Though Yale participated in a survey of 165 colleges and universities showing the institutions had filed for a record number of patents and earned almost $1 billion in combined licensing revenue last year, the Yale Office of Cooperative Research requested the school’s data not be published individually. The University was one of seven, including Columbia University, whose data remained anonymous.
OCR Managing Director Jonathan Soderstrom said the office has withheld attribution of specific data to Yale’s name because it believes licensing income does not reflect other positive results of University innovations, such as new biotechnology companies and large sums of venture capital.
“I don’t believe the measure of our success should be the royalty dollars brought in,” Soderstrom said. “So this is my little world of protest.”
Over the last five years, Soderstrom said, the expansion of biotechnology in New Haven has helped the city’s economy. The start-ups have attracted more than a billion dollars in equity investments and have increased real estate values, he said.
The survey, released this month by the Association of University Technology Managers, also showed universities reported a greater number of marketable scientific discoveries in 2003 than ever before, a trend to which Yale has contributed, Soderstrom said. He said the number of inventions and innovations coming out of the OCR has been steadily increasing.
When AUTM reported Yale ranked fourth among American universities in revenue generated from licensed discoveries in 1999 — earning more than $40 million in royalties — the OCR attributed most of its returns to therapeutic drugs such as ZERIT, which is used in HIV treatment.
In 2001, after Yale law students and the organization Doctors Without Borders pressured the University and Bristol-Myers Squibb to make the drug affordable in South Africa, the University stated it has no control over the applications of its patents once licensing agreements are signed. While Bristol-Myers independently decided to provide the drug at reduced cost shortly after the issue was publicized, concerns that Yale’s patent process was unethical persisted on campus.
Daniel Kevles, a Yale professor specializing in science history, said licensing profits create an important incentive for inventors and promote medical and technological advances.
“Much that is discovered and that contributes to the advancement of knowledge is neither patented nor patentable, especially in fields such as cosmology,” Kevles said. “But the argument for patenting is that it provides incentive to innovation. Quite a lot of investment is required to transform an invention into a marketable product, and patenting protects the innovator.”
Revenue generated from invention royalties can be used more flexibly by the University than donations specified for particular uses, Kevles said.
“All universities treasure unrestricted income, because that sort of money is difficult to come by,” Kevles said.
He said universities began seeing significant profits from technology-transfer into the private sector during the last decade.
Still, only nine percent of the surveyed schools reported more than $20 million of licensing revenues in 2003, with the majority of institutions earning $1 million or less.
Soderstrom said a portion of royalties received by the OCR are given to inventors on a sliding scale — providing them with 50 percent of the first $100,000 of licensing revenue, 40 percent of the next $100,000 and 30 percent of any additional income — while another portion of the royalties is used by the University for furthering research and education. He said Yale scientists will occasionally, but not frequently, step in to lead a company based in technology they developed.
Yale Provost Andrew Hamilton said the University does not direct faculty research based on profitability, but encourages faculty to pursue their own academic interests.
“The University as a general policy doesn’t dictate the emphasis of a particular research program, so there’s no overarching dictum from the University that particular research areas should be pursued by faculty,” Hamilton said. “The very nature of faculty research is that faculty pursue — interesting problems and determine the most exciting areas their research will pursue.”