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Size counts: Outcomes of intellectual property (IP) commercialization

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by Cathy Read, SIEID, Statistics Canada

This article uses data from the 2004 Survey of Intellectual Property Commercialization in the Higher Education Sector to examine the relationship between the amount of research conducted and the outcomes of intellectual property (IP) commercialization. The results show that most university IP commercialization is taking place in large institutions. In addition, income per total active license was lowest for small universities ($4,000) and increased with university size. However, hospitals had the highest income per total active license ($29,000) compared to $25,000 overall.

About this article
Findings
Summary
About the author

About this article

The Survey of Intellectual Property Commercialization in the Higher Education Sector, which has been conducted annually since 1998 (with the exception of 2000 and 2002), tracks such indicators as inventions reported to the institution, patent applications filed, income from IP and spin-off company formation.

A working paper with complete results from the 2004 survey was released in The Daily on October 4, 2006.

For the purpose of this study, universities were divided into three size categories according to their income from sponsored research: less than $25 million (in which there were 58 universities); $25 million to $79 million (10 universities); and $80 million or more (18 universities). These categories are denoted as "small," "medium" and "large." The division was done in order to protect respondent confidentiality.

Findings

Small universities accounted for 5% of sponsored research but only 3% of inventions disclosed, 4% of inventions protected, 2% of patent applications filed, 2% of patents issued, 1% of total patents held, 2% of new licenses and options, 1% of total active licenses and options, 1% of income from IP and 2% of spin-off companies created to date. In other words, small universities accounted for a lesser proportion of IP commercialization outcomes than their share of sponsored research.

One explanation for this finding could be that small universities tend to focus more on the liberal arts and less on science programs, particularly at the graduate level where most research is performed.

Medium-size universities accounted for 11% of sponsored research and an equal or higher proportion of inventions disclosed (12%), inventions protected (12%), patent applications filed (11%) and spin-off companies created to date (20%). The remaining outcomes were lower: patents issued (9%), total patents held (6%), new licenses and options (6%), total active licenses and options (6%) and income from IP (3%).

The sequence of events can be followed from research funding as an input to the process, to outputs such as invention disclosures, inventions protected, patent applications filed, patents issued, new licenses executed, income earned and spin-off companies created. Note that for small and medium-size universities, the percentages trend downward through the sequence.

Table 1 Outcomes of intellectual property commercialization in the higher education sector, by size, 2004. Opens a new browser window.

Table 1
Outcomes of IP commercialization in the higher education sector, by size, 2004

In contrast, large universities accounted for 84% of sponsored research and had an equal or higher proportion on all but one indicator: 85% of inventions disclosed, 84% of inventions protected, 87% of patent applications filed, 89% of patents issued, 93% of total patents held, 92% of new licenses and options, 93% of total active licenses and options and 96% of income from IP. However, large universities were responsible for only 78% of spin-off companies formed.

Clearly, most university IP commercialization is taking place in large institutions, both in absolute numbers and proportionately. The amount of research funding is most likely the single biggest factor related to IP outcomes.

For large universities, the percentages trend upward through the sequence of IP commercialization events. One reason could be the more established technology transfer programs in large universities. There are proportionately more patents held and more active licenses in large universities because they have been engaged in technology transfer longer. It would be expected then that small and medium-size universities will eventually show better results in the latter stages of IP commercialization.

Some additional differences are apparent when examining the indicators as ratios.

Table 2 Outcomes and ratios of intellectual property commercialization in the higher education sector, by size, 2004. Opens a new browser window.

Table 2
Outcomes and ratios of IP commercialization in the higher education sector, by size, 2004

Readers should note that there are timing differences between IP commercialization events. For example, for small universities in 2004, 33 inventions were disclosed and 19 were protected. However, the latter are not necessarily a subset of the former because an invention disclosed may not be protected until a subsequent year. Despite this limitation, the indicators were examined as ratios because theoretically at least, the timing differences should be equal for all institutions.

Hospitals and small universities stood out in several ways and some similarities were noted. The percentage of inventions protected versus disclosed was highest for hospitals (62%) and second highest for small universities (58%) compared to 44% overall. The percentage of new versus total active licenses was highest for small universities (50%) and second highest for hospitals (46%) compared to 24% overall. The number of patent applications filed (in various countries) per invention protected was lowest for hospitals (0.9) and second lowest for small universities (1.5) compared to 2.0 overall.

Hospitals had the highest income per total active license ($29,000) compared to $25,000 overall. They also had the highest percentage of patents issued per application filed at 35% compared to 31% overall.

In contrast, income per total active license was lowest for small universities ($4,000) and increased with university size.

Summary

Overall, most university IP commercialization is taking place in large institutions, both in absolute numbers and in proportion to research funding. In addition, income per total active license was lowest for small universities ($4,000) and increased with university size. However, hospitals had the highest income per total active license ($29,000) compared to $25,000 overall.

About the author

Cathy Read is with the Science, Innovation and Electronic Information Division (SIEID) at Statistics Canada. For more information about this article, please contact sieidinfo@statcan.gc.ca.