Posts Tagged: "technology transfer offices"

Litigation finance in the university context is thus particularly valuable. Even for smaller matters, litigation finance shifts spend off the university’s balance sheet, allowing it to put its own capital to use in its primary endeavors: Education and innovation. For larger matters, litigation finance shifts risk from the university—which, despite its diverse technology portfolio, may have only a small number of claims with attractive litigation prospects—to an entity with a much larger book of diversified risk across uncorrelated claimants.

A massive amount of intellectual capital gets created every day from $150 billion in annual research funding allocated to federal laboratories and universities in the United States. Unfortunately, most of that intellectual capital never makes it to the market and does not generate any ROI. Essentially more than 99% of the intellectual capital created at universities and federal labs are never protected and never gets translated to intellectual property, and hence those are almost never transferred through a license to a startup or an existing company. So, what happens to the majority of the intellectual capital that is not disclosed as inventions? That typically remains locked up at the university without access from the outside world.

Today (TTOs) are increasingly being run by professionals who are experienced in startups, licensing, monetizing and have tremendous depth of technical knowledge in a variety of fields. But they are all waging a losing battle in an industry where 73% of the offices are losing money and an additional 16% just breakeven. It is not because of the efficiency of these offices, it is because of the underlying business model… But the impact of technology transfer on the US economy has been enormous. Since 1980 more than 5,000 startups have been created. From 1996-2013 technology transfer has contributed $518 billion on the US gross domestic product, and $1.1 trillion on the US gross industrial output.

What’s even more impressive is the impacts on gross industry output and GDP are up 14% while  the number of U.S. jobs supported rose 12% since the previous report issued two years ago. That’s remarkable at a time when the overall U.S. economy has been treading water… While the attacks on Bayh-Dole (and the patent system) are largely driven by emotion, here’s some additional data BIO cited that’s worth considering: over the past 25 years academic inventions led to the formation of 11,000 startups and the commercialization of more than 10,000 new products.

Senator Chuck Grassley (R-IA) added language to the fee-shifting provisions in the PATENT Act that would offer an economic hardship exception to fee shifting for “an institution of higher education.” The reason that Iowa State and the University of Iowa find themselves on the outside looking in is because of the way they have structured their patent ownership and licensing efforts. As is rather common, Iowa State and the University of Iowa place ownership of patents outside the institution and in the hands of a Research Foundation, which is a separate entity altogether.

Gulbrandsen’s chief complaint with the U.S. system centers around the fact that it has become enormously easy to challenge issued patents once they have been granted. In fact, organizations in pursuit of acquired technology are leveraging the kill-rate at the Patent Trial and Appeal Board (PTAB) at the United States Patent and Trademark Office (USPTO), to negotiate lower licensing payments. Threats are made that patents will be challenged in Inter Partes review, “so that you amend the license and reduce the fees,” Gulbrandsen explained. “So, immediately you know that devalues the patent and devalues the license agreement that you’ve got.”

This patenting step is absolutely crucial for the commercialization of inventions. In the absence of a strong intellectual property system – specifically patents – most of those inventions will never see the light of day. Why is that? The answer is quite simple – the cost to develop those inventions to a marketable product are significant and in the absence of intellectual property protections that the patent system provides, no one will ever invest in the promise of an invention. Said another way, how many of you would invest in a company that will spend tens to hundreds of millions of dollars on a product knowing that a competitor will be free to offer the same product at a fraction of the cost since they invested substantially less in R&D?

Fortunately, a new study showing that academic patent licensing contributed more than $1 trillion to the U.S. economy over eighteen years blows the stuffing right out of that straw man. We can only hope Congress gets the message before it turns the patent system into a weapon to squash inventors.

The innovations spurred by Stanford R&D often go on to create economic success once those developments leave the school’s research facilities. By the university’s own measure, companies started by entrepreneurs from the school have created 5.4 million jobs since the 1930s and they currently generate $2.7 trillion in global revenue each year. Many of Stanford 2014 Text Clusterus use products from these companies daily and a number of these businesses, including Yahoo!, Google, Hewlett-Packard and Cisco, are regularly featured as part of our Companies We Follow series here on IPWatchdog.