Oral evidence: Graphene, HC 960Tuesday 26 April 2016

Oral evidence, 26 April 2016.

Witnesses

Sir André Geim, Regius Professor, The University of Manchester, and Research Professor, The Royal Society, and Professor Luke Georghiou, Vice-President for Research and Innovation, The University of Manchester, gave evidence.

Chair

Sir André and Professor Georghiou, welcome to the table and thank you for coming to this evidence session. I saw that you were sitting in for the previous panel so you will have heard the evidence that was given. We will discuss some of the issues that have been raised so far, but I am aware that you have brought some samples. Perhaps you could start by setting the scene for us and giving the Committee a sense of how important graphene technology and the discoveries associated with it will be compared with previous breakthrough technologies, especially for the UK? Sir André, would you like to start?

Sir André Geim

It is probably a question for me. Let me try to draw a very big picture. If we look around ourselves, everything we have been familiar with in terms of materials has width, lines and thickness. Until 10 years ago, people were not even aware that there were materials that are one atom or one molecule thick, so it is a revolution in terms of new materials. Some people say that this material is as important as bronze, plastic, silicon, iron or whatever; maybe this is the two-dimensional age. It is not only one material. Graphene is now used as shorthand for hundreds of different materials that are equally very thin. We just name this group of materials graphene. Academically speaking, it is as big as it could possibly be. Ten years ago people did not believe in this material; they thought it was a blip on a computer screen of the human race. The situation has dramatically changed during, say, the last five years. Now it is widely accepted that this group of materials will be with us for many years—forever. It becomes a tool in our arsenal to explore this world. As for commercial opportunities, I am not a business oracle to predict the future of the graphene industry, but all the superlatives that the material has attracted—the strongest, the thinnest, the most conductive, the most pliable and so on—definitely indicate that there are many possibilities. People have suggested very revolutionary—I sometimes say science fiction—ideas. It remains to be seen. What we are witnessing now is the first stage of the commercialisation of graphene. It is probably less than five years since it was demonstrated that this group of materials could be obtained in tonnes and in square kilometres. People have started to look carefully at this material. There are dozens of companies in the UK, maybe hundreds or thousands around the world, looking into these materials and trying to figure out what is and is not possible. Most companies are focused on graphene, which came a little earlier than other materials. At the moment all applications are, frankly speaking, simple, dirty and marginal improvements, not the killer applications that everyone is talking about. This is the natural progression. Take the silicon age. It took between 20 and 40 years to study the properties of silicon in terms of fundamental research and applications. Then some very obscure applications came about, first ugly transistors, then simplistic circuits and so on. It took 50 to 60 years before we got our shiny iPhones. The same is happening in graphene. At the moment, there are marginal improvements in different areas: conductive composites, stronger composites, better tyres—people say that it has improved durability by a factor of two—better protective paint and so on. There are different companies focusing on different applications, but that is a natural process and we are at the very beginning of commercialisation.

Professor Georghiou

I would support what Professor Geim said. We are in an era of what you might call incremental innovations based around graphene, and a great deal more research and development will be necessary before the more radical properties can be exploited.

Chair

Can you explain, from the perspective of the university, what role the Government have played in R and D for graphene, and what has been their level of investment in Manchester so far? To your understanding, have the Government put any objectives or conditions on their investment, especially in terms of what the NGI is expected to deliver?

Professor Georghiou

The initial investment from the Engineering and Physical Science Research Council and the European Union was funding for the basic science that led to it. The university also put substantial early investment into the area, with its own resources. The scale-up of investment came after the Nobel prize when it was very clear that other countries were spending orders of magnitude more in supporting their researchers than the UK, and there was a Government decision to spend the sum of £50 million on graphene at that time. Of that, £38 million went to Manchester as part-funding for the capital cost of what is now the National Graphene Institute; the other £12 million was a competitive grant programme. It was only part of the cost of the institute, and we went on to make a case to the European regional development fund for the balance, as well as our own resources. In terms of attached conditions, the specific aims of the National Graphene Institute were principally to pursue research, and at the same time to train people—PhDs and others—for the research to engage with business. It is not in any sense a catapult. There has been catapult‑type funding subsequently for graphene—£14 million from Innovate UK to the Centre for Process Innovation—and we ourselves have taken the initiative to produce what we felt was a missing element in the graphene ecosystem by putting forward the project for the Graphene Engineering Innovation Centre. That attracted major inward foreign investment from Mubadala Industry of £30 million. They asked that that should be matched from UK sources. It went competitively into the Higher Education Innovation Fund competition, and was supported with further funding from Innovate UK and a couple of other sources. That probably explains the capital funding picture. I see from EPSRC’s evidence that they have a portfolio of about £88 million. That was our own calculation of what they are spending as well.

