawei, Johnson Matthey, Lockheed Martin, Merck, the National Physical Laboratory, Oxford Instruments, the United States Office of Naval Research, QinetiQ, RB (formerly Reckitt Benckiser), Rolls Royce, Samsung, Sharp, Siemens, Syngenta, Tata, Tetra-Pak, and Thales.

While it is acknowledged that SME’s are the driver of growth and innovation, the National Graphene Institute has chosen to partner chiefly with large multinational corporations. These names may look good on the NGI website but has any assessment being performed of their value to the UK economy, or are Universities running such institutes for their own benefit as a way of subsidising research?

One SME, Inclusive Designs, inquired about working with the NGI and was told within 15 minutes that “Unfortunately, due to possible confidentiality issues with other projects, we would not be able collaborate with you on this occasion”

A Confused Message

There seem to be mixed messages coming from the NGI. While it is appreciated that the funding from, for example, the European Regional Development Fund, does come with strings attached, it is unclear whether the NGI is purely for academic research or whether   it is supposed to also lead to the commercialisation of graphene.  The situation is further confused by The Graphene Engineering Innovation Centre.

The NGI web site indicates several levels of collaborative research[11] with project sizes ranging from a “quick look”  for £50-100,000 to strategic partnerships in exchange for £1m a year for 3-5 years.

Fixing The Problem

On April 14th I authored a short article on this subject on LinkedIn[12]. While deliberately provocative the article did elicit a number of useful comments from a wide variety of interested parties which are produced below.

A report in Chemical and Engineering News, Graphene’s global race to market, highlights the difficulty of commercialising anything from UK universities. While the article reports numerous commercial opportunities being exploited around the world, British academics seem still rooted in their ivory towers.

It’s bad enough that we have academics from Cambridge and Manchester claiming that it will be decades before we see any commercial applications of graphene, which begs the question of why there are a hundred million pounds worth of investment going into Manchester’s effort to commercialise graphene now, rather than next decade?

More worrying is the complete ignorance of commercial reality. This is exemplified by a Manchester Professor quoted as being “irritated by media hype surrounding graphene, especially claims that a single layer of the material could act as a membrane for desalinating seawater” who then claims that “the current polyamide-based membranes that are widely used in reverse-osmosis desalination systems are pretty efficient already.”  Efficiency may be a relative term, but everyone we speak to about the graphene based membrane treatment technology developed at G2O seems to think that the very energy inefficient reverse osmosis prices currently in use leave a lot to be desired.

Instead of being irritated by hype it’s about time British academics stopped pooh poohing any commercial applications and either concentrated on curiosity based research or got out of the way of those trying to do the impossible.

Comments

“I feel the academic propensity to make ill informed commercial decisions is a consequence of the nature of science, as well as human nature, rather than a "more serious issue." Academics spend their lives building their knowledge in a particular field, but the scope of this knowledge typically excludes commercial issues (due to the nature of science). That doesn't stop these academics from extrapolating their knowledge beyond their immediate core of expertise (see "curse of knowledge," "overconfidence effect," "Dunning-Kruger effect," and "illusion of explanatory depth"). If the model of science was broader and extended into impact, the commercial decisions made by academics may have greater validity. We're not going to change human nature any time soon.”

“The attitude, if I am reading this article correctly seems to be like that shown by one of the country's most famous hoteliers; Basil Fawlty who believed, if it weren't for the guests, the hotel would run much better. Innovation, more often than not, has to serve a practical purpose and this realisation is paramount to make anything useful of it. What's the point in innovation if it is going to be restricted to the hallowed corridors of academic excellence instead of benefiting humankind?”

“This is an age old problem and not unique to the UK as already pointed out by others. Nor is it universal, i.e. some universities are far better than others. I've seen plenty of examples of this in both the US and the UK. It's engineers that tend to commercialise innovative technologies, and they tend to not be employed by universities. So, this shouldn't come as a great surprise. To be clear, there is much the government can do foster the speed and success of commercialisation, in many cases just getting out of the way would a good first step!”

“Absolutely good point Tim, my preliminary study also indicates that despite UK government investment into the 8 Great Technologies, almost all of Leadership    Groups in each of the 8 Great (advanced materials, robotics, agri-tech etc) fails to show and deliver a commercialisation plan for the great science and innovation. As such it fails to deliver commercial results, innovation leak to third parties without economic benefits. Government should be more pro-active in addressing the challenges and gaps in commercialisation of innovation and setting export trade strategy based on small companies.”

“Well said Tim. What a chronic lack of ambition. For 30 years we have focused on Universities being the drive for UK Innovation and some sort of panacea to our ills. They are actually a big part of the problem not the solution due to their political power with a nod to Science is Vital. Well in the UK its not. We need smart entrepreneurs and innovators and for Universities to just get out of the way and back into their boxes.  From the article " As it is, Vorbeck has two full-time patent professionals, formerly from DuPont and IBM, who file about four patents per month. “The goal is still to build on those early areas” of intellectual property, Lettow says."  The UK probably files about four patent applications a year with virtually zero commercial focus or worth. As far as I can see it is essentially game over for UK Plc and graphene....too little too late too amateur at exploiting.”

April 2016