In the academic sector, the process of commercialization — or of bringing technologies to the marketplace — is known as “technology transfer.” Technology transfer is now part of the government mandate for institutions receiving federal funding for research. By and large, technology transfer is accomplished through licensing intellectual property (IP) to companies that have the resources and desire to develop and produce the technology for specific applications. In return, universities receive payments (in the form of cash fees and/or equity and/or royalties on earned revenues) for the products or services that were licensed. The income to the university is distributed according to each university’s policy, but it includes compensation to inventors and a mechanism for channeling income back into the research programs of the university.
The Council on Government Relations (COGR) defines technology transfer as “the handing off of intellectual property rights from the university to the for-profit sector for purposes of commercialization.” While technology transfer has been commonplace in the industrial and business sectors for a long time, the notion of selling intellectual property for commercialization purposes has really only become a university phenomenon in the last thirty years, or so. Although the transfer of ideas and technologies from universities to the private sector has occurred to some degree for many years, it became part of mandated practice with the passage of the Bayh-Dole Act in 1980. This Act is named after its sponsors, United States Senators Birch Bayh (D-Ind) and Robert Dole (R-Kan).
Prior to 1980, any invention discovered or created through the expenditure of so much as one dollar of federal funds was owned by the United States government — and each governmental granting agency had its own policies regarding how it would treat these inventions. Resources for evaluating and patenting discoveries were rather limited. Thus, most federally funded discoveries sat aging in the federal archives and were rarely given the opportunity to make it to the marketplace where they could be of benefit to society. The Bayh-Dole Act changed all of that. It gave non-profit institutions and small businesses the right to elect title (i.e.: ownership rights) to their inventions that had been sponsored by federal funds, so long as these institutions agreed to pursue the development of the technologies. The income generated through the licensing of technologies provides an added incentive for universities to carry out technology transfer. The primary motivation, however, has been — and continues to be — the advancement of knowledge and the improvement of the human condition.
Universities have certain responsibilities incumbent under Bayh-Dole, such as reporting inventions to the funding institution(s) in a timely manner and sharing income from those inventions with the inventors.
The government retains certain rights, including a non-exclusive, irrevocable, “paid-up” license to practice the invention and the right to license the invention to third parties under exceptional circumstances, such as critical unmet public health needs.
To keep up with the extensive reporting requirements, and to ensure compliance with Bayh-Dole, most universities have established an office to coordinate technology transfer activities. At the University of Rochester, this office is UR Ventures.
It is the function of these offices to receive invention disclosures from scientists and technologists, to evaluate the disclosures for merit as well as the type of intellectual property protection that is most appropriate, to see that the proper filings or registrations are carried out, to market the inventions to potential commercial partners through licensing efforts, to monitor the patent filings and license agreements, and to ensure compliance with Bayh-Dole reporting requirements. In addition, offices of technology transfer are often responsible for other kinds of agreements related to intellectual property and proprietary information and materials.