Chair

Thank you. You will have heard the previous evidence and seen the written evidence, as you just stated. A number of witnesses have made the criticism that academics are perhaps not best placed to make commercial judgments and establish commercial relationships; they do not have the necessary skillset by natural training, and that with graphene, as with other technologies, this can lead to missed opportunities and confusion in relationships. How do you respond to that allegation? Do you think it is well founded? If you do, what has the University of Manchester been doing to try to improve its expertise in the commercialisation of graphene?

Professor Georghiou

First, we would not expect our research scientists to be establishing the relationships with business. We employ professionals with very substantial business experience to do that. Of course, they do not define the science but they define the contractual environment and ensure that a proper system is put in place. Similarly, we have a wholly owned subsidiary dealing with intellectual property, UMI3, entirely staffed by professionals who are not on the university staff. It is a company with its own board, and by any measure it is seen as one of the UK’s top companies of that kind. We were contrasted earlier with Cambridge and Oxford. We work very closely with them; there is no distinction in our approach. Our professionals work closely with their professionals. We are always in the top five for spin-outs, and we perform well in licensing. You may have seen in the newspapers in the last few days the announcement of a very major deal for retinopathy, essentially a potential genetic therapy for blindness of a particular kind.

Chair

Can you explain to me how many research projects are currently under way at the NGI?

Professor Georghiou

I am not sure that is a number that exists in one place. I can tell you how many partners or companies the NGI is working with.

Sir André Geim

I am not in any administrative position in the NGI or the university, but I think there are 47 commercial partners.

Professor Georghiou

My colleague has informed me that there are 65 projects altogether.

Chair

They are working on 65 projects.

Professor Georghiou

Yes.

Chair

That is very helpful.

Graham Stringer

Professor Geim, we have talked a lot about the commercial exploitation of graphene, which is very important for the country’s economy, but how much has science in Manchester and the country benefited from your discovery of two-dimensional materials?

Sir André Geim

In what sense?

Graham Stringer

I am thinking of hard cash. We have heard that £38 million has been invested in the National Graphene Institute. Has there been a similar boost in science?

Sir André Geim

I am not sure I am answering the right question. Let me look at this from life—the social and economic perspective. Historically, universities have two major remits: one is education and the other is bringing basic knowledge. All of a sudden, big companies completely withdrew from long-term investment into curiosity-driven research. Government tried to plug this valley of death. Universities and big companies also responded. Universities moved in one direction and big companies moved even further, trying to leave everything to the taxpayer. Now we have a new situation where universities are going from asking questions to being held responsible for commercialisation, which has never previously been a remit of universities. There is nothing wrong with that. As universities we are publicly funded organisations, and of course it is Government and the taxpayer who own the remit of the universities, but because it is a recent situation this remit is neither adequately funded nor does it even have a legal basis. Graphene and NGI is a perfect example. It was first organised as support so as not to lose our advantage in a very competitive scientific field. It is supposed to be an academic institution, but the pressure from outside pushed the university to do something about commercialisation. All of it was done from the university’s coffers. There was an initial building and equipment for the university, but there are no running costs. It all comes at the expense of the quality of education and curiosity-driven research. In addition to the fact that research council initiatives are pushing more and more towards commercialisation, universities at a very local level are now starting to spend their money on commercialisation. It is done on a voluntary basis in the case of NGI. We have seen that there is a lot of misunderstanding or confusion as to what NGI is for. Five years ago, I got an inquiry every day from companies about what they could do with graphene and whether we could help. Fortunately, now all those inquiries end up at the NGI. I heard that there are 900 every year, so there are about four inquiries per day from companies. How are you going to deal with this? The university managed to find money for one or two managers who can speak the same language as the companies, but there is no infrastructure, so it is about adequate funding. We are not a graphene catapult. Graphene catapults are funded. We are not funded for that, so the money comes from somewhere else. There are the same concerns about the legal framework. Because it is a publicly funded body, how do we do commercialisation? Are we allowed to deal with, say, Chinese or Russian companies and others, or should we get our graphene only from British firms and deal only with British companies? All of that is open. Referring to The Sunday Times, it is ridiculous to ask a question about someone who deals with Taiwanese manufacture. If you are asking for commercialisation, you should provide a level playing field for the universities. This field has not been defined. One thing that I would like to come out of this inquiry is an acknowledgement of this new third remit for universities, which was recently imposed, partially voluntarily, and to think about how it can be adequately funded and how the legal structure can be dealt with.

