How can manufacturers and universities join forces on decarbonising and fuel switching?

Following the close of the 26th United Nations Climate Change conference (COP26) held in Glasgow recently, the media spotlight has yet to leave UK’s ambitious plans to transition to net-zero by 2050.

As part of these plans, August saw the government launch the UK’s first hydrogen strategy, aiming to attract £4bn in private investment and achieve 5GW ‘low carbon’ hydrogen production by the end of this decade. This was hot on the heels of the EU's own Hydrogen strategy issued during summer.

Fossil fuels are relied on to power transport, heat homes and fuel heavy industry and as a consequence, are responsible for four-fifths of global greenhouse gas emissions. So, the fact that, when burned, hydrogen emits only water, means switching to hydrogen as a fuel is a central and valuable tool in the UK’s plans to decarbonise.

Hydrogen can be produced in various forms, and be stored, liquefied and transported via pipelines, trucks and ships. The question of whether it is blue or green hydrogen is central – blue is fossil based with carbon capture technology, and up to 90% of emissions captured and stored or reused – green hydrogen is produced by electrolysis using renewable energy sources such as wind and solar therefore producing zero carbon.

In an effort to bring together content and funding opportunities across the seven UK research councils, Innovate UK and Research England are being brought together under one website – the ukri.org - consolidating grant opportunities across different research councils and areas such as hydrogen in one space.

In September the government also launched an Industrial Fuel Switching competition, aimed at supporting innovation for pre-commercial fuel switching technologies to make the move to fuels such as hydrogen, as well as low carbon electricity and biomass. £55m funding is being awarded through Small Business Research Initiative contracts to help develop a wide range of solutions. The government's Net Zero Innovation Portfolio provides information on funding for low-carbon technologies and systems.

Fuel switching: A driving need

1. A perfect marriage?

The drive to switch fuels and lower emissions is an obviously ripe area for collaboration between manufacturers with academia. Manufacturers looking to reengineer their processes in order to switch fuel and lower emissions can benefit from the depth of knowledge academic research departments are able to provide along with their cutting edge knowledge of new materials. Universities have departments dedicated to the commercial development of the institution’s research outputs, often known as the Technology Transfer Office.

So while the government’s message is clear: collaborate to innovate to decarbonise, and, it could be said, the depth of knowledge from a university, paired with the breadth of commercial know-how of a manufacturer is a perfect marriage, if a manufacturer hasn't worked with a university research department before on R&D projects at all, let alone on such a central issue as fuel switching, how can such a relationship be negotiated and captured in a collaboration agreement to the satisfaction of all parties?

As one might expect, entering into a collaboration agreement will throw up specific challenges for manufacturers and universities alike since the parties may need to use each other’s know-how, intellectual property and technology to develop the product, process or idea. Such agreements will need to carefully consider how rights are licensed and/or assigned particularly because all parties may be reluctant to divulge their know-how, especially in circumstances where competitors may be joining forces with a university.

In a recent Irwin Mitchell panel podcast looking at how manufacturers and academia can best work together, Geoff McFarland, Director of Group Technology at British engineering company, Renishaw plc, emphasised how important it is for manufacturers to understand what universities will want to achieve at the outset:

“We try and see the collaboration from the other side of the coin; in other words, what is the academic department or university/school or whatever trying to get out of it? What do they need to get out of it? And in general, what’s happened for us is the ones that have worked really well have been long-term relationships and also have developed into strategic alliances”

And the benefits of those partnerships are far from being one way as Graham Cockerham, Professor of Engineering Design at Sheffield Hallam University points out, universities need to seek these relationships with industry since,

“Most research reports need to be able to show the impact of that research in an industrial context. So there is a requirement, if you like, for academia to seek out opportunities to apply their research knowledge into manufacturing.”

For manufacturers, understanding that universities will be looking to publish and thinking ahead to iron out issues around how to deal with commercially sensitive information is key, as Professor Cockerham adds “in those circumstances, in fact, things like patents can be seen by university senior managers as the equivalent of a publication. So striving towards a patent is quite a useful thing for academic staff to do.”

Manufacturers will want to have their house in order to make sure that any intellectual property rights that need to be filed are done so in a timely matter to allow the university to publish the research.

2. Background and Foreground IP Rights

Inevitably the podcast discussion turns to the challenges of defining background and foreground IP rights, which Alex Newman as an IP disputes specialist has seen come up time and again as a potential area for disagreement.

Any IP rights a manufacturer owns or which are licensed to them prior to or outside of the specific project they want to join forces with a university on, is 'background' IP and it is essential that

• All parties sign up to a mutual Non- Disclosure Agreement prior to any know-how or technical information being shared
• Each party is able to define what they consider to be their ‘background’ technology and the IP rights in it. This is essential for distinguishing pre-existing knowledge and rights from future improvements and developments as a result of collaborative efforts. Parties can benefit from conducting or updating their own IP Audits to clarify the background IP they anticipate contributing, prior to entering into an NDA.
• Each party documents their role in the collaboration – what existing know how IP rights and tech does each role need to be able to play their part? Will parties want to restrict or ringfence certain assignments and licences to specified knowhow and tech?

Speaking broadly, for Stuart Padgham, Head of Commercial, there a few key issues in addition to addressing background and foreground IP rights for both parties to get stuck into addressing from the off. These focus on:

• Scope and Purpose: The important thing is having some idea as to the scope of what’s being done in the first place, a clear mutual understanding of the purpose of the actual endeavour, the timescale over which that endeavour is going to be taken and also, the funding resources that both parties need.
• Governance: Be prepared for new ideas to come up and creep in scope and purpose to happen; so ensure there is a rigorous governance process in the agreement to make sure that the project can evolve over time but in a way that references and is in keeping with the original scope and purpose of it in the first place.
• Indemnities: To the extent that anything generated or anything contributed does infringe a third party’s IP then normal indemnity protections will be needed in the agreement to make sure that the party that has caused the infringement is the party that deals with the consequences.

And finally, despite not wishing to bring negativity to the party or take on the role of prophet of doom, Stuart's message is don't forget the commercial equivalent of pre-nuptials and for both parties to

• Always remember to plan a graceful exit from the start

To hear Alex Newman, Stuart Padgham and our panel of experts discuss how to create successful partnerships between manufacturers and universities listen to Irwin Mitchell's Podcast on Manufacturers and Academia - Working Together Successfully, available on Podbean, Apple Podcasts, and Spotify.

Irwin Mitchell's Commercial and Intellectual Property expertise can be contacted here. We can also help with IP Audits.

“Most research reports need to be able to show the impact of that research in an industrial context. So there is a requirement, if you like, for academia to seek out opportunities to apply their research knowledge into manufacturing.” [Professor of Engineering Design, Graham Cockerham, Sheffield Hallam University]”