We certainly have a system.
Let me first try to discriminate a bit about IP arising from procurement and the notion that industry will own that in some circumstances.
I think we have to realize that owning an IP and making a lot of money out of that IP are two very different things. Exploiting IP is a complex process. It is also a very expensive process. It's not because you own a patent that the next day you're getting rich. Even for companies getting that IP from procurement, it's one thing to have that IP and it's another thing to exploit it. Therefore, if an industry is able to make money out of that IP, I would submit to the attention of the committee that most likely that company has invested a lot of money to get access to the market coming from the particular IP that they got from procurement.
That said, it is complicated to exploit IP. Just because you own it doesn't mean you're making a lot of money. In fact, I would say it is the exception rather than the rule.
I would give you the example in the pharmaceutical sector where pharma companies own thousands and thousands of patents, but they make money on one patent in every few thousand that gets rewarded and results in a drug that will go into the marketplace. So it's complicated.
At the NRC, it is technology that we own because we generated it. We try to have a comprehensive analysis, and when we come to the conclusion that a company is interested in our IP and it fits into their business plan, it becomes a matter of how we define the royalty rates that we get. Obviously, being a producer of technology, our first impression would be that we need to get a lot of money from that technology, so we would be looking for high royalty rates, and sometimes from the start we can see that as a little bit unrealistic.
Let's suppose we would be licensing a technology in the field of energy. First, since some of that information is in the public domain, we would have access to the licensing contracts that took place in the field of energy. So we try to determine broadly what the industry is paying in the field of energy for a particular technology. Then we assess the value of our technology compared to what has been negotiated over the last few years. Is it technology that is much more advanced and therefore would carry higher royalty rates? Is it a technology that we'll be licensing exclusively to a company?
With exclusive licences, you have higher royalty rates because you do not have the possibility of finding other licensees. Therefore, the company wanting an exclusive right will agree to pay more.
If the company was satisfied with a non-exclusive licence, obviously they would ask to pay less because we have the possibility of licensing that technology to competitors. The company may say they do not really care as they feel that they are better than their competitors and they do not want to pay extra money to get exclusive rights and are satisfied with non-exclusive rights.
Once you define that sector as exclusive or non-exclusive, you will come to the conclusion that your technology has x per cent of royalty that you can generate. That's how we finally decide.