Graham Stringer

That is a very interesting answer. I do not want to put words into your mouth, but effectively you are saying that the Government have provided a nice building but have taken resources from elsewhere in terms of the research needed within the university.

Sir André Geim

Absolutely.

Graham Stringer

You are a very clever man, so I am entitled to ask you impossible questions. If the UK was to establish itself as the most competitive country in research and commercial exploitation, how much more money would the Government have to put into science and commercial development?

Sir André Geim

You put words into my mouth. You probably know the answer. In terms of the science budget, you know the numbers better than I do. In the G8 we are in the last position, below Russia and Italy, somewhere on a par with Greece, I believe, whether or not it is acceptable. In addition, the same flat budget for many years has now been eroded by the drive for commercialisation and the research councils’ enthusiasm for it. There is nothing wrong with commercialisation; it should be done, but not at the expense of the quality of education and curiosity-driven research.

Graham Stringer

In terms of standardisation, I was surprised by the previous panel’s evidence. If I correctly understood what they were saying, it was that there was no support for the standardisation of graphene in two-dimensional materials. If that is correct, what should be done about it?

Sir André Geim

For me, standardisation is a very small element in the big picture of both the science and the application of graphene. Commercialisation stops many companies looking at graphene, because essentially people say they are producing graphene. It is just the same graphite powder with completely different properties. These days, some graphite mines go to public listing, claiming that they mine graphene rather than graphite. That is not so. It has become hyped. It is very important to get standardisation, not only in our country but in others. People feel the need for standardisation, but maybe it would be better to ask Luke and the NPL how much money is needed to do that properly.

Professor Georghiou

I think you have a White Paper jointly authored by our colleagues and NPL that sets out the need for an initiative in this area. This is a very direct answer to the question posed by this inquiry: what elements are needed to support the commercialisation of graphene? We have an incomplete ecosystem; there are other missing intangibles—for example, a well-developed venture capital sector that fully understands graphene and is able to invest in it. I would support that. At one end, you need standards to eliminate what André referred to earlier—the bottom feeders who pretend they have graphene when they do not—but it is much more important, as we go up the system, to ensure that there are proper trading relationships and to help those who are developing applications to know exactly what material they are dealing with.

Chair

In his answer Sir André spoke of some confusion, which was very interesting to the Committee. Is this confusion about the different roles of the NGI and GEIC? Most of our industry witnesses seemed quite clear about the different roles and seemed to understand TRLs and so on. Are you experiencing challenges in this area, or do you think there is no confusion?

Professor Georghiou

It is very difficult to disagree with somebody who has a Nobel prize and is talking about the subject they know more about than anyone else in the world, but speaking from a broader university perspective, we value our engagement with business. We had the highest level of engagement with UK business in 2013-14 and the second highest last year, and the third with SMEs as well. We are a university that, since its foundation in Victorian times, has been committed to working with business in our normal activities. That is where the National Graphene Institute is situated. It is part of the university. It is an institute because there are benefits from having concentration; it allows a better quality of facilities and, as we have heard, it allows a very clear signal to be sent not only to UK industry but around the world; and it helps, as it has proven, to attract inward investment to the country, but its prime mission is none the less not that of a catapult or a Fraunhofer institute. That job belongs to the Centre for Process Innovation and will in future belong, in a slightly different way, to the Graphene Engineering Innovation Centre.

Chair

Do you think industrial partners are clear about the different roles that the NGI, the GEIC and the Centre for Process Innovation will play?

Professor Georghiou

I believe so. We welcome criticism; it helps us to improve, but this Committee has heard a very concentrated dose of it from probably the only quarter at the moment.

Derek Thomas

You said that about a third of your engagement was with SMEs. How do you respond to the criticism you have heard this afternoon from some SMEs that they do not get fair access to the institute’s research facilities in comparison with your larger business partners?

Professor Georghiou

We said in our evidence that we find it easier to work with established companies. That is not necessarily a statement about size; we include SMEs in the term “established companies”, but they have to have a sufficiently developed infrastructure and employ people who are able to use the relevant science. Quite separately, we are putting a lot of effort into supporting start-ups. A number have been generated not only by our IP but our students. We have attracted funds to set up student-led businesses in the area of graphene, with some quite radical ideas, supported by very successful business alumni who themselves have founded global corporations. We work with SMEs. We try to direct them to support schemes. We heard discussion about the quick look earlier. That is modelled exactly on the Government’s SBIR scheme and is the entry point for it. We use it to try to take companies to get Innovate UK funding. We are not even allowed to provide a free service, other than friendly conversation and events, because that would contravene state aid rules; £50,000 may sound like a lot of money, but it would be what it costs us—we tend to work at cost—to employ a postdoctoral researcher to do the necessary work.

