VZCZCXRO7819
RR RUEHAST RUEHDBU RUEHDH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHSL
RUEHTM RUEHTRO RUEHVK RUEHYG
DE RUEHMO #0072/01 0141104
ZNR UUUUU ZZH
R 141104Z JAN 10
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 5917
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEKJCS/SECDEF WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHLN/AMCONSUL ST PETERSBURG 5579
RUEHYG/AMCONSUL YEKATERINBURG 3794
RUEHVK/AMCONSUL VLADIVOSTOK 3448
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHRC/USDA FAS WASHDC
RUEAUSA/DEPT OF HHS WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHPH/CDC ATLANTA GA
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RUEAEPA/HQ EPA WASHDC
RUEHC/DEPT OF INTERIOR WASHDC
RHFJBRQ/NSF POLAR WASHINGTON DC
RUEAFCC/FCC WASHDC

UNCLAS SECTION 01 OF 04 MOSCOW 000072 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR OES/OA, OES/STC, OES/PCI, OES/SAT, EUR/ACE, EUR/RUS, 
EUR/PGI, EUR/PRA, ISN/CTR 
OSTP FOR HOLDREN, ROLF 
STATE PLEASE PASS TO NASA, USAID, AND NSF 
HHS PLEASE PASS TO NIH and CDC 
USPTO FOR LAMM 
 
E.O. 12958: N/A 
TAGS: TSPL TNGD TBIO TINT KIPR KPAO OEXC SCUL SOCI PGOV
ECON, RS 
 
SUBJECT: MOSCOW STATE UNIVERSITY'S SCIENCE PARK SUCCESSFUL IN 
PROMOTING INNOVATION 
 
REFS: A) 09 Moscow 2885, B) 09 Moscow 2782, C) 09 Moscow 0333 
 
MOSCOW 00000072  001.2 OF 004 
 
 
Sensitive but Unclassified; Not for Internet Distribution 
 
¶1.  (SBU) Summary:  Over the past five years, Moscow State 
University's (MSU) Science Park has launched 85 high-tech start-up, 
mostly in the IT and biotech fields.  Raising awareness of the 
importance of IPR protection is a key MSU priority.  With its 
science park and other innovative activities, MSU is at the 
forefront of President Medvedev's efforts to increase innovation by 
commercializing research and producing the skilled high-tech 
specialists needed to modernize Russia's economy.  Even though they 
do not have MSU's powerful high-tech cluster or political clout, 
other universities and scientific institutes are still optimistic 
that they will be able to take good advantage of an August 2009 law 
that permits them commercialize research results by establishing 
small innovative enterprises.  End Summary. 
 
¶2.  (SBU) On December 10, Environment, Science and Technology, and 
Health section staff and Post's Intellectual Property Attache joined 
a visiting U.S. Patent and Trademark Office (USPTO) attorney on a 
visit to MSU's Science Park.  Established in 1992 with initial 
funding from the university, Ministry of Science (precursor to the 
Ministry of Education and Science), and private sources, MSU's 
Science Park is a joint stock company that stimulates innovation at 
MSU and in the Moscow region by helping MSU's 5000 students and 
scientists (including 170 Russian Academy of Sciences academicians) 
start businesses based on technologies developed at MSU.  The oldest 
of Russia's approximately 50 science parks, the MSU Science Park now 
brings in enough income from rent and its services to be fully 
self-sustaining.  However, both MSU Rector Sadovnichiy and Minister 
of Education and Science Fursenko remain on its Board of Directors. 
Its 2.5 acre campus includes an Information Technology Center and 
eight smaller buildings in which 2,500 employees work in 
approximately 45 high tech companies (60 percent in IT/software and 
40 percent in telecom, biotech/ecology and new materials).  Several 
MSU Science Park companies are well-known and profitable, including 
the DEC software center, REDLAB (part of Sun Microsystems), GARANT 
(producer of Russian legislation databases), Intelligent Security 
Systems, and three of Russia's most popular search engines: RAMBLER, 
APPORT, and NIGMA. 
 
