All national research and federal universities have been directed to become autonomous institutions.<sup>13</sup> However, start-ups from such not-budgetary institutions lose the special privileges and government support under Federal Law 217. Start-ups that fulfill MOES requirements<sup>14</sup> to belong to the Register of Notifications on Established Companies can use, for example, the Simplified Taxation System and get a potential reduction of the insurance contribution from 34 percent to 14 percent. This reduction would help start-ups lower costs to hire skilled labor.

The Russian legal regime for IP and technology transfer is developing incrementally as the Ministry for Economic Development and the MoES work on amendments to address inconsistencies and imprecision. According to government officials, Federal Law 217 is seen as a test to gauge the demand for publicly funded IP to start new companies. Yet according to experts, the market for IP in Russia is very small, there is no expertise for IP valuation and there is virtually no demand for IP from the market.

# **III.1. Research Commercialization through Technology Transfer Offices**

International experience shows that technology transfer offices (TTOs) may play a central role in accelerating the commercialization of public research. Their main role is to match the “universities’ supply” of potentially commercial ideas with businesses’ “demand” or needs. As such, TTOs are responsible for managing the IP that emerges from public research – evaluating its commercial potential, identifying potential users in the business community, and defining the best form of research commercialization (spinoffs, licensing, etc.).

To address the lack of information on the particularities of Russian TTOs, the World Bank and the MoES engaged in a joint initiative to survey existing TTOs in the Russian Federation. The survey was conducted between January and May 2011 covering the 112 registered TTOs by the MoES, with a response rate of 61 percent of the TTOs providing accurate contact information. The following paragraphs present the survey results.

The majority of TTOs were created between 2003 and 2008 and their emergence is not a consequence of IPR legislation, unlike the U.S. experience. Most of the surveyed TTOs, 81 percent, started operating before 2008<sup>15</sup> (i.e., before the main new IP laws were enacted). TTOs were initially established in 2003 on the basis of RAS institutions, universities, and public research centers in six federal districts. TTO creation is not a stated goal of the Russian IPR legislation (Part IV of the Civil Code and Federal Law 217). Unlike the United States where the initiative came from universities as an unintended consequence of the Bayh-Dole Act, in Russia TTOs have been set up by the MoES.

The average staff size of Russian TTOs is in line with comparable institutions in other countries. Russian TTOs had an average of 5.6 full-time employees in 2010. In the United States, TTOs are relatively small, often at most with five full-time equivalent staff (Phan and Siegel 2006).

The Russian TTO staff’s professional background is roughly a third each of businesspeople, university faculty, and university administrators. These proportions may indicate a healthy balance of the TTOs workforce. Several factors influence the success of TTOs, including finding a personnel mix with the appropriate scientific and business skills.

Inventors take full part in the licensing process, as reported by 75 percent of the TTOs. An important challenge for commercializing public research is balancing the interests of researchers and research

> 13 According to the Federal Law on Autonomous Institutions (No. 174, dated November 3, 2006).

> 14 The selected criteria of compliance with Federal Law 217, dated August 2009 including: 1.Completeness of information on companies as required by MOES Executive Order No. 718, dated December, 2009. 2. Results of ROSPATENT’s review. 3. Compliance with legislation (Civil Code, Part 4; Federal Law on LLC; Federal Law on Registration of Legal Entities).

> 15 TTOs around the world are relatively young institutions. For example in Japan over 90 percent were established after 1990 and even in the United States the TTO median age was only 12 years in 2006 (Phan and Siegel 2006).

23