Technology Transfer: You Make the Call

Depending on your point of view, technology transfer programs at public universities are either the best thing since sliced pumpernickel or scams perpetrated by predatory professors.

In a nutshell, technology transfer typically involves the process of turning research into practical (i.e., "money making") applications. Almost all universities these days have offices of technology transfer responsible for identifying the commercial potential of university-conducted, public-financed research. That's Part 1 of their charter. Part 2 is to come up with ways to turn that potential into revenue, usually by patenting the research results and licensing technology to third-parties.

At the heart of public university's ability to get involved in technology transfer is the 1980 Bayh-Dole Act, co-sponsored by Senators Birch Bayh and Robert Dole. This federal law makes it possible for universities, nonprofit research institutions, and small businesses to own and patent inventions developed under federally funded research programs. According to the Bayh-Dole Act:

• Universities can retain title to innovations developed under federally funded research programs.
• Universities can collaborate with commercial concerns to promote the utilization of inventions arising from federal funding.
• Universities are expected to file patents on inventions they own.
• Universities are expected to give licensing preference to small businesses.
• The government retains a non-exclusive license to practice the patent throughout the world and the government retains march-in rights.

To give you an idea of the impact of the Bayh-Dole Act, consider that before 1980 fewer than 250 patents were issued to U.S. universities. In 1999 alone, on the other hand, 3914 new license agreements were signed.

In 2006, Carnegie Mellon University helped establish 14 companies that were based on university technology, ranging from the green chemistry firm GreenOx and the training-simulation game developer SimOps, to the industrial control firm Industrial Learning Systems and robot toy developer Bossa Nova Concepts. At the University of California, more than 200 start-ups have licensed technology from the UC System's 10 campuses and three government labs. UC Berkeley alone licensed technology to more than 60 start-ups, and all in all, more than 100 products have been commercialized under UC Berkeley technology licenses. As of the end of fiscal year 2002, Berkeley had an active portfolio of 681 inventions, 417 U.S. and 303 foreign patents, and 207 license agreements. In the last five years, license revenues have aggregated to over $42 million, and licensing to "faculty" start-up companies has resulted in equity holdings in 16 companies.

So technology transfer programs bring millions of dollars a year to universities. So they're a good thing, right? Well, that depends on who you talk to. In many cases, start-ups that license technology that comes from university research are the professors themselves. In the University of California system, faculty and students have founded more than 25 percent of the start-ups. They benefit from research conducted by their grad students who get a passing grade, and not much else. That's clearly not the case in every start-up, but it has happened--and that's why most technology transfer programs have strict ethical and conflict-of-interest guidelines, like those at the University of California.

Still, there are lots of issues to be dealt with, the least of which involve issue such as intellectual property, open source, and the like. If some unpaid grad student or underpaid researcher comes up with a great idea and turns it into a product that makes them some money and the public who paid for the research benefits in the long run, well, what's wrong with that?

Posted by Jon Erickson at 12:14 PM  Permalink