Long before Bob Dole abandoned his presidential dreams and became the unlikely spokesman for Viagra-a celebrated product of industrial research-he gave an even bigger lift to academic research. In 1980, Dole and fellow U.S. senator Birch Bayh sponsored the Bayh-Dole Act, legislation that gave blanket permission for universities to license and profit from the fruits of federally sponsored research-rights previously held by Uncle Sam.
The Bayh-Dole act turned out to be Viagra for campus innovation. Universities that would previously have let their intellectual property lie fallow began filing for-and getting-patents at unprecedented rates. Coupled with other legal, economic and political developments that also spur patenting and licensing, the result seems nothing less than a major boon to national economic growth. Behind big university patents such as Carnegie Mellon’s Lycos Internet technology and the University of Minnesota’s AIDS-fighting carbovir-along with a host of lesser technologies-campus inventions supported some 280,000 jobs and generated an estimated $33.5 billion in economic activity in 1998, the last year for which figures are available.
TR’s University Research Scorecard takes you inside this increasingly vital part of the economy, analyzing academia’s ever-increasing IP firepower using two separate rankings of top U.S. educational institutions. The first, based on data from CHI Research of Haddon Heights, N.J., assesses patenting prowess via a measure called “technological strength,” which takes into account not only patent numbers but also patent quality (See table: “Campus Patenting” on following pages). The second, based on data from the Association of University Technology Managers (AUTM), lists the 25 universities with the highest licensing revenues (See table: “Tech Transfer Riches” on following pages). Since patents generally don’t begin to generate license income until five to 10 years after a deal is signed, the two together not only show who’s ahead in the race to capitalize on university inventions, but who is coming on strong for the future.
A glance at TR’s scorecard confirms that the race is being run at an increasing clip: Technological strength was up in 1999 for 44 of the top 50 schools; patent numbers were up for all but two. Not surprisingly, the biggest players dominate the patent numbers: The University of California system, MIT and Caltech have amassed war chests of intellectual property across a range of technologies from medicine to fiber optics.
But raw patenting numbers aren’t the only significant factor when it comes to the money side of the equation, and some schools with relatively few patented inventions are reaping huge returns. Columbia, for example, ranks second in licensing income and makes nearly a quarter of its $260 million research investment back in royalties and fees, even though the school garnered only 34 patents per year on average from 1994 to 1998. Third-place Florida State University, meanwhile, rakes in an astounding 42 percent of its $112 million annual research budget through a mere 10 licenses or options deals.
The Florida State story illustrates a truth university licensing managers know all too well: All it really takes to win the financial game is one IP home run. The school’s director of technology transfer, John Fraser, puts it bluntly: “Fundamentally, we’re a one-horse operation, and that horse is called Taxol.” The anti-cancer drug, which Florida State licensed exclusively to Bristol-Myers Squibb, earned the university some $45 million of its $46.6 million in licensing income in fiscal year 1998. The school could net more than $60 million on Taxol this year.