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  5. Guidelines for Universities’ Acquisition of Shares and Share Options etc. of their University-Oriented Venture Businesses Formulated

Guidelines for Universities’ Acquisition of Shares and Share Options etc. of their University-Oriented Venture Businesses Formulated

May 8, 2019

The Ministry of Economy, Trade and Industry (METI) considers it important to encourage universities to acquire shares and share options issued by their university-oriented venture businesses and thereby to accelerate business growth of university-oriented venture businesses (hereinafter referred to as “university-oriented VBs”). From these viewpoints, METI formulated “Guidelines for Universities’ Acquisition of Shares and Share Options etc. of their University-Oriented Venture Businesses - Focusing on Acquisition of Share Options Involving Licensing of Intellectual Property Rights.”

1. Background

University-oriented VBs are one of the methods available to universities to utilize and incorporate the results of their research, and the importance of such VBs is increasing day by day.

Newly established university-oriented VBs do not always have sufficient funds. Accordingly, if universities acquire shares or share options issued by their university-oriented VBs that include licensing of intellectual property (IP) rights, the income from sales will be returned to VBs and universities instead of outside parties. In addition, income gained from future sales of the shares of successful VBs is expected to help in the establishment of a new system that will contribute to the creation of next-generation VBs.

Compared to the cases in the U.S. and other countries, very few Japanese universities have acquired shares or share options issued by their university-oriented VBs.

One of factors leading to this situation is considered to be that many universities have insufficient knowhow or knowledge related to the potential benefits of holding such shares or share options.

To address this situation, METI conducted interviews with universities and university-oriented VBs inside and outside Japan, held discussions with an expert committee and went on to formulate “Guidelines for Universities’ Acquisition of Shares and Share Options etc. of their University-Oriented Venture Businesses - Focusing on Acquisition of Share Options Involving Licensing of Intellectual Property Rights.”

2. Key points of the guidelines

The guidelines are targeted to university employees whose work includes their universities’ acquisition of shares and share options. It provides basic approaches to engaging in these efforts in a well-organized manner.

Highlights of the guidelines are as follows:

The guidelines are targeted to the employees of national and public universities whose acquisition of shares and share options are regulated under laws and regulations. However, the guidelines also present referential information useful for private universities.

References

Division in Charge

Industry-University Collaboration Office, Industrial Science and Technology Policy and Environment Bureau