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A Confluence of Non-Practicing Entities
Taxpayer-Funded University Patents 2022
Hello from FedInvent,
Today we report on the FedInvent analysis of taxpayer-funded university patents granted in 2022. Taxpayer-funded university patents are a lightening rod for Bayh-Dole maximalists, universities, and technology transfer offices, and the "taxpayers-paid-for-it-taxpayers-should-own-it" coalition that seeks to overturn Bayh-Dole or at least make significant changes to how the Bayh-Dole Act works.
The tale of taxpayer-funded university patents is the story of the confluence of two non-practicing entities, the federal government, and America's research universities. The federal government, the largest funder of R&D in America, doesn't manufacture anything other than a few munitions here and there. Research universities don't manufacture any of the things they invent either. Both the government and research universities rely on intermediaries to turn their inventions into products.. But both groups of non-practicing entities spend an epic amount of taxpayer money on research and development.
According to the Congressional Research Service, the federal government spent $160 billion on R&D in 2021. In government fiscal year 2023, federal R&D spending is projected to top $200 billion.
In 2021, NSF reported that total HERD R&D spending — higher education research and development entities, universities, colleges, and other academic institutes, racked up $89,7 billion in R&D-related expenses. The federal government funded $49 billion of that spending, 55% of HERD R&D, Sixty-three percent (63%) of that money funded basic research. Eighteen percent (18%) funded applied research and experimental development.
You can see the 2021 R&D expenditures by university here.
This newsletter will have something for everyone. We're starting with the data and some interesting discoveries in 2022's collection of university patents. Then comes a discussion on Bayh-Dole and university patents. And finally, some prognostications. But before we start, here are the links to the latest FedInvent Reports.
The 2022 Rundown
In 2002, 4,082 taxpayer-funded patents had one or more assignees that is a higher education R&D (HERD) entity — colleges, universities, and university-affiliated post-doctoral and academic medical centers. These patents accounted for 58% of all taxpayer-funded patents last year. Two hundred fifty-six (256) separate HERD entities are an assignee on patents granted in 2022.
University patents lean toward biotech and organic chemistry and chemical and materials engineering. Semiconductors, electrical and optical systems, and electronics patents accounted for 624 HERD patents. The table below shows the technology center breakdown for patents with at least one assignee that is a HERD entity.
The table above doesn’t include plant, design, or re-examination patents.
The 2022 Leader Board
The top ten university patent recipients in 2022 are:
University of California System — 335
Massachusetts Institute of Technology — 209
Harvard College — 124
University of Texas System — 109
California Institute of Technology and University of Wisconsin — 96
Purdue University and University of Tennessee — 92 each
Stanford University — 91
Johns Hopkins University — 90
University of Chicago — 76
University of Florida — 72
Numbers To Consider
3,726 — Patents With One HERD Assignee: Number of university patents assigned to a single university.
356 — Collaborations: Two different university assignees appeared on 312 patents, three universities collaborated on 40 patents, and four university patents have four collaborators.
2,108 — HHS Funded Patents: Patents with funding citations from the Department of Health and Human Services (HHS). 52% of university utility patents have one or more funding citations from HHS.
2,089 — NIH Funded Patents: University patents with National Institute of Health (NIH) funding citations. Here's the breakdown by Institute:
1,020 — NSF Funded Patents: The total number of patents citing National Science Foundation (NSF) funding in 2022 is 1,020. Of those patents, 144 patents cite funding from the National Science Foundation and funding from HHS. One hundred sixty-seven (167) received funding from both NSF and DOD. The DOD Research Labs — DARPA, Air Force Office of Scientific Research (AFOSR), Army Research Office, and Office of Naval Research — funded 146 patents of those university patents. Fifty-two HERD patents were funded by NSF and the Department of Energy (DOE). The inventors listed on 18 university patents had funding from NSF and one of DOE's national laboratories.
757 — DOD Funded Patents: Department of Defense (DOD) funding was cited on 757 citations.
106 — Medical School Patents: The number of patents assigned to a medical school.
296 — Medical School Affiliated Institutions' Patents: University medical school-affiliated institutions received 296 patents. Harvard Medical School affiliates -- Children's Medical Center Corporation, The General Hospital Corporation, Dana-Farber Cancer Institute, Brigham and Woman's Hospital, and others -- accounted for 166 (56%) of those patents.
68 — Foreign University Patents: Patents with a foreign university as an assignee. Twelve patents have assignees from universities in Great Britain, including four from Scotland. Ten patents have assignees from Canadian universities. Nine have assignees at Chinese universities, including eight co-owned by a US university and a university in China.
