UNIVERSITY OF CALIFORNIA
Technology Transfer Program
Annual Report
Fiscal Year 2004
Office of the President
Senior Vice President -- Business and Finance
Office of Technology Transfer
1111Franklin Street, 5th Floor
Oakland, CA 94607-5200
1
2004 Technology Transfer Advisory Committee
The general oversight of the UC Technology Transfer Program is under the purview of the Technology Transfer
Advisory Committee (TTAC). This standing committee is chaired by the Senior Vice President of Business and
Finance and includes representatives from the campuses and the DOE Laboratories managed by UC. The
committee meets periodically to advise the UC President on technology transfer policy and guide the direction
of the overall program.
Richard E. Attiyeh
Vice Chancellor - Research, UCSD
Alan B. Bennett
Associate Vice Chancellor - Research, UCD
Carol Berman
Contracts and Grants Coordinator, DANR, UCOP
Beth Burnside
Vice Chancellor - Research, UCB
Lawrence B. Coleman
Vice Provost, Office of Research, UCOP
Sherylle Mills Englander Director, Sponsored Projects, Office of Research, UCSB
Cheryl A. Fragiadakis
Department Head, Technology Transfer, LBNL
Warren M. Gold*
Professor, Medicine, UCSF
MRC Greenwood
Provost and Senior Vice President - Academic Affairs, UCOP
Susanne L. Huttner
Associate Vice Provost - Research and Director, Industry-University
Cooperative Research Program, UCOP
Charles F. Louis
Vice Chancellor - Research, UCR
Karena McKinley
Director, Industrial Partnerships and Commercialization, LLNL
Robert C. Miller
Vice Chancellor - Research, UCSC
Martin Moscovits
Dean, Division of Mathematical, Life, and Physical Sciences, UCSB
Joseph P. Mullinix
Senior Vice President - Business and Finance, UCOP
Andrew Neighbour
Associate Vice Chancellor - Research, UCLA
Christopher J. Newfield Professor, English, UCSB
Alan Paau
Assistant Vice Chancellor and Director, Technology Transfer and Property Services, UCSD
David G. Schetter
Assistant Vice Chancellor, Research and Technology Alliances, UCI
Hans Schollhammer*
Professor, Management, UCLA
William T. Tucker
Interim Executive Director, Office of Technology Transfer, UCOP
A. Eugene Washington
Executive Vice Chancellor - Research, UCSF
*Academic Senate representatives
2
Table of Contents
Overview
The University of California
technology transfer program
encompasses a range of activities
carried on throughout the UC
system to facilitate the
commercialization of promising
early stage technologies
developed during the course of
research. Increasingly, these
activities are extending beyond
the traditional patenting and
licensing of UC inventions to the
development of a variety of
relationships with businesses, industry, and government that
enhance the research and education missions of UC and
contribute to the economic prosperity of the State of California.
Fiscal Year 2004 was another outstanding year for UC’s overall
technology transfer program. Both the level of programmatic
activity and the level of financial performance exceeded that of
prior years. The addition of 1,196 new disclosures during the
year, which was a 16 percent increase over the prior year,
resulted in an overall portfolio of over 6,600 active inventions at
year-end. In addition, FY2004 marked the 10th consecutive
year that the University of California was named the leader
among the nation's universities in developing new patents
(USPTO report). Furthermore, UC entered into 373 new license
and related technology transfer agreements, a 13 percent
increase over FY2003. Systemwide revenues for the program
topped $93.2 million, also a 13 percent increase from the
previous year. These revenues represent income associated with
licenses to over 1,000 inventions.
Another key development in FY2004 was the inauguration of the
Office for Management of Intellectual Properties at UC Santa
Cruz under the management of Gerald Barnett. The
establishment of this Santa Cruz office shows UC’s commitment
toward strengthening technology transfer operations on the
campuses and recognition that campus-based technology
transfer operations create value for all of UC’s stakeholders.
This process will continue as we work together to build other
independent technology transfer offices.