Derek Thomas

To continue that theme, to what extent do your partnerships with large businesses, and any confidentiality agreements with them, prevent you from working with SMEs? Do you understand the concern that some SMEs may feel they do not get fair access because of those agreements?

Professor Georghiou

I think it would be better to say that if there is a partnership with a business in a particular area and our researchers are working with one company, we cannot then work with another company in an area very close to that. It would not matter if the incumbent was a large firm or a small firm; that would be the reason. Indeed, that is the reason for the case you heard about earlier. I have to say that the 15‑minute response was to the second inquiry when the same material was submitted, so naturally it could be dealt with very quickly. The further email about being willing to meet was a courtesy to the Member of Parliament. We did not say we would change what we did in the project. If we were engaged with somebody already in that area, we would not be allowed to go further.

Derek Thomas

You referred to your support for start-ups and spin-outs, but in your earlier submission you referred to the fact they would come in at what you call the second or third phase, when the market begins to mature.

Professor Georghiou

Yes. That phase is now starting. We are not saying that it is something in the future. We have a group of those.

Derek Thomas

To a lay person like me, what is a mature market in graphene?

Professor Georghiou

As we have been hearing, it is probably characterised by a move from the first wave of companies, who perhaps overpopulated graphene manufacturing activity, to the engagement of those who make graphene with applications. This has been a theme we have heard in both sessions, but there is now a move to applications, which will feed back into manufacture as well; they are not separate. That is an example of maturity. Of course, applications will generate revenues for companies and allow real growth.

Derek Thomas

Do you think the opportunities for SMEs will suddenly become better now—the place will expand and the landscape will change for them?

Professor Georghiou

There are already opportunities for SMEs. Perhaps we need to distinguish research partnership, which is what a university can do, and sometimes perhaps commercialisation of intellectual property, and what you might call the diffusion of technology or extension services. There could be a role for Innovate UK and others to do more in helping companies learn about the knowledge that is already there and make best use of it.

Derek Thomas

Is it possible that one of the small SMEs that at the moment has not had access has the very piece of application you have been waiting for all these years?

Professor Georghiou

If they come in with something we can help with and we are not working with their direct competitor, which would be damaging for them, we would be delighted to hear from them. As my colleague said, we have slightly more than 1,000 inquiries a year, of which 600 are from businesses. We have a total of 250 academics, including postdocs, working in the area.

Jim Dowd

I noticed that both of you were sitting at the back of the room when we heard the first panel. You will have heard my questions to Dr Britnell about BGT’s relationship with a university. Can I ask about the other side of that relationship? Professor Geim, I noticed that you were not particularly complimentary about The Sunday Times article; you described it as ridiculous.

Sir André Geim

As you better than all other people will know, how can you believe some of the comments written by some journalists?

Jim Dowd

Indeed. We have been on the other end of that on many occasions. Could you characterise the university’s relationship with BGT?

Professor Georghiou

The relationship began as a larger-scale research collaboration in BGTM’s previous existence. It lost a substantial investor at a certain point and moved to its current position of project partner. We have shares in the company, as previously stated. That has allowed us to have strategic discussions, but those are kept completely separate from the relationship we have with them in projects, which is contractually bound. I would like to stress what you were told in the previous session. BGTM is not in the National Graphene Institute; it does not work specifically with the NGI and never has.

Sir André Geim

The relationship with BGTM came from experience, which was mainly with big multinational companies. During the last 10 years probably every single well‑known multinational sent its scout to my office. They come and go. They find that there is no immediate threat to their business and they can wait until small companies try these uncharted waters. Their standard model these days is to snap up those small companies. Small companies are important, as was emphasised again and again. This company in its previous incarnation as Bluestone—[Interruption.]

Chair

I am going to suspend the session until after we have voted and we are quorate. Sitting suspended for Divisions in the House. On resuming—

Chair

I apologise for the delay in restarting the session. Occasionally, democracy intervenes in our Select Committee proceedings, and I am afraid we cannot rush it. Thank you very much for your patience.

Jim Dowd

Before we were so rudely interrupted, you gave your impression of the relationship with BGT. You will recall that I asked Dr Britnell various questions. He said they now had no connections—I am not sure whether he was referring to Chinese businesses—certainly with the university in China. He also gave an absolute undertaking that they had not shared any intellectual property with any of their far east connections. From your knowledge, do you have any reason to dispute that?

