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Bayh-Dole Can Bring Money for Research and Education

February 19, 2009
There is a movement out there among scientists who would like to see patents lifted, and have everything freely available. Let’s think about that for a minute. Would that really be a good idea? There is an article in the February 2 edition of the University of California at Los Angeles Daily Bruin, titled, “Inventions provide money, jobs for UC.”

Excellent point -- if there is intellectual property, there must be money involved and it must from somewhere and go somewhere, but where does it come from and where does it go?
According to the Bruin, in 2007 the UC system earned an income of $116.9 million dollars from royalties for licensing patents, UCLA received around $12 million. Now while that is only a small fraction of the $900 million a year that UCLA receives in the form of research funding, according to the Bruin,

“The money is still significant because it is not designated for a specific purpose, unlike most sources of university funding.”

“(The school) may use it wherever they have a piercing research need,” said Kathryn Atchison, vice provost of intellectual property and industry relations and vice chancellor for research at the Office of Intellectual Property and Industry Sponsored Research.

“The royalty income that UCLA receives is only a small portion of the total amount and is obtained after the money has been divided according to several formulas, Weinstein [Earl Weinstein, assistant director of business development and licensing at the Office of Intellectual Property and Industry Sponsored Research] said.

After an invention has been created, the inventor files a patent, Weinstein said, before meeting with venture capitalists and entrepreneurs to “find the best home for the technology,” which sometimes involves licensing the patent.

Weinstein also said the most important criteria in selecting the best company to take the invention to the market is that the company be able to develop the technology quickly and really make an effort to put it in the market.

Another factor that contributes to the selection of a corporation for the product is the Bayh-Dole Act, which tends to favor smaller entities, Weinstein said.

A federal act established in 1980 by Sens. Birch Bayh (D-Ind.) and Bob Dole (R-Kan.), the Bayh-Dole Act also “allows a federally funded university to retain rights to intellectual property,” said William Tucker, executive director of the Technology Transfer and Research Administration at the University of California Office of the President.

Tucker said previously the federal government would retain the intellectual property rights, decreasing incentives for continued research and development.”

But regardless of the existence of a federal act, there are several nuances which govern how the royalty money is divided, such as the year in which the inventor joined the university, Tucker said.

For example, Tucker said, if the inventor joined the university in the last five years, the net royalty income would be divided by giving 15 percent to the department chair for future research development, 35 percent for the inventors on the patent and about 12.5 percent for the general University of California fund.

The remainder of the money goes to the dean of the school where the invention was created for the purposes of the “teaching and research mission,“ Atchison said.

The Bruin goes on to say that licensing of technology also creates local jobs which can employ faculty and students. In summary, the licensing of intellectual property, well it’s what makes research go ‘round. Assuming you agree that “inventions provide money and jobs” and make research go ‘round, wouldn’t it follow that universities make every effort to bolster tech transfer offices?