In pursuit of patents: over the past two decades, academic research has made great strides, with an extensive roster of patents, royalties, and start-ups to show for it - Cover Story - Statistical Data Included

Matrix: The Magazine for Leaders in Education, Feb, 2001 by Karen Singer

Several trends have contributed to the growth, including passage of pivotal federal legislation, which provided incentives for universities to patent and commercialize inventions, and for corporations to play a larger role in fostering university research.

Many universities now have technology transfer offices, aimed at nurturing and licensing inventions. And some have turned to the Internet to disseminate available technologies, via their own Web sites, as well as commercial intellectual property marketplaces in cyberspace. Moreover, recent litigation between universities and corporations has sent a clear signal that universities are willing to go to great lengths to protect valuable inventions.

The impact of the trends is evident in the numbers. A recent survey by the Association of University Technology Managers, Inc. shows licensing of innovations made at academic institutions in fiscal 1999 generated $40.9 billion in economic activity and supported 270,000 jobs. In addition, business activity related to sales of products generated an estimated $5 billion in U.S. tax revenues at the federal, state, and local levels.

The survey, based on results from 190 member institutions, depicts a steady increase of licensing and patent activity, and contains what AUTM president James A. Severson calls "an impressive array of data demonstrating that investments in academic research result in new products that improve the quality of our life and enhance our environment."

Google, Inc., the award-winning Internet search engine, for instance, was created by two Stanford University graduate students who, after disclosing the technology to the school's Office of Technology, formed their own company. In June 1999, the start-up attracted $25 million in private equity funding, and currently performs more than 50 million search requests daily.

Another example is the State University of New York, which holds 27 patents related to technology developed by two SUNY Stony Brook Dental School doctors for a nonantibiotic drug counteracting periodontal disease. CollaGenex Pharmaceuticals licensed the patents, and obtained FDA approval for Periostat in 1998. Since then around 750,000 prescriptions have been written for it.

These successes probably would not have occurred without the Bayh-Dole Act, which was passed in 1980 to fill a void in federal policy regarding ownership of inventions made by government contractors and grantees under federal funding. Government officials believed the public would benefit if universities and small businesses were allowed to own inventions made under federal funding, and to become directly involved in the commercialization of those inventions.

The new policy also sanctioned exclusive licensing as long as it was tied to diligent development of inventions and transfer of those inventions to the marketplace for the public good. Officials believed that licensing new inventions from universities to businesses would stimulate the U.S. economy.

"As a result, universities have become more active in pursuing patents, based on research on campuses ... [which has] allowed business development to proceed, and allowed our institutions to contribute to business and economic development in their communities," Severson said.

"The Bayh-Dole Act very clearly says that the income should stay on campus, and it helps supplement research and education dollars from the state and federal government that wouldn't be there otherwise."

The AUTM survey also showed more than 417 new products were introduced commercially worldwide from 98 institutions in fiscal 1999. Academic discoveries licensed to industry were developed into healthcare products, software programs, and agricultural products as well as research reagents and tools used by industry and academia for research, development, and commercial purposes.

Adjusted gross license income that member institutions received from licenses and options was $862 million, compared to $725 million in fiscal 1998.

Patent activity related to U.S. colleges and universities also was up last year. The AUTM survey shows 5,545 new U.S. patent applications were filed in fiscal 1999, up 15 percent from 4,808 the previous year.

According to the U.S. Patent and Trademark Office, 3,340 (2.2 percent) of the 153,487 utility patents issued in 1999 were assigned to a U.S. college, university, or association of U.S. colleges and universities. The PTO notes both the number and percentage of total patents assigned to U.S. academic institutions have steadily increased since 1985, when only 589 utility patents (.8 percent of total) went to U.S. academic institutions. Most of these patents have been in superconductors, biotechnology, and pharmaceuticals.

As in 1998, the top two utility patent recipients last year were the University of California (437 patents) and Massachusetts Institute of Technology (142 patents), followed by the California Institute of Technology (99 patents).

The impact of the Bayh-Dole Act "has been very broad ranging," Severson said, adding, "It's a very powerful and positive story."