University Licensing Deals Not Lucrative

Most universities fail to convert discoveries from their research into a major source of income, concludes a study from the Brookings Institution, a Washington, D.C., think tank. University technology transfer offices make thousands of licensing deals each year with private firms to turn their schools’ patented research into commercial products. But the study estimates that in a typical year, only 13% of research universities will recoup enough revenue to cover the costs of running technology transfer offices. This is in part because of how licensing royalties are distributed across the university, says study author Walter D. Valdivia. Typically, he says, licensing royalties are divided among the faculty inventors, their academic department or lab, and the school’s general fund. “Universities collect only one-third of the licensing revenues raised by the technology transfer offices but shoulder all of its operating costs,” Valdivia says.