--------------------------------------------- ------ 
Two MSU Successes: Nanocatalysts and Influenza Drug 
--------------------------------------------- ------ 
 
¶3.  (SBU) During a brief tour, Oleg Movsesyan, Science Park Chief 
Executive Officer, explained that MSU actively reaches out to 
prospective clients interested in launching high tech companies. 
MSU Science Park employees provide clients with information, 
training, fundraising support, advice in business plan development 
and IP protection, and even assistance in finding investment at 
every developmental stage, from idea to start-up.  Companies do not 
pay fees for services rendered until they have officially formed. 
The Science Park boasts impressive results; it has accepted 197 
applications since 2004 and helped give life to 85 new start-ups 
(not all choose to rent office space on the premises) with an 
average turnover of $300,000.  Movsesyan highlighted a September 
2009 investment of $10 million by the Russian Corporation for 
Nanotechnologies (Rusnano) and Russian Venture Fund (RVS) into 
"Start-Catalisator," a small start-up launched in 2006, for testing 
and prototype development of nanocatalyst devices for cleaner 
associated gas in oil fields.  Movsesyan lauded MSU Science Park 
start-up "MolTech Ltd" for winning first prize in Russia's 2008 
 
MOSCOW 00000072  002.2 OF 004 
 
 
Innovation Convention for designing a pharmaceutical drug called 
"Grippaverin," that mitigates influenza symptoms and is currently on 
sale in the Russian market.  (Note:  We visited a few pharmacies, 
but were unable to find Grippaverin.  End note.) 
 
--------------------------------------------- -- 
Nano Education and Innovation Activities at MSU 
--------------------------------------------- -- 
 
¶4.  (SBU) MSU Science Vice-Rector Aleksey Khokhlov explained that 
MSU's technology cluster includes the Science Park, supercomputer, 
Institute of Carbonic Materials and Technologies, Center of Natural 
Resources, BioIncubator, and a new Nano Research and Educational 
Center.  Earlier that day, Khokhlov noted that he had attended the 
opening ceremony of MSU's new 500-teraflop supercomputer, which he 
claimed was the seventh fastest in the world and second fastest in 
Europe.  (Note: Press reports after President Medvedev's November 25 
visit to the supercomputer said it ranks 12th in the world.  End 
note.)  With more than $15 million investment from the university 
and the government, MSU is currently constructing a 
3000-square-meter Biotech Incubator building.  With twenty 
applications already pending, Science Park officials expect the 
BioIncubator to open in 2010 and produce up to ten start-ups per 
year from 2011 onward. 
 
¶5.  (SBU) Khokhlov emphasized that MSU can only realize its three 
key missions--education, research and innovation--by developing new 
multidisciplinary educational programs, such as in nanotechnologies. 
 Therefore, in 2008, MSU opened its Educational and Research Center 
on Nanotechnologies with courses available to fourth- and fifth-year 
students.  Selected faculty from the departments of Physics, 
Chemistry, Biology, Material Science, Bioengineering and 
Biocomputing, and Fundamental Medicine teach courses in three 
specializations: nanosystems and nanodevices, functional 
nanomaterials, and nanobiomaterials and nanobiotechnologies. 
According to Khokhlov, the NanoCenter will prepare approximately 50 
students per year for careers in Russia's growing nano industry. 
 
¶6.  (SBU) Beginning in February 2010, MSU will select 25 students 
for a Rusnano-sponsored program at MSU that will allow private 
companies to share the costs of training nanospecialists.  Khokhlov 
noted that this is similar to the U.S. private sector's funding for 
graduate students.  A December 2008 MSU-Rusnano cooperative 
agreement will pay for a modern MSU Innovation Center of 
Nanotechnology that will train nanospecialists for MSU's existing 
Nano Educational and Research Center, provide Rusnano with 
specialists in the project expertise stage, and involve MSU 
laboratories in Rusnano's certification process. 
 
