Trends in Industry-Sponsored Research and Invention Disclosures at the University of California Rebecca Stanek-Rykoff, Charles Drucker, Dorothy Miller, UCOP

Abstract Research projects which include an industry sponsor for funds make up a disproportionate number of the invention disclosures at the University of California (UC). We consider trends in industry-sponsored research since fiscal year 2002 (FY2002), and in invention disclosures with industry sponsors since FY2005, at the University of California (UC). Both measures are dominated by a small number of companies: fewer than 10% of all industry sponsors make up 50% of the grant awards, and fewer than 10% of all industry sponsors are cited in 50% of the invention disclosures. For 68 companies cited as a sponsor on at least four disclosures since FY2005, we are able to find the total awards made to UC since FY2002. We present the average award amount per invention disclosure, and find that the distribution of this metric has a significantly higher median for research projects classified as “Engineering” than those classified as “Medical”.

Background Research grants from federal government agencies make up the vast majority of research funding at US universities, including the University of California (UC). Given the volatile nature of federal awards due to events such as the America Reinvestment and Recovery Act (ARRA) in 2009, and the sequestration in 2013, universities are turning to industry-sponsored research to carry over the tide. From fiscal year 2002 (FY2002) through FY2014, industry-sponsored research comprises an average of 5.27% of the total research awards to UC. (See Figure 1.) As seen in Figure 2, this is dominated by the small number of companies which have invested over $20 million in research at UC since FY2002. Following the passage of the Patent and Trademark Law Amendments Act of 1980, commonly known as the Bayh-Dole Act, the University of California began actively patenting and managing inventions made in the course of federally funded research. Since 1980, UC has seen a steady increase in the number of disclosed inventions, U.S. patented technologies, active licenses and number of startup companies formed based on UC assigned inventions. As seen in Figure 3, the number of invention disclosures from each corporate sponsor is dominated by a handful of companies.

Figure 1: The fraction of total research awards from an industry sponsor (green) and the fraction of invention disclosures citing an industry sponsor (blue).

Methods This work made use of two University of California (UC) databases: the Contracts and Grants (CGX) database, which has records on research awards across the system, and the Patent Tracking System (PTS), which tracks invention disclosures, patent prosecution, and license agreements for all intellectual property assigned to UC. We look at all grant awards from FY2002 through FY2014, and all invention disclosures from FY2005 through the second quarter (Q2) of FY2015. The staggered time periods are to allow for a time lag between award and disclosure. The two databases are not connected in any way. Invention disclosures must include a listing of all sponsors of the research projects which led to the invention. Federal law requires that invention disclosures citing federally funded research be reported back to the funding agency; similar requirements exist for industry-sponsored research. PTS thus has a complete listing of sponsors for each invention disclosure; however, grant award number is generally not included. Award sponsors in CGX have been matched to cited sponsors in PTS; individual grants are not able to be matched to individual invention disclosures. All data from PTS is anonymized in this presentation. All data is measured on the UC fiscal year, which is July-June.

Figure 2: Companies with over $20 million of sponsored research invested in UC since FY2002, with a breakdown by campus.

Figure 3: Number of invention disclosures citing a given industry sponsor since FY2005, among those that had at least four disclosures in that time frame.

Result We are able to match 68 companies with at least four invention disclosures in the time period FY2005 through Q2 FY2015 to industry sponsors in the time period FY2002 through FY2014. We categorized companies as “Medical”, “Engineering”, “Agriculture”, or “Venture”. As only four companies were categorized as “Agriculture”, and only one as “Venture”, we did not include them in the full analysis. For 40 companies classified as sponsoring Engineering research, we found that the median dollars awarded per invention disclosure was $781,000, with a standard deviation of $1,291,000. As seen in Figure 4, this standard deviation is driven by a few companies with a ratio of dollars per disclosure of well over $2,000,000. For 23 companies classified as sponsoring Medical research, we found that the median dollars awarded per invention disclosure was $482,000, with a standard deviation of $5,279,000. Four companies had a ratio of dollars per disclosure over $8,000,000, and one company had a ratio of dollars per disclosure of $20,000,000, as shown in Figure 5. It is likely that different stages of research are driving a bimodal distribution in this metric; future work will separate clinical trials from other medical-related research.

Figure 4: Total award data per cited invention disclosure for companies classified as sponsoring Engineering research.

Figure 5: Total award data per cited invention disclosure for companies classified as sponsoring Medical research.

Conclusion Industry-sponsored research plays an outsized role in the technology commercialization operations at the University of California (UC). Among industry sponsors, a small number dominate the industry awards, and a small number dominate the invention disclosures. These companies are engaged in long-term research sponsorships with UC, and Wright (2014) shows that industry-sponsored research is more likely to be licensed than other basic research, even if not by the original corporate sponsor. It is unlikely that industry-sponsored research will ever comprise more than 10-15% of the overall research budget of UC. However, this work shows that any increase in the total industry awards can result in a significant increase in the direct societal impact of UC research, as measured by technology commercialization metrics such as invention disclosures and license agreements. Future work will match invention disclosures to individual grant awards, which will allow us to measure the average time from award to disclosure. This will also allow us to consider clinical trials separately from the rest of the medically-related research. Clinical trials generally involve much larger grant awards than other stages of medical research, and may take place before or after the filing of an invention disclosure.