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

While the previous chapter looks at the overall structure and operation of the technology transfer system of the 10 campuses of the University of California (UC), this chapter takes a closer look at the specific results of the UC technology transfer system with agricultural technologies. UC serves as the Agricultural Experiment Station (AES) for the state of California, under funding from the U.S. Department of Agriculture (USDA). This chapter reports the actual numbers of inventions disclosed, patented, and licensed—and for how much—arising from the research of UC scientists that have received AES funding over the last 40 years. The data reported provides one of the most detailed and comprehensive pictures available of the inner workings of a university technology transfer program. As such, it provides a realistic view of what kinds of results have been—and thus can be—achieved in IP management in agricultural innovation.

Some important technology-linked characteristics of IP management in agriculture stand out from this chapter. The scope of patentable agricultural inventions at UC spans the fields of engineering, environmental sciences, chemistry, biotechnology, and plant breeding. However, not all of these areas behave similarly in terms of IP protection and technology transfer. Some of these areas, especially plant breeding, account for disproportionate shares of the revenue via licensing. Also, activity in some areas—particularly biotechnology and environmental science—has grown much more rapidly than in other areas.

The distribution of overall financial returns by invention, as detailed in this chapter, are highly characteristic of technology transfer programs everywhere: 88 percent of UC’s agricultural licensing revenues having been generated by just 1 percent of the agricultural inventions handled by UC’s technology transfer program. In addition, an examination of the list of the top earning inventions reveals a disproportionate number of the big hits for UC’s agricultural researchers have been by plant varieties—strawberries, grapes, and avocadoes—perhaps a surprise coming from a university that is certainly more famous as a biotechnology powerhouse.

The dynamics of financial performance revealed in this chapter are also highly characteristic. Generally, it takes a significant investment in time, resources and money to establish a solid technology transfer office. Revenues grow slowly over time, with current income largely resulting from inventions made ten or more years earlier. Furthermore, expenses are not entirely covered by cost reimbursements, with only about a third of expenses covered by reimbursement. However, a well-run licensing program based on a significant base of scientific work can consistently run a positive net income.

The chapter closes with several key observations about UC’s agricultural licensing program:

• The protection of technologies with IP rights means that a clear accounting is kept of commercially viable results from AES research.
• Protection under foreign filings means that, when foreign competitors want to use a technology developed by California, they need to negotiate with California in order to legally use it.
• Protection encourages (perhaps otherwise reluctant) companies to invest in earlier-stage technologies, making these far more likely to be developed so as to benefit the state’s economy and thereby serve the greater public good.
• The collection of licensing fees and royalties works like a highly targeted subsidy. The companies and growers that benefit will, in turn, support the selfsame research and education, that then generates future innovations of further benefit to their businesses.
• The payment of an inventor’s share of royalties works like a research prize, rewarding researchers for innovations that are effectively taken up in the economy, and in proportion to how significant that contribution is to the economy.

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

• The University of California (UC) is a good example how clear policies and targeted licensing practices led to significant benefits to the local and regional economy.
• Expectations for a research program to directly support itself from IP protection and licensing are unrealistic. For example, significant annual revenues only began to accumulate in the 1990s, but today are still are less than 10 percent of the annual agricultural research budget of the UC system.
• Protection under foreign filings means that, when foreign competitors want to use a technology developed by a university or research institution, they need to negotiate with, and compensate, the university or research institution to use it.

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

• The distribution of licensing returns to individual inventions is highly skewed. Effective IP management is thus done on a portfolio basis. It is impossible to pick winners. It is also not very meaningful to take averages in terms of performance or returns.
• A well run agricultural licensing program based on a significant base of scientific work can consistently run a positive net income.
• The revenue flow from licensing of university technologies is highly skewed, with a disproportionately small number of key technologies generating the bulk of the flow. For example, 88 percent of agricultural licensing revenues by the University of California (UC) have been generated by just 1 percent of the agricultural inventions handled by the UC technology transfer office.
• Not all technology areas behave similarly in terms of IP protection and licensing. Some areas—especially plant breeding—account for disproportionate shares of revenue. Also, activity in some areas—particularly biotechnology and environmental science—are likely to grow much more rapidly than others.

For Scientists

• The top earning inventions by the University of California (UC’s) agricultural researchers reveals a disproportionate number of big hits by plant varieties—strawberries, grapes, and avocadoes—perhaps a surprise coming from a university that is more famous as a biotechnology powerhouse.
• Have realistic expectations of intellectual property (most notably patents and plant variety protection) arising from your research program. For the most part, they will not generate significant revenue streams. Yet, they may still contribute to the longer-term growth of technological innovation in your field and your institution.

For Technology Transfer Officers

• Clear documentation of the inventions and licensing income you manage can help to communicate clear expectations to your senior managers and political leaders.
• Recognize that there are likely “revenue workhorse” technologies, such as crop varieties protected under plant variety protection certificates, which should be consistently and wisely managed. Beguilingly enticing emerging technologies, such as biotechnology, may well generate less revenue and should therefore not overshadow investments in the workhorse, proven, revenue generators.