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'Hoping for a Blockbuster'

Most technology transfer offices at universities in the US aren't raking in a lot of income, a new report from the Brookings Institute says. Only a handful of universities, it says, are generating enough money through licensing agreements to support the operations of their tech transfer offices.

The Bayh-Dole Act of 1980 allows universities to retain patents on work conduct there using federal grant money and generate income. For instance, the New York Times points out that Columbia University has received $790 million due to its patent on inserting foreign DNA, while New York University has gotten more than $1 billion because of patents it holds related to the autoimmune disease drug Remicade.

But most schools don't receive that much, Walter Valdivia, the author of the Brookings paper, notes. He adds that licensing revenue is lopsided as the top 5 percent of earners — coming out to eight universities — receive more than half the licensing income.

"There's nothing inherently wrong with the current model, but it isn't enough. There need to be more alternatives," Valdivia tells the Times. "They have historically put all their efforts into hoping for a blockbuster patent and then aggressively negotiating licensing fees, which alienates industry instead of making it a partner."

In addition, Valdivia estimates that in 2012 130 universities did not generate enough income in licensing to cover the cost of their tech transfer offices. He notes, though, that licensing income is typically split three ways between the researchers, their department, and the university.

To improve tech transfer, he argues that the federal government should expand its Small Business Technology Transfer program funding, allow a patent-use exemption for nonprofit research institutions, and develop an equity rule for the distribution of funds to universities.

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