In addition to getting money from governmental and commercial
grants, University of California research garners supplemental
income from the sale of patented technology, earning over $100
million last year.
Though some intellectual property lawyers contest the legality
of patenting publicly funded research, university officials defend
patents as the vehicles that move research findings from the
laboratory to the household.
Prior to the Bayh-Dole Act of 1980, the government ““ state
or federal ““ owned the findings from publicly funded
research, but since then, university researchers have gained the
legal right to seek invention proprietorship.
“The patent process is really an incentive for
commercialization of the product,” said Marcus Horwitz, a
UCLA professor of medicine and microbiology, immunology and
molecular genetics.
When research is patented, both the inventor and the university
where the research was done hold the patent. In the fiscal year
ending June 30, 2002, 970 inventions were patented by UC
researchers ““ which brought the UC’s active portfolio
to 2,502 domestically patented products.
From this portfolio, the UC received about $100 million in
royalties and licensing reimbursement for last year alone.
Figures like this have caused some to wonder if the research
enterprise is exploiting taxpayers’ money.
“It really is an embarrassment that we pay for the
research, then give the patent away and pay for the product at a
super competitive price,” said Mike Davis, Cleveland State
University professor of intellectual property and patent law.
University officials have a different take on the effect of
research patents on taxpayers.
For one thing, only a small portion of research ends up getting
patented, and not all patented research generates revenue, said
Andrew Neighbour, associate vice chancellor of research and
executive director of the UCLA Office of Intellectual Property.
Neighbour said the hope of generating income is one of the
reasons the OIP files patents, but it is not the only reason.
“Patents are a validation of the quality of their
research,” he said.
This validation has the potential to earn the researcher a large
sum of money. The researcher reaps 35 percent of the royalties,
while the other 65 percent is entitled to the UC Regents. That 65
percent is then given to the campuses responsible for the work.
Despite receiving $10 million in patent royalties and another
$760 million in research awards last year, UCLA still spends more
each year on research than it receives, Neighbour said.
Patents give the developing company the exclusive commercial
rights to the product.
Neighbour said that the cost of developing a new product, like a
drug, is extremely large, and if a company could not make a profit
they will not advance the research that has been done at the
university level.
But Davis said there is something unusual and illegitimate about
the industries that receive governmental funding for patented
research.
“The pharmaceutical sector is the most profitable of all
industries and they receive the most governmental patents,”
he said.
In the fiscal year 2002, the highest-grossing invention in the
UC was the Hepatitis-B vaccine. The vaccine, which was developed at
UC San Francisco in 1979 and 1981, earned $21,474,000 last
year.
Income like this helps to recoup the cost of research and
generate revenue for the state of California, said Joe Mandel, vice
chancellor of legal affairs.
Roberto Peccei, vice chancellor of research, added that
productive areas of industry are typically located near elite
research universities.
“That’s not an accident,” he said.
Explaining the benefit pharmaceutical development has on both
the economy and the human ecology, Neighbour said the public focus
should not be on the monetary figures related to patent research,
but should instead be on their utilitarian function.
“People say, “˜My God, look at what money
universities are making.’ What the public doesn’t see
is how we are saving their lives,” Neighbour said.
“Should you reward people who benefit society?” he
asked. “My answer is yes.”