Sir André Geim

I know the situation with BGTM. I was involved, mostly from the scientific perspective, with the whole story. I know the whole story. It is kosher; the university has done absolutely nothing wrong. I am surprised that we are repeating The Sunday Times allegations so many times during this session. The university investigated the story. I personally know the academic who complained. That person complained to me about other academics stealing academic secrets. The person also complained about another company, 2-DTech, which submitted evidence. That was a university company, which, essentially, was spun out by my former PhD, a postdoc. If I were a journalist and had the choice of making allegations against a university and a British company and a company with a Taiwanese element, which is translated as Chinese, I would probably select the second story.

Jim Dowd

There were two different organisations: one was Chinese and one was Taiwanese. They are not the same.

Sir André Geim

I know.

Jim Dowd

You must understand that if allegations of impropriety or wrongdoing are made to this or any other parliamentary Committee, there is an onus on us at least to examine it rather than ignore it.

Sir André Geim

I appreciate that.

Jim Dowd

Do you understand people’s reservations, when dealing with the NGI and the university, if the university has a financial interest and shareholding in one of the partners but not the others? Do you understand why people would be concerned, or is it entirely unreasonable?

Sir André Geim

You now go from one specific case to another. This was a very specific case after many years of frustration in dealing with big companies that did not want to do anything. Well before the Nobel prize and the NGI, I started pushing our PhD students and postdocs to start their own companies. I did not have shares in any of those companies and rejected any remuneration, but I am happy about how those companies grew. For example, Graphene Industries began in 2007 and is still trading. It was profitable from day one. As to 2‑DTech, another company, the story goes that I told the person who opened the company that from the next month they would either be unemployed, because I had stopped their contract, or start their own company and have all the support I could provide. This is the story of 2-DTech that eventually was taken over by Versarien. But those small companies did not want to grow. One of the things this Select Committee should probably look at is what stimulus you should give to PhD and undergraduate students to start their own companies, but that is another story. There was also frustration not only about the big ones but from our own start-ups. Then the companies came. The first one was BGT with a history of making real graphene products: touch screens for phones, batteries and transistors. The company burned $50 million trying to push those products to the market and went bust essentially. That was the predecessor of BGT. You obviously value a company with expertise, and that went bust. They learned something from that expertise, and they were the very first. Of course, there is some sort of special relationship with BGT and 2-DTech—we still have shares in both companies—from the simple fact that our students are working for those companies. That is also important. Let’s build an ecosystem in which those companies can work. I would not say that with the new companies coming about, or even with some companies sitting in the NGI; that special relationship has been lost, but behind every question there is a history.

Jim Dowd

You would say that people’s fear of a conflict of interest with university staff being on the board of a company is ill-founded.

Professor Georghiou

It is absolutely the norm. We have a number of academics who sit on the board, never in an executive position. They are there either to provide technical input or to take part in strategic level discussions. I would say it is quite desirable rather than something to worry about. In all cases, they have to go through a formal process of getting permission, in this case at the level of our board of governors. I looked for another example just to show that it is not a local practice. The lead graphene academic at Princeton University is on the board of a graphene material-producing company called Vorbeck, which was part-founded on IP developed at Princeton itself. It continues to license that intellectual property from that university. The company has set up a research centre in that university, and it works very happily with other companies. This is the pattern of driving technology.

Victoria Borwick

What a fascinating afternoon this has turned out to be. Can we go back a little bit to what you feel is the main role of the institute? Is it undertaking research or commercialising the technology?

Professor Georghiou

It is not really an either/or answer, in the sense that of course it has the principal role of undertaking research, but it is providing a bridging role. In the business case for our ERDF support, we undertook with the institute to increase the scale of graphene-related research, including applied research; to grow the talent pool, particularly of researchers; to collaborate with other universities and industry; to aid commercialisation; to support spin‑outs and start-ups; and to promote the role of the north-west of England as a leading centre for this activity. That was the formal list we worked to.

Victoria Borwick

Could you clarify for us what you think is the role of the Graphene Engineering Innovation Centre? Is the innovation centre the vehicle? What is the separation between the different bodies?

Professor Georghiou

It is a clear separation.

Victoria Borwick

Between that and the institute.

Professor Georghiou

Yes, otherwise we would not have sought a different model. In terms of the technology readiness levels map, it forms the final part of the bridge. There was a celebrated report by this Committee’s predecessor about that bridge. It allows the technology to be taken to demonstrator level, and in this case companies can work on the premises. The building design looks very fine from the outside, but it is fundamentally a large shed that can be configured so that you can do demonstration projects and scale up activities. That is its function.

Victoria Borwick

You said they had to be separate. Could you explain for the benefit of the Committee why they need to be separate?

