The university challenge

Robert A. Bailey and Roberta J. Hanson of Faegre & Benson unravel the complexities of licensing technology from a US university

The number of patents owned by universities and the resulting revenue generated by licensing these patents has increased significantly in the last several decades.¹ A current estimate of yearly revenue generated by the licensing activity of university patents exceeds a billion dollars.² One reason for this increase in university patenting and licensing in the United States is the enactment of the Bayh-Dole Act promoting “utilization of inventions arising from federally supported research or development.”³ The Bayh-Dole Act created a uniform policy, which allows universities to retain ownership of patents derived from federally-funded research. As a result, many universities in the United States created technology transfer offices (TTOs) to ensure that the university’s rights are promoted by obtaining patents and the corresponding financial revenue streams that are created through the licensing of the patented technologies.