Comstock's magazine 1217 - December 2017 | Page 44

n INTELLECTUAL PROPERTY
eaders at UC Davis have long touted the school’s
role in helping fire Sacramento’s economy. They’ve
produced numbers to back that up: A university-
commissioned report last spring showed that in the
seven-county region, the campus generated almost
$7 billion in economic activity and about 65,000 jobs.
But the school gives the market another boost
that doesn’t show up in those numbers ­— its intellec-
tual property (read: ideas and inventions)
turned into products and startups that
spark more spending and create jobs.
Entrepreneurs pay for licenses to use that IP in launching
their ventures. Often it’s not an outside company buying
the license and spinning off a business — it’s a current or
former school employee. But some experts and entrepre-
neurs worry that the UC system over-emphasizes revenue
at the expense of getting innovative ideas into the market.
COMPETING MISSIONS
There’s no better example than Stanford of how a river of
ideas can grow a cluster of booming companies down-
stream. Stanford’s research on solid-state physics and
related disciplines created a wave of inventions. Those
moved the computer industry from vacuum tubes to semi-
conductors and helped turn the fruit orchards of the South
Bay into Silicon Valley.
That f low of IP produced a win for all sides — the spi-
noffs begun as a result of technology developed at the
school gave it a reputation as a world-class university, and
the regional economy gained thousands of high-paying
jobs.
Most IP moves from universities into the market in in-
formal ways — as when students become skilled workers
in the private sector, or when researchers publish aca-
demic papers or take speaking engagements to share what
they’ve learned. But the formal mechanism for pricing and
selling licenses to use university IP is known as technology
transfer.
To that end, most major research universities have
tech-transfer teams to negotiate compensation for the use
of their IP by private entities. But because universities are
publicly funded, these teams have another, sometimes-
competing mission: to contribute to the public good by
creating new businesses, products and jobs. Getting the
balance right — moving the most ideas possible to market
while selling IP licenses to earn revenue for the school — is
no mean feat.
That ideas-to-market mission has a big impact on the
state economy. Between 1968 and June 2015, 1,267 com-
panies in just the STEM-related fields launched using
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UC-generated IP or were founded by faculty, staff or students
within a year of finishing their UC affiliation, according to a
UC-commissioned report by the Bay Area Council Econom-
ic Institute last August. About half those companies are still
in business, nearly all of them headquartered in California.
Those in California support at least 146,000 jobs and add at
least $20 billion yearly to the state economy.
As for the IP-to-revenue mission, licenses issued for UC
inventions have generated an average of $125 million an-
nually for the latest four years for which there are data. Six
varieties of strawberries licensed by UC Davis, for example,
brought in $7.5 million in 2015, according to UC statistics.
But the bitter legal battle that surrounded those straw-
berry strains also shows the disputes that arise over how
transfer of IP to private companies should be handled. UC
Davis charged that two university scientists who left the
school in 2014 took with them genetic strains they’d devel-
oped while employed there and used them to design newer
varieties. But the scientists accused the school of refusing
to grant them access to patents on plants they’d developed.
UC Davis sued, and the scientists countersued.
In May, after a jury found for UC Davis, Federal Judge
Vince Chhabria read an extraordinary statement: “... Both
sides profess to care a great deal about California’s straw-
berry breeding program,” h