Professor Georghiou

The Graphene Engineering Innovation Centre, as we have all politely called it this afternoon—in Manchester it is always called “the Geek”—is in a more commercial space. This morning, I saw a presentation on its construction; for example, it is liable for VAT, whereas at the National Graphene Institute, as a research place, the building was not liable for VAT.

Victoria Borwick

That is a physicality reason, but are there other reasons why they are separate bodies? Is it because one is research and one is development?

Professor Georghiou

Yes. One is development and more downstream activity. It will be expected to develop substantial consultancy contract income, so it is more in the catapult-type space.

Victoria Borwick

Is it available for a broader variety of people to use? Do people have to use one to use the other? Is there a distinction of users?

Professor Georghiou

We would be happy that you could graduate from one to the other, but it would certainly be open to those already at that scaled-up level to use the facilities.

Victoria Borwick

What progress has been made in getting the institute running at full capacity? Is it to do with the number of labs? Can you talk to us about how you see it?

Sir André Geim

As I said previously, I am not in any administrative capacity at the NGI, but I am an academic user of it. It was opened in April last year officially, but you will appreciate that there was a period of time during which academics moved in. Now it is over-subscribed. There are problems putting people into it. It is over-subscribed, and even the places that were supposed to be there for companies and so on are now being moved around. To be fair, the labs are not at full capacity; it is just the normal process of commissioning equipment and so on.

Victoria Borwick

Currently, it is fully occupied with the research function.

Sir André Geim

It is fully occupied. If anything is reserved, it is reserved for equipment we are waiting for.

Victoria Borwick

To go back to the university, what is the strategy on intellectual property rights for graphene? Inevitably, when things are being developed—this was touched on in the earlier session—that is what comes first. Is your strategy different from those of other universities and organisations? How do you see your role?

Professor Georghiou

In general terms, it would be the same as for other universities. We develop intellectual property in collaboration with companies. The normal situation would be that they have the full rights, usually by their sector, but we always keep the right to use it in further research, and sometimes to apply it in other sectors as well if any public funding has been involved, and we have not been bought out altogether, which is a rare situation. In terms of the intellectual property that ends up owned by the university, the royalties principally go to the staff who invented it. I think we have one of the most generous deals. The starting position is that 85% would go to those staff. They might trade some of that share in return for assistance in securing patents and so on. That is how it would work. I suppose that what would be different from what you might see if you were doing graphene research anywhere else is that we have the capacity to invest in early stage graphene propositions ourselves. We have two dedicated graphene intellectual property business managers in the institute, and we now have specialist staff in our IP company who understand graphene and related materials and are able to work on that. We previously developed 2-DTech as a vehicle but sold it to Versarien; it is now used in social media by Innovate UK as a frequent example of an excellent innovative start-up company. We have just started a new translational business model, which we call Graphene Enabled Ltd. We head-hunted an experienced executive to work in that. It will be a bit more of a demand-pull approach. The company will identify opportunities for graphene and seek to match that with available intellectual property.

Victoria Borwick

Are you involved with the intellectual property on all the things produced there, or in some cases are people just using your space and, therefore, they have the IP?

Professor Georghiou

There are not many external people using it. Of course, academic collaborators, if they come, will own their IP. As far as I know, there is one company based in the NGI—Morgan Advanced Materials, a large British materials company. They work with us on a joint IP project.

Victoria Borwick

You have some IP rights on almost everything that is produced there.

Professor Georghiou

Yes. Normally, when we work with a company we have some rights on the IP to ensure that the national interest in safeguarded. They would have all the rights in their sector based on what they paid for.

Victoria Borwick

In your view, how robust is the institute’s IP strategy? Have you had any way of stress-testing it, or testing it against other organisations?

Professor Georghiou

Absolutely. We cannot really say it is the institute’s IP strategy; it is the university’s IP strategy. The institute is simply a part of the university. We carry out international benchmarking every year, and have our strategy reviewed by an international intellectual property lawyer every two years. There have been two commissioned reviews specifically about graphene IP strategy. We wanted to nail the very ill-informed comments made about early patenting on graphene. These were done by extremely senior people in the world of IP. Both of them endorsed our general approach and made some small and very useful suggestions, which we have adopted.

Victoria Borwick

In a fast-moving field like graphene, is every two years sufficient?

Professor Georghiou

To look at the system rather than at the portfolio itself, yes. All individual IP decisions also involve external consultants and IP lawyers.

Chris Green

Professor Georghiou, are you aware of criticisms of the National Graphene Institute’s approach to seeking patents?

