Mr. William Beausang:

With the committee's agreement, I will summarise some of the key points in the more lengthy opening statement circulated to the committee by the Department.

We welcome the opportunity to discuss the Comptroller and Auditor General's special report on the development and disposal of intellectual property in FeedHenry by the Waterford Institute of Technology, WIT. As the committee will know, the Secretary General of the Department has assigned responsibility for this matter to me under the Public Service Management Act because he is subject to a conflict of interest. I am joined by my colleagues, Mr. Tony Gaynor, principal officer, and Ms Stephanie Goode, assistant principal officer, from the funding and governance unit of the Department.

Commercialisation of IP from public investment in higher education and research is a long-established Government priority. While lead policy responsibility resides with colleagues in the Department of Business, Enterprise and Innovation, the Department of Education and Skills and the Higher Education Authority, HEA, work closely with the Department of Business, Enterprise and Innovation and Knowledge Transfer Ireland to support the delivery of Government policy objectives to enhance the innovative capacity of the Irish economy to create employment and generate economic growth. It is essential that IP commercialisation by higher education institutes, HEIs, is undertaken in such a way that the interests of the Exchequer and the institution are appropriately safeguarded. This requires the existence and effective operation of a detailed governance framework that can respond to the complex issues that may arise during the commercialisation process, such as the management of conflicts of interest that may arise in the context of the spinning-out of a company with a HEI's intellectual property.

A detailed and comprehensive governance framework continues to be developed for the purpose of overseeing the operation of IP commercialisation in HEIs, and it has evolved considerably since 2004, when, as the Comptroller and Auditor General referenced, the first national code of practice for managing intellectual property from publicly funded research was published. A number of key milestones are mentioned in my written statement, including the various national IP protocols, the first of which, entitled Putting Public Research to Work, was published in 2012 and replaced, revised and updated in 2016. A further version, currently in the Department of Business, Enterprise and Innovation, will be subject to ministerial and Government approval in due course. These policy initiatives that focus on IP commercialisation have been complemented and reinforced in the overall broader governance framework in HEIs by the implementation of the various codes of practice for the governance of institutes of technology and the university sector, as well as the broader governance arrangements that have been introduced by the HEA to strengthen oversight and accountability within the sector.

Most recently, Knowledge Transfer Ireland and the HEA commissioned an expert international review of IP policies across the higher education sector, carried out by the consultancy firm, IP Pragmatics. The review concluded that all the HEIs examined have policies in place for IP management and employ experienced technology transfer and other dedicated professionals to carry out these important activities. The review made a number of recommendations, however, to improve the consistency of approach across the higher education sector, including highlighting the need to define a framework setting out the minimum components of good IP management in areas such as spin-out approval and conflict of interest management. Ten recommendations were made in the review to strengthen IP policies, management procedures and the management of conflicts of interest relating to the commercialisation of IP from HEIs in Ireland, and they are being implemented. The chief executive officer of the HEA updated the committee on progress made in his statement. The recommendations of the review have also informed the development of the new national IP protocol that I referenced a few moments ago and that is scheduled to be presented to Government for approval soon.

The Comptroller and Auditor General's report makes 11 recommendations, of which seven are the primary responsibility of WIT while four are the responsibility of the HEA. Having examined the report, the Department is of the view that there are significant issues raised relating to institutional governance and oversight in connection with the process for the commercialisation of IP in FeedHenry by WIT, as well as issues with the existence and effective operation of relevant policies, procedures and guidelines by the institute. The Department regards these issues seriously and, subsequent to the publication of the report, it engaged directly with the chair of the governing body of the institute. We have written formally to the chair requesting further information on a number of issues arising from the Comptroller and Auditor General's report. In total, the governing body has been asked by the Department to respond to a set of 16 questions, which were appended to the statement we circulated to the committee in advance of the meeting.

The Department's letter to the chair in WIT seeks to establish from the governing body whether the IP framework in place in the institute operates effectively and is sufficiently robust to prevent recurrence of the events set out in the Comptroller and Auditor General's report. Our assessment of that report is ongoing and we are seeking to identify any lessons learned from it that may be beneficial to the sector more generally through a further strengthening of the policy framework for safeguarding the interests of the Exchequer and institutions during the IP commercialisation process.

The responses to these questions and the further information received from WIT will inform the Department's advice and recommendations to the Minister on any further steps or actions arising from the findings and recommendations of the Comptroller and Auditor General's report. The governing body of the institute has acknowledged receipt of that letter and the Department expects a response from the governing body following its next meeting, which, I believe, will be at the end of January. The Department will assess the response from the governing body when it is received in preparing its advice to the Minister on the next steps for the issues set out in the Comptroller and Auditor General's report. The Department will also take into account any advice from the board of the HEA on foot of its consideration of the issues that we discussed earlier.

My colleagues and I are happy to answer any questions from the committee arising from its examination of the Comptroller and Auditor General's report.