By Matt Bauer
In academia, many of the scientists who are recognized as inventors on patents see little economic gain from these agreements.
Instead, royalties are primarily assigned toward their home institutions.
The scientists who drive discoveries within the walls of academia are not receiving an equitable share of the benefits of their innovations. Despite being the source of these discoveries, students and postdoctoral researchers don’t see the financial upside of the commercialization of their inventions.
Patents give inventors the ability to exclude others from replicating their invention for a designated period of time — generally 20 years in the U.S. This creates a limited monopoly for the patent holders for the period of time that the patent is valid.
A recent study looking at intellectual property licensing out of MIT showed that by 2018, more than half of the top 30 drugs in the U.S. were sourced from academia, and not large pharmaceutical companies. This highlights that academic institutions are the predominant source of medical innovation.
Patents for researchers such as graduate students, postdoctoral fellows and faculty also serve as signal of academic promise. As patents are important sources of achievement within both academic and industry science. One example of the prolific patent portfolios of universities, is MIT, who between 1969-2012 was granted just over 4,000 utility patents according to the USPTO.
These academic institutions can bring in significant sums of money from patent royalties. But the minds behind these patents – graduate students, postdoctoral fellows, research staff, and faculty – generally do not see the full spoils. This is because patent ownership is typically transferred or pre-assigned to the university or company where the inventor is employed. Royalties from the patent are then split according to university or company policies.
Universities may disburse royalties to academic departments, administrative offices, the university’s president’s office, and a number of other groups. At Harvard University, for example, the percentage of a patent royalties allocated to inventors is 35%, after an initial administrative fee of 15%. This royalty rate is also likely split equally amongst all inventors on the patent.
Accordingly, inventors see only a small percentage of the royalties from their patent being sold or licensed outside of the university. While universities make innovation possible by paying much of the up-front costs for research, development, and patent applications, inventors seem to get short shrift in these arrangements.
And this reflects a best-case scenario, in which the patented technology is licensed or sold. Patents generate profits only insofar as this is the case, however some companies do issue bonuses for inventors on technology that ends up being patented.
But performance-based bonuses are not a standard practice at universities. Typically, graduate students receive a stipend and postdoctoral fellows’ salaries are set by the NIH. These salaries are significantly less than industry equivalent jobs. Yet, many scientific innovations come from graduate students and postdoctoral fellows. We can and should do better to equitably compensate individuals who drive scientific innovation.