Professor Georghiou

Is this about the “whether graphene could have been patented at the beginning” story? My colleague was there before anybody.

Sir André Geim

That is a very long discussion. To answer shortly, at no point could graphene be patented before our first publication in 2003. Patents do not improve academic careers. Some academics publish too many patents, but in this particular case a patent was drafted. Then I had a communication from a multinational company that said essentially, “We are not interested in supporting this patent.” If I quote it correctly—it is written somewhere in the Financial Times—it said, “If this material turns out to be as good as it promises to be, after 10 years 100 patent lawyers will write 100 patents every day, and you will spend the rest of your life and the GDP of your little island”—I remember that part—“trying to sue us.” It was rude, but the point of view of that multinational was very educative, because it was clear that the material had applications; we could possibly envisage them at that moment, but not those that would come 20 years from then. Therefore, in a sense my personal decision to withdraw from patenting on the basis of the Nobel prize acknowledgment or paper was right. It probably saved the taxpayer £50,000. I have 10 patents or so at the moment for very specific applications that are defensible. They are not broad. If one patent can cover everything, why are there 10,000 around the world? You have to think about the cost of patents. Each patent costs £50,000 to support over its lifetime. You have to take a very specific decision about whether it is worthwhile; whether it is within 20 years, or whether it is defensible. That decision was completely right. Patenting is a very painful subject for me, not just this particular graphene patenting. Patents are a very inaccurate and artificial measure of success. Because it is so easy to get the number of patents, journalists quote how far the UK is behind China. We heard from companies what they think about Chinese patents. We are not behind; we are more selective in publishing. Maybe we have 1%, but using patenting as a measure of success is absolutely ridiculous.

Chris Green

How do you judge the quality of a patent? How do you judge that British patents are of a higher quality than those from other countries?

Sir André Geim

History will tell us later. There is pressure from the media and politicians to measure the success of industrialisation and commercialisation in terms of patents. We experience this pressure; all universities do. I have experienced it enormously over the last 10 years. I am human; I cannot resist all the pressures. If you asked me how many of those 10 patents I should have had, I would probably say three or four. I have 10. I doubt that six of those are really going to play anyway. Many universities experience that pressure. If this Committee held a special session about patenting by public funding bodies rather than hearing about it in this session, it would save taxpayers millions of pounds every year. Patents by public bodies are by definition a bit of an oxymoron. Patents are a defensive mechanism to defend your commercial product. Universities by definition do not produce commercial products. There is a contradiction. Many people say we need patents to protect our IP, but the pressure now is such that the pendulum is in the wrong place. That is what I am trying to say.

Chris Green

There is another aspect. Rather than going down the patent route, if you keep the knowledge in-house and keep it under wraps, so to speak, that knowledge within an institute or university builds up and it is very valuable to the university, but that means that perhaps the knowledge is not shared as much as it could or should have been.

Sir André Geim

Absolutely, but a university does not produce commercial products. To keep knowledge within the university and not give industry an opportunity to access it is self-contradictory as well. We have know-how and expertise, and that is what companies on one side appreciate in their interactions; other companies also appreciate it and want to use it. Around the NGI there is a unique ecosystem where we can help small companies and entrepreneurs to start graphene businesses. There are many graphene enthusiasts around, sometimes with science fiction ideas; they have heard that graphene is 200 times stronger than steel and 1,000 times thinner than hair, so let’s make a transatlantic bridge, or a hammock that will catch falling airplanes. That is what we want to be there for, but I return to the point I raised previously: there is no support to do this for the community of enthusiasts and entrepreneurs; it is all done voluntarily at the expense of the university and other funders.

Chris Green

When you say voluntarily, I wonder about the differences between the approach in Britain and the approach around the world. If you look at the number of patents around the world, is there more political pressure in some countries to demonstrate that the institutes and universities are doing something good, and it is a numbers game more than anything else?

Sir André Geim

Absolutely. We saw this scandal in terms of academic publications. At one moment the number of published papers was considered an example of how successful an academic was. It was pressure. Now quality counts more. In China, a respected company told me—not my words—that there are too many useless patents. This goes way beyond that. We do not want to take China as an example, but even in this country there is misunderstanding of the nature of defensive patents. This kind of contradiction in university patenting wastes a lot of taxpayer money.

Professor Georghiou

Some research has been done that shows a surge in patenting among certain Asian universities in the month before their annual report comes in, because any indicator is feeding back and disturbing behaviour. Some years ago I visited the research establishment of one of the best known US companies. They told me that they had not placed huge emphasis on patents until it started being reported in their shareholder briefings. From then on, they were under pressure simply to increase the number. As soon as you measure something, you affect people’s behaviour. To add a point about the initial patent—there is a further part to the story to complement what my colleague told you—there were in existence US patents that had completely anticipated this approach. The patent would not have passed the test at that time in any case, had we pursued it. It is interesting to note that the judgment is borne out, because those patents have not been commercialised; they were uncommercialisable.

