The relationship between universities and industry: The American university perspective

The enactment of the Bayh-Dole Act in 1980 by the U.S. Congress allowed uni versities and small businesses to own patents on research which had been fe derally-sponsored. This has revolutionized the relationship between academi a and industry. The legislation allowed universities to license their paten ts to industry, exclusively or non-exclusively. Royalties, received by the universities for such licensing, are used for further research and educatio n as well as for rewarding the inventor(s). The intellectual property (the patent) is held by the university and licensed to new or existing companies . Intellectual property is also a key component in research collaborations between universities and companies. Although the interests of the academic and the industrial partner are very different, successful collaboration has been possible when both parties respect each other's interests and ease th e tension around intellectual property considerations. The thorny issue of publication from such collaborations is resolved by allowing the company 30 -60 days to examine the manuscript and determine whether patentable inventi ons are present. Within this period, the patent is filed and the academics are then able to submit the manuscript for publication. The industrial part ner is offered the following alternatives: (i) a non-exclusive license to t he technology at zero or nominal royalty; (ii) a royalty-bearing exclusive license; or (iii) a waiver of rights for a share of the university's licens ing revenues (the last being offered by only a few universities). The unive rsity charges the company the same overhead rate that it charges the federa l government on grants. Successful interactions between academia and indust ry rely on interpersonal (= interscientist) relations on both sides; freque nt contact is recommended. The royalty income of leading universities repre sents, on the average, about 0.5 to 2 % of the annual research budget. In a few cases, some successful universities have obtained major revenues from one or two very successful licenses. University licensing has led to the es tablishment of an impressive number of new companies. M.I.T. is currently g ranting 80 to 100 licenses per year to its technology, and spinning off 10 to 20 new companies per year; since 1987, 202 new companies have been found ed. Nationally, over 2000 new companies have been established around univer sity technology licenses.