Bayh-Dole Act of 1980 opened the doors for researchers to profit from inventions

June 15, 2001 — The Patent and Trademark Law Amendments Act of 1980 allowed university researchers who were funded by government agencies, such as the National Science Foundation, the National Institutes of Health and the Defense Advanced Research Projects Agency, to share in the proceeds of their patents with their schools.

The premise was that more work would migrate from the lab to the marketplace if the schools and researchers had an economic stake.

“The U.S. government was pouring billions into research and getting nothing quantifiable to show for it,” says William Hoskins, director of the office of technology licensing at the University of California, Berkeley.

At first, academia was slow to respond. Universities didn’t hurry to open technology-management offices. A decade elapsed before the University of California, Berkeley, opened its office.

In a 1999 survey by the Association of University Technology Managers Inc. (AUTM), a third of the 190 universities responding had technology management offices that were fewer than five years old.

“The pace picked up in the ’90s and it doesn’t seem to be slowing down,” Hoskins says.

Today, he and his five coworkers each have a caseload of more than 100 inventions they are trying to bring to market. The university and researchers were issued 100 patents a year ago and will be issued about 120 this fiscal year.

Hoskins says he doesn’t have hard figures on job creation in the San Francisco Bay area because of Berkeley spin-offs or licensing agreements, “but we’ve had a huge impact on the local economy.”

The act – better known as the Bayh-Dole Act for its sponsors, former Sens. Birch Bayh of Indiana and Bob Dole of Kansas — is having a big impact on the schools, too. Hoskins says that licensing revenues at Berkeley average about $6 million to $8 million a year and last year generated a total of $78 for all nine University of California campuses.

Policies differ at various universities. At the University of California, after all legal expenses are paid, inventors receive 35 percent of licensing revenues, and 15 percent goes to a research fund in the inventor’s department.

Of the remaining 50 percent, 16 percent goes to a universitywide general fund and 34 percent goes to the chancellor of the campus where the invention was developed, to be used, as the law specifies, to “support education or research.”

LICENSING FACTS AND FIGURES

The AUTM’s Web site is rich with facts

and figures on licensing activity nationwide. Its survey of university

licensing activity for 1999 and preceding years is available on-line and

includes these highlights:

  • Licensing activity contributed more than $40 billion in economic activity

    to local economies and supported more than 270,000 jobs that year alone,

    generating more than $5 billion in tax revenue to local, state and federal

    governments.

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  • 3,900 new licenses and options were signed, more than 60 percent with small

    companies.

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  • At the end of the year, there were 18,617 active licenses, up 9 percent

    from 1998, and 25 percent of those licenses had resulted in products being

    made and sold.

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  • 344 companies were created from university research that year, introducing

    417 new products to the market. In all, there were more than 4,000 products

    on the market that had grown out of private-industry licenses with universities;

    while some of them would have come to market with or without licensing

    agreements, at least half of them would not have, said the respondents.

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  • Universities funded the bulk of research projects in 1999, a total of $26.8

    billion; the federal government funded $16.8 billion in research; private

    industry sponsored $2.7 billion.

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CONTACT THE AUTHOR:
Tom Henderson at tomhenderson@smalltimes.com or call 734-994-1106, ext. 233.

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