Home > IP Topics Index > Putting Intellectual Property to Work: Experiences from Around the World > Technology Transfer at the University of California > Editor's Summary, Implications and Best Practices

The University of California (UC), based on its mission as a land grant university, has a long history of seeking IP protection for its research discoveries and managing these technologies for ultimate public benefit. By some measures, the UC technology transfer program is the largest public program in the world, involving the ten campuses of the University of California system, with annual research expenditures of US$ 2.9 billion and around 1200 invention disclosures (one invention for each US$ 2.5 - 4.5 million). The UC technology transfer program has evolved over the years but has always been at the forefront of university technology transfer. The history, policies, and organization framework of the UC technology transfer program may be instructive to administrators and policymakers responsible for technology transfer from a network of multiple institutions.

The University of California was founded in 1868 as the land grant university for the state of California, funded under the Morrill Act of 1862, with the objectives of providing both education and research to better the state’s agriculturally and industrially based economy. UC’s earliest experiences with intellectual property date to the 1920s when a few patents were issued to the University. A formal IP policy was adopted in 1943, but assignment and royalty sharing with inventors was managed on a case-by-case basis. A new policy was adopted in 1963 with terms that foreshadowed those of the Bayh-Dole Act of 1980.

The most important element in developing institutional capacity for technology transfer at UC has been the role of the university’s leadership in recognizing the importance of technology transfer as an activity that is central to its educational and research missions. They have given the UC technology transfer program solid support for several decades of and, as a result it has been a consistent net revenue generator for the University since the late 1980s.

In its best year—2002—the program generated over US$100 million in revenue which, after expenses and distribution to inventors, provided approximately US$30 million to support education and research across the university. While this represents a good business opportunity for the university, the financial returns are modest when placed in perspective of the total UC research budget of approximately US$ 2.9 billion. Expenses for the program in 2004 included US$14.3 million in operating costs and US$ 13.9 million in un-reimbursed legal expenses, reflecting the substantial investment that is required to manage a program on such a scale.

The program has been administered through six functional departments: Information Technology and Communications, General Counsel (legal), Licensing, Patent Prosecution, Financial Management, and Policy Analysis and Development.

• Information Technology has focused on the development and maintenance of an IP management database called the Patent Tracking System (PTS) and is critical to all aspects of IP management, integrating invention disclosure, patent prosecution, licensing, financial information, communications, and government reporting.
• Legal oversight for the technology transfer program, which routinely enters into contracts (licenses) on behalf of the University, is carried out by a dedicated IP group within the Office of General Counsel (OGC).
• Patent prosecution is responsible for managing the outside counsel who draft and prosecute patent applications on behalf of the University. They primarily perform a “docketing” function to ensure that external counsel meets critical filing or response dates and to assure that fees are paid on time.
• Policy analysis and development responsible for interpreting existing policy and providing consultation to licensing officers and researchers in complying with University policy as well as with state and national law.
• Financial management monitors the receipt of approximately US$100 million annually, payment of approximately US$20 million in attorney fees, and distribution of net revenues to inventors and each campus.
• Licensing maintaining sector-specific groups in “Life Sciences/Pharmaceuticals”, “Physics and Engineering”, and “Agriculture”. This is particularly helpful to have technical expertise in each area as well as to have knowledge of licensing norms in each industry sector, which differ significantly.

Perhaps the most distinctive features of the UC technology transfer system is the development of a distributed institutional network of ten university campuses that each operate relatively independently but share a common policy framework and certain resources provided by a central office. An ongoing structural trend in the UC technology transfer program has been its gradual transition from what was, early on, a highly centralized office to, more recently, a decentralized or distributed network of semi-independent campus-based technology transfer offices. Originally the central Office of Technology Transfer (OTT) at the UC Office of the President located independently in the San Francisco bay area handled all inventions from all UC campuses. This was beneficial in terms of sharing resources and quickly achieving economies of scale, but it suffered from a lack of proximity to the research laboratories on the campuses, failing to connect adequately with researchers and provide continuous and systematic contacts between them and the technology managers at OTT. Local campus offices were thus established, beginning in 1990 with UC Berkeley and UCLA, and continuing to include most of the other campuses.

An effective equilibrium between the central OTT and the campus offices has been based on the recognition that there are some program elements that can be effectively centralized and others that cannot, particularly those that require a direct interface with researchers, research sponsors, licensees, or local business interests. The centralized program elements are (1) uniform activities required to minimize legal or financial risk and (2) activities that can be consolidated to achieve economies of scale. These include financial management, information technology (database) services, policy analysis and development, and legal oversight. Program elements that are best decentralized to the campus-based technology transfer offices include invention disclosures and evaluation, patent prosecution, technology licensing, and business development activities.

This structure could be emulated at a variety of scales, including a network of institutions involved in a research consortium, a national network of universities, or an international network of research institutions linked by common policies and objectives.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• Technology transfer programs should be supported by the university and government policies, not because of the potential revenue generated, but because they serve the core missions of the university in education, research, and public service.
• Perhaps the most distinctive features of the University of California (UC) technology transfer system is its institutional network of ten university campuses that operate under a common policy framework, share resources, but operate relatively independently. This structure could be emulated at a variety of scales, including a network of institutions involved in a research consortium, a national network of universities, or an international network of research institutions linked by common policies and objectives.

For Senior Management (university president, R&D manager, etc)

• Finances managed by the technology transfer group are somewhat less “routine” than financial management in other university programs. And financial returns may not be immediate. For example, the University of California (UC) technology transfer program operated from the 1940s until the late 1980s before it became a consistent net revenue generator.
• The technology transfer program represents a good business opportunity for the university, but financial returns are modest when placed in perspective of the total UC research budget.
• UC presidents have supported the technology transfer program not because of the revenue it generates, but because it enhances the core missions of the university: education, research, and public service. Without such strong support, technology transfer programs are unlikely to achieve successful, longer term, outcomes.

For Scientists

• The role of your institution’s technology transfer office is to move inventions and innovations from research programs to development and commercialization. By cooperating with your technology transfer office, the efforts of you and your staff can bring tangible benefits for society, thereby fulfilling the mission of your program, your technology transfer office and your institution.

For Technology Transfer Officers

• The University of California (UC) technology transfer program has been administered through six functional departments: Information Technology and Communications, General Counsel (legal), Licensing, Patent Prosecution, Financial Management, and Policy Analysis and Development.
• Information Technology has focused on the development and maintenance of an IP management database called the Patent Tracking System (PTS) and is critical to all aspects of IP management, integrating invention disclosure, patent prosecution, licensing, financial information, communications, and government reporting.
• Legal oversight for the technology transfer program, which routinely enters into contracts (licenses) on behalf of the University, is carried out by a dedicated IP group within the Office of General Counsel (OGC).
• Patent prosecution is responsible for managing the outside counsel who draft and prosecute patent applications on behalf of the University, primarily performing a “docketing” function to ensure that external counsel meets critical filing or response dates and to assure that fees are paid on time.
• Licensing should maintain sector-specific groups in “Life Sciences/Pharmaceuticals”, “Physics and Engineering”, and “Agriculture”. It is particularly important to have technical expertise in each area as well as to have knowledge of licensing norms in each industry sector, which differ significantly.