Sincerely,
William T. Tucker
Interim Executive Director
Research Administration and Technology Transfer
3
Technology Transfer Advisory Committee
Welcome from the Interim Executive Director
Consider the Facts
Introduction
Part 1: The Campus Portfolios
Technology Transfer Activity
Invention Reporting
Patent Activity
Licensing and Related Activity
Technology Transfer Revenues
Total Licensing Revenues
Royalty and Fee Income
Payments to Joint Holders
Revenue Associated with Patent/
Legal Expenses
Technology Transfer Expenses
Legal and Other Direct Expenses
Operating Expense
Income Available for Distribution
Inventor Shares
Research Allocation Share
General Fund Share
Campus Share
2
3
4
4
5
5
6
7
9
9
9
10
11
12
12
13
13
13
14
14
14
Part 2: The DOE Laboratory-managed Portfolios
Invention Disclosure, Patenting, and Licensing
Activity
18
Financial Results
19
Technology Transfer Organization at UC
UC Technology Transfer on the Web
20
20
Introduction
Consider the Facts
•
UC leads the nation’s universities in the number of
inventions reported by researchers. In FY04,
inventors from the nine existing campuses reported
1,196 new inventions—more than three new
inventions a day. (See p. 5)
•
UC has received more patents than any other
university in the world.
•
UC has an active portfolio of approximately 6,600
inventions. From those inventions, more than 1000
generated fees and royalty income this year. (See p. 9)
•
UC’s total licensing revenue was $93.2 million in
FY04. The top 25 commercialized inventions earned
royalty income exceeding $62.2 million. (See p. 10)
•
UC technology transfer activities in FY04, resulted
in $19.5 million returning to the UC system for
reinvestment in research and education through its
General Fund and campus distributions. (See p. 14
& 15)
•
UC researchers share in the royalty income generated
through the licensing of their inventions. In FY04, a
total of 1,172 inventors received a combined total of
$25.3 million from UC inventions. (See p. 13 & 14)
•
University start-ups are a significant component of
technology transfer at UC. Well over 250 companies
have been founded to commercialize technologies
licensed from the UC campuses and UC-managed
DOE laboratories.
•
UC’s impact on agriculture is recognized in
California and around the world. At the end of
FY04, UC had over 470 plant licenses in place
worldwide. (See pp. 7 & 8)
Activity and financial information in this
Annual Report is divided into two parts. The
UC Campus Portfolio section (pp. 3-24)
presents results related to the patenting and
licensing of inventions for the nine-campus
system for the fiscal year ending June 30,
2004. This portfolio of inventions was
managed by the Office of Technology
Transfer (OTT) within the Office of the
President (UCOP) and seven campus-based
licensing offices. These include the Office of
Technology Licensing at UC Berkeley, the
Technology Transfer Services at UC Davis, the
Office of Technology Alliances at UC Irvine,
the Office of Intellectual Property
Administration at UC Los Angeles, Technology
Transfer and Intellectual Property Services at
UC San Diego, the Office of Technology
Management at UC San Francisco and the
Office for Management of Intellectual
Properties at UC Santa Cruz.
The DOE Laboratory-managed Portfolio
section (pp. 18-20) provides activity and
financial information related to technology
transfer at the three Department of Energy
(DOE) Laboratories managed by the
University. Information on the Laboratories is
reported separately because certain aspects of
technology transfer are different at the
Laboratories as compared with the rest of the
University. Among these differences is the
reporting period, which covers the fiscal year
ending September 30, 2004.
4
Part 1: The Campus Portfolios
TECHNOLOGY TRANSFER ACTIVITY
Invention Reporting
During the twelve-month period ending June 30, 2004, a total of 1,196 inventions were disclosed by faculty and
researchers at the nine UC campuses. This represents a 16% increase when compared with the 1,027 new
inventions reported in FY03 (Exhibit 1).
Exhibit 1 INVENTIONS REPORTED
1500
1196
1000
865
957
973
FY01
FY02
1027
500
FY00
FY03
FY04
Inventions in life science disciplines including medicine and biotechnology accounted for over 70% of the new
inventions, while those from the physical sciences and engineering accounted for most of the balance. Over
time, the pattern of invention disclosure by broad technology area has approximated the distribution of
extramurally-sponsored research at the University. The distribution of newly reported inventions by campus is
shown in Exhibit 2.
Exhibit 2 INVENTION DISCLOSURES BY CAMPUS*
Year Ended June 30, 2004
UCSD 300
UCSF 133
UCSC 20
UCB 124
UCSB 81
UCR 76
UCD 145
UCLA 186
UCI 133
*Inventions having inventors from more than one campus are counted multiple times, once for each campus with an
inventor.
