Universities should have complete initial control of intellectual property rights on collaborative research projects, says the Higher Education Funding Council for England. By taking this line it is heading for confrontation with the Confederation of British Industry.

In a circular to be issued to universities in two weeks, HEFCE will say that projects aiming to attract its generic research funding must have an initial contract that assigns the project's intellectual property rights to the institution. Eventual ownership can be decided at the end of project by negotiation between the firm and the university.

Generic research is defined as work which is widely applicable and where all the benefits of support cannot be captured by an individual firm or venture. In 1995/96, generic research funding from HEFCE will be Pounds 20 million.

Philip Wright, of the CBI technology group, says that the HEFCE ruling "will work as a barrier against collaboration". He said that the allocation of IPR should be decided between partners on a flexible, case-by-case basis, and criticised the HEFCE mechanism as "prescriptive".

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Simon Ritchie, universities research programme manager at British Telecom, said that the proposals "will not result in greater collaboration between industry and universities as HEFCE believes. Actually I think it will reduce it". Dr Ritchie is chairman of the Inter-Company Academic Relations Group (ICARG) whose members include Glaxo, ICI, SmithKline Beecham and ICL.

"The consensus view of ICARG is that regardless of policy, firms will still want to hold the intellectual property rights. They may pay extra for it or have the work done abroad. It is less likely now that we will want to be involved in generic research-funded work. Should universities be spending all that time, effort and money on filing and managing patents anyway? Is that really their job?"

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Gill Mackie of HEFCE's policy division said that collaborative contracts give universities no control over intellectual property despite their substantial contributions to the cost of projects. She said: "It is not fair that universities put so much into these projects and yet the sponsor walks away with the intellectual property and the institutions get nothing out of it."

Ms Mackie said that firms often hold exclusive rights to intellectual property that they do not even need, which can block any future work the institution may want to carry out with third parties. "The council felt strongly that universities should be given a legal framework to enter into third-party collaboration."

David Thomas, pro-rector of research contracts at Imperial College, London, said that the HEFCE's criteria for intellectual property was "sensible and will encourage mutual respect between industry and universities".