Wednesday, February 20, 2013

The Commercialization of Academic Research

The latest issue of Science has this interesting news piece on universities and the commercialization of academic research.

A sample:

But efforts to turn universities into commercial hothouses often don't succeed: Tech transfer is a net money-loser at most universities, studies suggest, with legal and administrative costs often exceeding revenues. Indeed, a growing number of scholars warn that government and university officials too often create unrealistic expectations by overstating the potential benefits of commercialization and underestimating how hard it is to do and what it will cost. Many advise schools to focus instead on "knowledge transfer"—helping society benefit from the discoveries and skills of faculty members and students without focusing just on finances.

....Generating good ideas is just the first step. If an invention appears to have commercial value, a university can create intellectual property (IP) by applying for a patent, copyright, or some other form of ownership that it can legally enforce. The university can then sell or license the right to use the invention to one or more companies—or assume the risks of launching its own startup. Any payments or profits are typically divided equally among the inventor, the inventor's academic department, and the university's general fund.

The Bayh-Dole system has opened the door to some eye-popping payouts. In 2005, for example, Stanford earned $336 million from selling its stake in Google, and New York University and its researchers have earned more than $650 million since the mid-2000s from the science underpinning Remicade, an arthritis drug. In 2011 alone, Northwestern University in Evanston, Illinois, earned $192 million from its tech transfer operation, topping the most recent annual chart assembled by AUTM. And a federal jury recently awarded a whopping $1.2 billion to Carnegie Mellon University in Pittsburgh, Pennsylvania, after it found that a semiconductor company had used the university's inventions without permission. (The company is appealing the verdict.)

The problem facing would-be copycats is that such windfalls are the exceptions, not the rule. "The great majority of [university] inventions generate modest revenues and many generate none," the NRC report found. "A handful of universities and a small fraction of all inventions are responsible for a large fraction of the revenues received."