¶7.  (SBU) Even with the financial crisis, Movsesyan was optimistic 
that the Science Park can continue incubating 20-25 start-ups per 
year.  However, he and his colleagues commented that the 
entrepreneurial spirit is less developed in Russia than in the 
United States because "Russian investors are hesitant to take risks 
on innovative projects without proof that new products will work." 
Movsesyan noted that the August 2, 2009 law allowing universities to 
commercialize technology should enable the Science Park to increase 
the involvement of scientific leaders and MSU department heads in 
small business development.  (Comment:  Neither Movsesyan nor his 
legal staff were able to explain us how the Science Park operated 
during the period from the mid-nineties until 2009 when universities 
were not allowed to have small businesses.  Legal experts have told 
us that the Russian government granted MSU special permission to 
establish its Science Park due to the influence of its many 
 
MOSCOW 00000072  003.2 OF 004 
 
 
prominent scientists.  Deputy Minister of Education and Science 
Vladimir Miklushevskiy told the press in 2009 that 187 universities 
would launch 2,500 enterprises, providing jobs for as many as 30,000 
graduates.  Although other universities have been optimistic with us 
that they will be able to use this new law to good advantage, they 
do not have MSU's political clout or relatively robust warchest.  In 
October 2009, Aleksandr Suvorinov, Head of Department of Innovation 
Development and Technology Commercialization, Federal Agency for 
Science and Innovations, credited the bilateral Innovation Council 
on High Technologies (ICHT) recommendations with shaping the law, 
particularly allowing universities to create small businesses.  The 
law was somewhat controversial, with Senator Nikolay Ryzhkov 
comparing it to the law in the early nineties that allowed 
universities to create commercial organizations.  "Half the 
oligarchs whose names you're always hearing are a result of that 
law," said Ryzhkov.  "It's the single most corrupt law and allows 
for everything we create with state money to be pumped dry."  End 
Comment.) 
 
---------------------------------- 
Technology Transfer and IPR Issues 
---------------------------------- 
 
¶8. (SBU) Movsesyan explained that Science Park staff makes 
significant efforts to raise IPR awareness.  The concept of 
safeguarding intellectual property is the first topic his 
consultants must explain to students and scientists, who often do 
not understand either the importance of protecting their work or 
that they "should not disseminate their ideas for free."  In 2004, 
MSU opened a Center for Technology Transfer which provides no cost 
assistance to scientists who want to commercialize research results. 
 Working closely with MSU's Science Park, the Tech Transfer office 
provides educational programs and information for MSU-based small 
companies and compiles databases of all MSU research results.  The 
MSU Tech Transfer Office provides services to protect IPR, 
functioning like similar offices at U.S. universities, whereas the 
Science Park focuses on the incubation of start-ups and creating 
favorable conditions for small enterprises.  Both institutions 
stated that rightholders in Russia experience problems with IP 
protection due to deficiencies in IP legislation, lack of clear 
procedures for civil litigation, and poor IP enforcement in general. 
 Even before Russia rehauled its IP legislation in 2008 by enacting 
Part IV of the Civil Code, Russian law allowed for both "exclusive" 
and "non-exclusive" licensing agreements.  Although rightholders 
have tended to license their IP via "non exclusive" contracts, 
Movsesyan commented that individual investors may in the future 
prefer to own their IP on an exclusive basis.  The Science Park 
offers courses on how to protect intellectual property rights, 
including the legal aspects of concluding exclusive licensing 
agreements. 
 
¶10. (SBU) Comment:  MSU has used its Science Park and the other 
elements of its innovative infrastructure and its unparalleled 
political clout and funding to create a comfortable environment to 
partner with innovative businesses, racking up some impressive 
results.  However, significant obstacles to innovation on a national 
scale remain.  Few universities have the funding to develop high 
tech clusters with the top-notch equipment, facilities, and staff 
that MSU offers.  President Medvedev is a strong supporter of the 
National Education Project, begun in 2005, to increase Russia's 
global competitiveness by improving education.  If successful, it 
will go a long way toward improving innovation and addressing 
problems with brain drain.  But for Russia to become a global player 
in high tech, as President Medvedev exhorts, it must also do more to 
 
MOSCOW 00000072  004.2 OF 004 
 
 
improve the business environment, foster entrepreneurship, address 
deficiencies in IP legislation and enforcement, and expand 
innovative elements of infrastructure nationwide.  END COMMENT