Chris Green

Because of the cost of monitoring and enforcing patents, do you want to reduce the number?

Professor Georghiou

We try to be very selective in the ones we patent. We think the ones we have patented are important. Currently, it is costing the university £500,000 a year to maintain the graphene 2-D material patent portfolio. This will rise to £750,000 with the ramping up through the NGI. We have a fund to support universities in those activities—the Higher Education Innovation Fund—which is very important to us. Even though we are one of the biggest beneficiaries of it, because it is done on past performance, none the less it is a burden for us to carry. You could say that if we are spending this much on graphene IP we are probably spending less on other things that we should be looking after as well.

Chris Green

If the Higher Education Innovation Fund made more funds available, do you think it is likely that you would do more patents, or would you judge pretty much on the same criteria?

Professor Georghiou

At the moment we are spending everything that is needed on graphene because we feel we have a real duty there. You would probably see it more in biomedical patents or some other area.

Chris Green

Simon Howell left the university. What was the reason for that?

Professor Georghiou

Of course, it is up to him to say what his reasons were, but he—

Sir André Geim

I know the gentleman quite well. We agreed that he should start working for me from next week.

Professor Georghiou

He has moved from one organisation to another.

Sir André Geim

He is now coming back to the University of Manchester.

Chair

There are different cultures around patenting from nation to nation. I understand they have quotas for patents in China, but it is also a measure of academic success alongside citations and funding, whereas in the UK we do not really measure it. We measure citations and funding but we do not measure patents. I appreciate the points you have made, Sir André, about the political and journalistic pressure for patents, about misunderstanding and about the need to focus on quality. Is there something missing in our system that means that getting patents is too hard and too expensive for people who should get them? Are people who should be trying to get patents missing out because of something that is dysfunctional in the system? Do you think that is so, or is the system right and the correct number of patents is being filed at the moment? Are we or are we not missing opportunities?

Professor Georghiou

It is difficult to know what the right number is.

Chair

It is not the number; it is quality. Are we getting the opportunities? Is it easy enough? Are there players who are essentially priced out of the market?

Professor Georghiou

They are probably not priced out. Many institutions lose money on their intellectual property activities—as many in the US as in the UK. Probably our academic incentive systems are still not sufficiently rewarding those who produce valuable impacts by their research, which could be via patents or via other means. In that sense there are people who could probably take their work and push it more in that direction but who are not as incentivised to do that as they could be. The real reason why we have far fewer patents in the UK than in other countries is the fact that our three leading patent holders in graphene are all universities: ourselves, Oxford and Cambridge in that order. We might ask why business is not taking out more patents in the area. As discussed earlier, I would not say it is necessarily a measure of the quality of our graphene businesses—those we have are very good—but it probably is some indicator of activity or general level of interest.

Chair

Why do you think that level of activity is present in the UK compared with other countries?

Professor Georghiou

It is probably true for the wide front of high-technology sectors. If we look at other areas, the proportions would probably be similar. The exception is pharmaceuticals, where the whole existence of the area is dependent on patents.

Chair

In your written evidence you wrote that “income from industry has increased…as a direct result of anticipating the NGI coming on-line.” I know that the NGI had its formal opening last year. What is the timetable for its coming online, and what will that mean in practice? In addition, what is the timetable for the GEIC? It is hotly anticipated by the industrial witnesses who were here before you. Many are keen for graphene applications to get as much of a push as possible. What are those timetables?

Professor Georghiou

The NGI is now online. We could not wait for somebody to come to open the building, if you like, so collaboration started in other places and then moved in. The Graphene Engineering Innovation Centre—I may have to correct this answer afterwards—has passed design stage 1. We have also demolished a derelict building on the site where it is to be built. I believe construction will start later this year or early next year, and I think the online date is 2019. I am not absolutely sure, and I may have to correct that afterwards.

Chair

I thank both of you for coming to give evidence, and for your patience as we abandoned you for a big chunk of the session. You have helped us to try to understand some of the issues at hand, and taken us through questions with great patience. We might have a few follow-up questions. This is obviously a technical area, but it is a very important one for this area of growth in our science and technology sector. I hope you will be kind and reply to our questions and help us as we try to investigate how we can properly harness a very exciting technology for the United Kingdom. Thank you both for your time. Oral evidence: Graphene, HC 960 30