Is a portfolio making $10m/year and closing 50 licenses a year high performing? Is it still high performing if it is making $9.8m from one license, and $200K total from four more, and about one third of the patenting costs from the rest, and 40 of the 50 licenses are non-exclusive in consortia, and of the 750 inventions disclosed in the past five years, the total licensing activity generating revenue over expenses and seeing invented technology actually in commercial use (internally, or as a product) amounts to about 25 cases . This latter situation may be the typical profile for a university patent portfolio. A few big hits, some stuff stringing along that might come to something, an apron of stuff that makes the numbers look good, and a lot of stuff with some bits of fading hope but not particularly priority. Even still, from a portfolio point of view, that may be a good deal–money is coming in, just have to do one deal every 15 years or so to have enough to make budget. For this, one might think to show how the income is better than other places with more disclosures per year, or more sponsored research, and make the claim that the office is doing even better.
From the perspective of a given research project, however, that tremendous portfolio doesn’t look so hot, regardless of the comparisons. That’s because it’s unlikely that for any given project, its inventions are the ones hitting it big. For 150 inventions disclosed in a year, there might be 50 to 100 different projects involved. The odds of hitting it, on the numbers, is 1 in 750, or of generating any income whatsoever, maybe 1 in 30. These may be decent odds, comparatively speaking–and one can make a good argument that technology placement via patent licensing for a royalty is really challenging and takes time. But for a bunch of projects, the tech transfer office will hold patent rights but will not have anything to show for it. This is the social reality. How many labs are the heavy side of the 1 in 30 after a decade of practice? Yeah, for them it sucks. And over time, there will be a lot more of them than there will be of the successes. Since the tech transfer successes don’t result in any direct benefit to the labs with inventions and no action, it’s even worse by comparison, since all the labs have to show for their participation in the program is the distraction of submitting invention disclosure documents and answering a bunch of questions. Sure, they are learning how patents are obtained, and some ideas of how they might be used, but that’s a long way from a check worth talking about.
From the point of view of a project that has disclosed inventions that the university claims, but which are not in play, the university ownership is a liability. It represents uncertainty and overhead. Grad students leaving the lab for industry positions cannot practice what they learned (or even invented) in their company positions. Investigators owe their colleagues a heads up that what they are publishing on is claimed by the university, which holds the patents and will do what it will, if the opportunity ever arises. Even where there’s a close partnership, goodwill, and lots of incentive to get on with one another, there’s still the lingering bit that the portfolio is doing well, regardless of what happens locally, for this project, in the near term. The social reality is, unless a majority of inventions are in play, a university portfolio will not be “research-successful”, regardless of how much money it is bringing in.
For research-successful, we might look at working relationships, participation in platforms and standards, and development of tools and methods that primarily have a life of internal use rather than either as a product or new company. A university holding patent rights in portfolio to be licensed for commercial sales may as well put up a sign that it intends to stand off anyone who wants to use internally until someone comes forward to take a commercialization license. That’s not so much an innovation stance as it is a money stance. That’s what gets folks off about the whole thing. That patent portfolio, even making a nice bit of money, is likely under-serving its research community, increasing the uncertainty with regard to the industry research and practice community, and working against rapid uptake of research inventions into shared assets such as standards. And still, it’s a successful portfolio, if one looks only at the money spent and the money received.
This is a problem of reporting “metrics”. If one knows that the “numbers” make you look good to folks who don’t know how you do it, and can’t guess the structure of your numbers, but these otherwise tell a tough story, is it in the public interest to leave an impression that’s not, let’s say, true? That is, the numbers are “true” but the impression isn’t. I think that research personnel sniff this out and don’t like it. For that matter, I think industry and investors also sniff it out and don’t like it. Is there any ethical obligation, at least in reporting the structure of a university patent portfolio built on federally funded research, to lay out the structure of the portfolio and not leave the impression of lots of money and lots of licensing, if it’s one case and a few efforts and a lot left on the table, perhaps to have its day later, but mostly to waste?
This is not a criticism of tech transfer operations. Especially, this isn’t a case that an office could “do better” and license nearly everything, if only it were expert or funded or motivated or efficient or celebrity stocked or run by investors or boosters or really important people or technicians who just followed policy and didn’t think so much. Yeah, right. No, it’s not possible. The bit about a single office handling the invention affairs for $200m in research spread across every bit of life is not possible. This isn’t about improving efficiency or doing things optimally or making more money. This is about a kind of intellectual honesty in reporting what is happening to one’s own service community and to the public.
I note: who reports how many inventions have not been licensed? or the average age of unlicensed inventions? or the amount spent on unlicensed inventions? or the number of inventions waived as to university interest?
I note: who reports the number of inventions earning more than their patent costs as a percentage of the entire number of inventions under management?
I note: who reports the contributions to collaboration, standards, testbeds, small business other than one’s owns startups, even when these didn’t make “money”?
I note: who reports how they spent all that hard-won licensing income?