US tech transfer adds $1.18 trillion to economy

As the debate around changes to US patent law continues, a new study has underlined a significant contribution from US tech transfer operations to the US economy.

Covering contributions between 1996 and 2013, the report estimated that academia-patent licensing raised US gross industry output by $1.18 trillion, added $518bn to gross domestic product, and has supported 3,824,000 jobs.

The study, dubbed Economic Contribution of University/Nonprofit Inventions in the United States 1996-2013, was commissioned by life sciences trade association Biotechnology Industry Organisation (BIO). It supports the results of the Association of University Technology Managers (AUTM) latest licensing impact survey, which shows 818 startups founded on academic patents in 2013, 4,200 spin-outs currently operating, $22.8bn in product sales from commercialised inventions, and 719 new products introduced into the market.

The report comes shortly after 144 universities wrote to the US House and Senate Judiciary Committees earlier in the month to challenge drafted changes to patent law. Under the new proposals, patent legal battles will be conducted under a system similar to English Rule, used in every Western country apart from the US, where the loser of a legal case pays the winners legal fees.

The changes have been suggested to try and counteract the effects of “patent trolls” on US innovation. The trolls have been accused by startups and major tech firms alike of building and utilising vast pools of vague patents for the sole purpose of instigating legal challenges against tech firms. This process, the tech firms argue, hampers development as firms are forced to spend resources on court room battles instead of increasing resources which would enhance their businesses.

However, the universities argue that the current changes are being rushed through without due consideration, and that the increased risk of having to pay for legal costs incurred by successful challenges from the trolls would increase risk. Subsequently, university tech transfer operations would be negatively impacted as less potential licensees would come forward, venture capitalists would be put off investing in university patents, and would discourage universities lacking litigation resources from conducting commercialisation activities in the first place.

Jim Greenwood, BIO’s CEO, said: “This study provides further evidence that the Bayh-Dole Act, which allows inventions arising from federally-funded research to be patented and licensed by the research institution, has been enormously successful in encouraging industry to partner with academic institutions to turn basic research into new and valuable companies, jobs, and products that are driving America’s innovation economy. As Congress considers changes to our patent system, policymakers should keep in mind the value of commercialised academic research and the good, high-paying jobs it generates throughout the country.

“We cannot take tech transfer, or the U.S. patent system upon which it is based, for granted, particularly in the current economy and in light of the continuing attacks by some on our patent system. Preserving this system is critical to ensuring continued U.S. economic revival and spurring the next wave of American innovation in the life sciences. The ties between biotechnology and academic research have always been critical. Often, biotech companies license technologies from academic or nonprofit research institutions, and the continuation of this relationship – along with a strong, dependable patent system and flexible licensing practices – is essential to maintaining America’s global leadership in biotech innovation.”