鈥淥UR motto is 鈥榰se it or lose it鈥�,鈥� says John Preston of the Massachusetts Institute of Technology in Boston, one of the world鈥檚 great centres of technological innovation. Preston鈥檚 job is to take ideas that spring from the minds of researchers and patent them. His motto means that unless industry says it will use an invention, it is not worth patenting 鈥� and the approach seems to work. By selling licences to companies that want to exploit its patents, MIT makes about $8 million a year.
Other elite universities in the US have been equally successful. The universities of California and Columbia, for example, each receive royalties worth about $30 million a year. In Britain, however, evidence of the Midas touch is more difficult to find. The first survey of patenting activity in British universities, published last month, found that only a handful make a decent profit from patenting. In all, British universities hold around 570 patents which earn an estimated 拢20 million a year. The survey found that some universities had no patents at all. So what is the best strategy for winning in the patent game?
Big league players
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Andrew Webster and Kathryn Packer of Anglia polytechnic University in Cambridge counted Britain鈥檚 patents from painstaking literature searches and questionnaires returned by 31 of Britain鈥檚 62 鈥渙ld鈥� universities. They also conducted in-depth interviews to find out how universities manage the patenting process. Of the 31 universities 鈥� which include those with the biggest incomes from royalties 鈥� only 12 said that their patenting departments broke even, 10 had no policy for handling intellectual property, and only half a dozen had royalty earnings in excess of 拢1 million a year.
The Economic and Social Research Council commissioned the research to find out whether universities had stepped up their patenting activity since 1985. Before that, universities were obliged to offer first refusal on patenting any promising inventions to a state-owned organisation called the National Research and Development Corporation, which now operates in the private sector as a company called the British Technology Group (BTG).
Today, the government encourages universities to forge stronger links with industry so that the technology they generate creates wealth. As part of this, universities have been urged to step up their patenting activity, earning money for themselves and providing industry with innovative technologies.
So who is in the big league, and what makes them successful? The University of Strathclyde is probably at the top, earning 拢3.4 million a year from its 40 patents. 鈥淲e would claim it鈥檚 the biggest amount, but that鈥檚 anecdotal,鈥� says Jim Houston, manager of intellectual property rights at Strathclyde. Like the other pacesetters, Strathclyde has just one or two high-earning licences. Some 80 per cent of its income comes from a single licence granted to Glaxo-Wellcome for atracurium, a muscle relaxant used in anaesthesia.
Perhaps the best known patents are those for magnetic resonance imaging (MRI) 鈥� widely used in body scanners 鈥� which are managed by the BTG for the University of Nottingham. Like other frontrunners 鈥� including the universities of Oxford, Birmingham, Cambridge, Imperial College, London, and Edinburgh 鈥� Nottingham鈥檚 licences bring in royalties approaching 拢1 million a year. These institutions agree with MIT鈥檚 policy of sticking only to technologies that industry is prepared to develop into products. According to James Hiddleston of Isis Innovation, a company that handles patents on behalf of the University of Oxford, the ideal situation is to find a company in the first year that will pay for a licence, agree a 5 per cent royalty, and invest 拢500 000 to develop the technology.
Hiddleston is ruthless about dropping patent applications that fail to attract industrial interest within a year. This is mainly for financial reasons. While it costs only 拢25 to apply for a patent, 鈥減rosecuting鈥� that application can crank up the cost to anything from 拢4000 to 拢15 000. 鈥淧rosecution鈥� means laying out the claims for what the invention can do, with all the supporting evidence, and must be done within a year of applying. 鈥淲e apply for 10 to 20 patents each year, but frequently we don鈥檛 take them any further because they cost a fortune,鈥� says Richard Jennings, director of Lynxvale, which handles patenting for the University of Cambridge.
Universities have various ways of identifying candidate technologies for patenting. 鈥淥ur policy is somewhat laid back,鈥� says Jennings. Like his counterparts at Oxford and MIT, Jennings tends to wait for academics to come up with proposals, but all of them keep tabs on what鈥檚 bubbling up in the laboratories. They also hold seminars to remind academics what they are trying to do. Jennings says that by far the best way for academics to learn is through collaboration with industry. Failing that, he organises lectures by academics who have already taken out patents on their research.
At other universities, notably Strathclyde, Birmingham and Edinburgh, staff actively seek out technologies for patenting. Industrial liaison officers tour departments finding out what research is going on. Edinburgh, for example, has officers embedded within the faculties of medicine and of science and engineering. Mike Webber, who handles patents for the university, also employs a number of ex-managing directors of engineering companies who 鈥済o native鈥� among the academics and who are well-placed to spot a hot commercial prospect.