As of June 30, 2004, the systemwide invention portfolio was comprised of 6,618 active inventions. The size of
each campus invention portfolio is indicated in the exhibit below.
Exhibit 3 CAMPUS INVENTION PORTFOLIOS*
Year Ended June 30, 2004
UCB
UCD
UCI
UCLA
UCR
UCSB
UCSC
UCSD
UCSF
753
775
486
948
268
398
75
1,718
1,246
*Inventions associated with inventors from more than one campus are reported multiple times in this exhibit.
5
Patent Activity
The University of California has received more patents than any other university in the world. A patent is a form
of intellectual property protection granted by the US or a foreign government that gives the patent holder the
right to exclude others from making, using, or selling the patented invention for a defined period of time,
generally twenty years from the date the patent application is first filed. Both US and foreign patent rights often
must be pursued for an invention in order to maximize the likelihood of successful commercialization.
Exhibit 4 PATENT ACTIVITY
Year Ended June 30, 2004
US Applications Filed
First Filings
Secondary Filings
Total
515
450
965
First Foreign Filings*
243
US Patents Issued
Foreign Patents Issued
270
589
*An invention is counted only one time in the first foreign filings category regardless of the number of countries in which
foreign patent protection is sought.
Systemwide patent activity for FY04 is presented in Exhibit 4. Acquiring adequate patent coverage for all aspects of a
new technology may require more than one patent filing for a given invention. Such secondary filings frequently lead
to the issuance of multiple patents related to a single initial invention. The growth in the number of inventions
reported throughout the UC system has resulted in an increase in both US and foreign patent filings (Exhibit 5).
Several years typically elapse between the time a patent is filed and the date of issuance. Exhibit 6 shows the number
of patents issued to the University in the past five years.
Exhibit 5 TRENDS IN UC PATENT FILINGS


U.S. First Filings
U.S. Secondary Filings

First Fo reign Filings
Exhibit 6 US PATENTS ISSUED TO UC
At the end of FY04, there were 3,024 US and 2,837 foreign patents in the systemwide portfolio (Exhibit 7). The
number of US patents in each campus portfolio is presented in Exhibit 8.
6
Exhibit 7 TOTAL UC PATENT PORTFOLIO


U.S. Patents
Foreign Patents
Exhibit 8 CAMPUS US PATENT PORTFOLIOS*
Year Ended June 30, 2004
UCB
UCD
UCI
UCLA
UCR
UCSB
UCSC
UCSD
UCSF
480
368
174
418
75
223
30
500
755
* Patents associated with inventors from more than one campus are reported multiple times in this exhibit.
Licensing and Related Activity
A license agreement grants a licensee access to a University invention in exchange for the licensee’s
commitment to further develop and commercialize the invention. Utility licenses generally cover useful
processes, machines, manufactured items, or compositions of matter protected by utility patents. Most utility
patents are licensed exclusively to a single company for a defined use, although non-exclusive licensing of utility
patents sometimes occurs. In contrast, plant licenses cover sexually and asexually reproduced plant varieties and
are licensed non-exclusively to multiple growers and distributors worldwide.
The provisions of the license define the rights and responsibilities of the two parties. In the typical license
agreement, the licensee is granted access to an early stage invention that is protected by a University patent. In
exchange, the licensee makes a commitment to commercialize the invention and pay the University agreedupon fees, reimbursement of patent expenses and royalty payments when products reach the marketplace. The
specific terms of the agreement are determined through a complex negotiation process. Prior to the execution of
a license, certain shorter-term agreements are sometimes executed. A secrecy agreement is used in conjunction
with marketing and affords a potential licensee access to confidential information that assists the company in
determining if it has an interest in pursuing a license for a given technology. Well over 900 secrecy agreements
are entered into by the University system each year. A letter agreement generally is used to confirm a company's
intent to negotiate a license and often commits a company to pay certain fees or patent costs while negotiations
are underway. Option agreements are similar in scope to license agreements and protect a licensee's interest in
an invention while more in-depth technical or marketing research is performed.
In FY04, UC entered into 373 licenses and related technology transfer agreements. As indicated in Exhibit 9,
these included 145 utility license agreements, 81 plant license agreements, 32 option agreements, and 115 letter
agreements.