66 — Patents Funded By SBIR Grants: The number of Small Business Innovative Research funded R&D. These are patents where the grant or contract cited on the patent went to a company, usually LLC, but the patent is assigned to a HERD entity. There are legitimate reasons for patents funded by SBIR grants to wind up in a university patent portfolio — collaborative R&D, licensing agreements that enable the university to handle licensing matters while the entrepreneurs focus on growing their company. Small businesses that aren't affiliated with research universities might have a different view of these SBIR-funded patents. Senator Rand Paul might frown on these patents as well.
19 — Patents Funded by the IC: Nineteen patents were funded by the US Intelligence Community. The Office of the Director of National Intelligence, Intelligence Advanced Research Projects Activity (IARPA) funded 13. The National Reconnaissance Office (NRO) funded 3. Two were funded by the National Security Agency (NSA), and one each funded by the Defense Intelligence Agency (DIA) and the Central Intelligence Agency (CIA). Six of these patents are focused on quantum computing. DIA funded Johns Hopkins to develop improved techniques for sealing undersea communications cable connection systems. (Good idea.)
A caveat on the HERD/IC patent count. These are the patents the FedInvent team could confirm the IC funded. The IC, however, is good at hiding where they spend their money, so there may be more patents out there.
5,486 — The HERD Pipeline: There were 5,486 published pre-grant patent applications with a HERD entity as an applicant, an assignee, or college professor inventors hiding in plain sight. By the time the patents are granted, most college professor inventor applicants morph into patents assigned to their academic institution. Arizona State University uses this tactic. Year-over-year in the 2020s, HERD patents accounted for 66% of the published patent applications that received taxpayer funding.
Trigger Warning — Provocative Notes Follow
Mapping a university patent's path from the lab to the marketplace is daunting. No single source identifies which university taxpayer-funded patents have been licensed and which are languishing in the technology transfer office. Nor is there a way to identify the products that use the invention unless a press release touting a new university/industry collaboration exists.
Much of the patent tribe prefers to keep licensing information confidential. This group considers licensing information to be a trade secret. Disclosure directly impacts the competitiveness of the licensee.
Others, usually not fans of Bayh-Dole, want more transparency. They believe the information on whether a taxpayer-funded patent is licensed, the license terms and conditions, and the flow of royalties should be public. Those seeking more transparency may be getting new attention. We also believe universities should not be able to enter exclusive licensing agreements before their patent applications are published. An announcement of a university's intention to enter into a patent licensing agreement at this stage doesn't cut it.
There are increasing drumbeats on the need for transparency on royalties on taxpayer-funded patents being paid to federal employees. You know this issue is percolating to the surface when Bayh-Dole is a topic on the Sunday morning political talk shows.
How Many HERD Patents Are Licensed?
The question remains, how many of the university patents that benefitted from taxpayer funding are licensed?
One recent paper, The Hidden Costs of University Patents, cites research that claims that 95% of a given university portfolio is not licensed. The same paper says, "Recent estimates peg commercially-licensed patents around 5 percent of the typical university patent portfolio.." The data points in the paper are from 2013.
A university patent project we worked on in 2014 found different licensing statistics. Instead of relying on proprietary databases to determine the number of licensed patents, this research used different indicia of licensing, patent fees. Universities are non-profit entities. As such, they are entitled to a discounted rate on the USPTO patent fees, a small and non-profit entity discount. Once a patent is licensed, that changes. When the patent is licensed, the university has to pay the un-discounted fees. By tracking the change in maintenance fee status for HERD patents, you have a reasonably reliable indicia of patent licensing. The fee schedule change is a strong indicator of licensing. University technology transfer offices are cost-conscious (cheap?). It is unlikely that they would pay higher maintenance fees without a reason.
This university license fee analysis project found that 36% of federally-funded university patents have switched from small entity status to large entity (undercounted status) over the patent's life. More importantly, this research found that a significant number of university patents were licensed at the time the patents were granted. (A hat tip to the university technology transfer offices.)
The table below presents data on how many university patents switched from the discounted fee schedule to the undercounted fees indicating that the patents may have been licensed. The paper Academic Patents and Technology Transfer is available here.
The bottom line here is that we need better data on taxpayer-funded patents.
The FedInvent catalog of taxpayer-funded HERD pre-grant published patent applications contains over 8,000 patent applications with filed dates in 2020 and 2021. So while the labs were closed and the grad students were working behind their laptops, researchers and their technology transfer colleagues wrote patent applications while watching Netflix and having Zoom meetings during the pandemic.
An Explosion of Numbers
This newsletter is jam-packed with numbers. Thanks for digging through it. Let us know if there is other information on the HERD that you'd like to see. You can reach us at email@example.com.
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Until Next Time,
The FedInvent Team
FedInvent tells the stories of inventors, investigators, and innovators. Wayfinder Digital's FedInvent Project follows the federal innovation ecosphere, taxpayer money, and the inventions it pays for. Please reach out if you have questions or suggestions. You can reach us at firstname.lastname@example.org.
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