In an effort to encourage more patenting, the government offers grants to university industrial liaison groups to 鈥渁udit鈥� the research being done on campus. The aim is to draw up a list of what research projects might have commercial potential. Paul Sadler of Birmingham R&D, a company that handles patents for the university, found this exercise a real benefit 鈥淚t gave me new contacts and we found two licensable spin-offs when we audited the medical school,鈥� he says.
There is some evidence that other universities have been inspired by the few big royalty earners. Several are in the process of increasing their patenting activities. Essex, for example, has set up a company called Wivenhoe Technology to handle patents. 鈥淲e do have some items that produce revenue, but we鈥檙e still looking for ones that will make us rich,鈥� says Bill Houston, the company鈥檚 director. The University of Reading is also trying to set up formal patent policy, says Chris Prasad, the industrial contracts officer. 鈥淲e are in the middle of a transition, moving to much less adhockery and more directed patenting,鈥� he says.
Hiddleston believes that if a university鈥檚 strengths lie outside applied technology, it may not be economic to create sophisticated patenting operations. 鈥淭o set up a company like Isis, or even consider patenting, you must have a broad enough research base to sustain it, or it鈥檚 not worth going into the game,鈥� he says. 鈥淚f you are small, you might just as well take your patents to the BTG.鈥� This may explain why 80 per cent of the universities that replied to Webster and Packers鈥� survey still rely on the BTG. Last year, BTG shared out 拢13 million from patent royalties among 165 institutions.
Vindictive patenting
The survey also uncovered some problems with patents, including evidence that some academics practise 鈥渧indictive patenting鈥�. Some researchers interviewed for the survey admitted that they applied for patents purely to prevent industry interfering in their research, or to sabotage the patenting plans of other academic groups. To keep rival groups at bay, one scientist, who wanted to remain anonymous, patented a group of enzymes used in brewing to the control quality of beer.
According to Webster, the survey also showed that the pressure to patent is making some scientists withhold details of their work in scientific publications and at conferences. Some researchers are afraid that if they reveal too many details of an invention they will wreck their chances of patenting it later on. Patents are only awarded to inventions that have not been disclosed to the public.
Another perceived danger, says Webster, is that scientists who disguise the importance of their work will damage their university department in the eyes of the higher education funding councils. The councils allocate government money according to a formula that emphasises the quality of a department鈥檚 scientific publications. The councils have recognised the bias in this system, however, and last year amended the formula to lay more stress on industrial earnings and patents.
The universities鈥� patent brokers deny that patents and publishing are incompatible. 鈥淭here鈥檚 a myth in Britain that says you should not patent because it holds up publishing,鈥� says Hiddleston. 鈥淎cademics make career progress through publishing, and I would not try and stop that, but I would ask them to show me [their papers] first,鈥� he says. If the need arises, 鈥淚 can file in as little as one day鈥�, he says.
Whatever the dangers to academic freedom, universities are keen to continue patenting to boost their earnings. 鈥淭his unfettered income has potential to underpin many other pure and applied research programmes for the future,鈥� says Houston at Strathclyde. But even the patent brokers agree that universities have to walk a fine line between academic and commercial priorities. 鈥淚t would be catastrophic if the university system became profit-driven,鈥� says Douglas Robertson, who looks after patenting at the University of Nottingham.
Back at MIT, Preston maintains that good ideas keep arriving at his office because the researchers are so motivated. 鈥淚f I give a student a royalty cheque worth a few thousand dollars, I can almost guarantee that his colleagues will come up with 10 proposals to equal it,鈥� he says. In Britain, researchers who patent an invention also receive part of the royalties, but universities tend to play down personal gain. They encourage researchers to file patent applications for the benefit of their departments. 鈥淚f you handed out big cheques like lottery winners you might have loads of people knocking on your door but with loads of useless ideas,鈥� says Robertson.
But there is a another big difference that separates British and American universities. Britain is a newcomer to the game and money does not pour in as soon as a patent is granted. It took more than 10 years before Nottingham started to see money from its licences on MRI, for example. American institutions, such as MIT, have been applying for patents for a lot longer than those in Britain, says Jennings. 鈥淚t really is a long-term process and we鈥檝e only been at it since the BTG monopoly was broken,鈥� he says. We鈥檝e still time to catch up鈥� (see Table).
