A patented alternative

Licensing innovation is central to the University’s revenue future.

Squeezed by declining state aid, University of Minnesota administratorsâÄô knee-jerk tuition response has overlooked the potential value of the UniversityâÄôs greatest asset: its intellectual capital. While University researchers do groundbreaking work, administrators are not following through by monetizing campus-led innovation. Of the massive $3 billion annual budget, just $85 million comes from revenues on patents licensed to outside companies. Worse, royalties from the UniversityâÄôs blockbuster AIDS drug Ziagen have provided 95 percent of license income in recent years âÄî a revenue stream scheduled to expire in 2013. Although a 2006 Forbes study ranked the University seventh in the nation for patent revenue, we could be doing much more. Forbes listed the UniversityâÄôs return on its research investment at 9.4 percent, while the top-ranked New York University garnered an astronomical 75 percent yield. The administration must aggressively pursue commercial applications for our large research portfolio. Current policy generally distributes earnings from patent licenses by thirds, with the University, the researchers and the college and department each taking a share. The Office of Technology Commercialization should adopt more flexible payment mechanisms that reward novel collaborations and dialogue between departments. Working with business is also an essential component of finding alternate revenue sources. A state House committee heard investor testimony last year that the University has seemed more interested in protecting its intellectual property than working with business. The University can no longer afford to miss out on these revenue opportunities.