7
Exhibit 9 LICENSING ACTIVITY
Year Ended June 30, 2004
Agreements Executed
Letters
Options
Utility Licenses
Plant Licenses
Total Active Licenses
Utility Licenses
Plant Licenses
115
32
145
81
983
473
At the close of the fiscal year, the systemwide portfolio totaled 1,456 licenses. In managing these agreements,
the University must collect monies when due and monitor progress to ensure that the licensees exercise due
diligence in developing inventions toward commercial application.
Exhibit 10 TOTAL UTILITY LICENSES
Exhibit 11 TOTAL PLANT LICENSES
Exhibits 10 and 11 show the five year trend in the size of the portfolio of UC utility and plant licenses. Each year
some agreements expire or are terminated. In general, the total number of active utility agreements has
continued to rise due to increasing licensing activity throughout the system. In the plant area, a wide variety of
fruits, vegetables and grasses were the subject of 473 agreements. Strawberry licensing continues as a strong
component of the plant program and modifications in UC plant licensing practices overseas are being made in
order to promote the more controlled distribution of a range of UC cultivars.
Exhibit 12 shows the number of utility license agreements associated with each campus. In addition, the Davis
campus has 368 plant licenses in its portfolio and Riverside has 107.
Exhibit 12 TOTAL UTILITY LICENSES BY CAMPUS*
Year Ended June 30, 2004
UCB
UCD
UCI
UCLA
UCR
UCSB
UCSC
UCSD
UCSF
201
76
54
137
11
26
6
204
298
*Licenses associated with inventions that have inventors from more than one campus are reported multiple times in this
exhibit.
8
TECHNOLOGY TRANSFER REVENUES
Total Licensing Revenues
Total licensing revenue, the income the University receives from its agreements with industry, was $93.2 million
in FY04 (Exhibit 13). There are several components of total licensing revenue: Agreement issue fees,
maintenance fees, and other “milestone” payments are received on specific dates or at specific points in the
product development process. These payments encourage companies to diligently pursue product
commercialization. Earned royalties account for the largest portion of revenues and are received once
commercialized products and processes incorporate University inventions. Reimbursements, the final
component of licensing revenues, represent the recovery of patent and legal expenses.
Exhibit 13 TOTAL LICENSING REVENUE*
(Millions)
*In FY00, the University received a $200 million payment as settlement for a long-standing infringement suit involving the
University's Human Growth Hormone patent. Because of the unique nature and magnitude of this settlement, monies
attributable to the settlement are excluded from the year-by-year trend analyses in this and similar figures in the remainder of
this report. If these settlement funds were included, FY00 total licensing revenue would be $278.7 million.
Exhibit 14 shows the amount each campus contributed to FY04 total licensing revenue.
Exhibit 14 TOTAL LICENSING REVENUES BY CAMPUS*
Year Ended June 30, 2004 (Thousands)
UCB
UCD
$10,363 9,784
UCI
UCLA
UCR
6,167 16,242 1,810
UCSB
UCSC
1,289
229
UCSD
UCSF
Other*
14,774 30,986 1,945
* Revenues primarily from a portfolio of 80 OTT-managed DOE Laboratory inventions, most disclosed prior to the
establishment of the Laboratory-based licensing offices.
Royalty and Fee Income
Royalty and fee income in FY04 was $79.3 million. This income derived from 1,088 inventions. As compared
with FY03, royalties and fees increased 18%, with many of the University’s top inventions showing increases
over the previous year.
In FY04, $298,027 was realized from the sale of equity previously acquired under 9 license agreements. As a
result of these transactions and the execution of 16 licenses and license amendments in FY04 that included
equity as a partial consideration, at the end of the fiscal year the University held equity related to technology
transfer activities in 65 companies.
Income from the top five commercialized UC inventions (i.e. inventions that had reached the marketplace and
were generating earned royalties) contributed $37.0 million in FY04, accounting for 46.7% of total royalty and
fee income (Exhibit 15). The top twenty-five royalty-earning technologies collectively accounted for
$62.2million or 78.5% of total royalties and fees. One invention, Urethane Topical Delivery Agent, appeared on
the list of top-earning inventions for the first time in FY04.
9
UC is distinguished among universities in having a large portfolio of diversified inventions that generate
substantial royalty income. It is of note, for example, that the Top-25 list remains strong even though several
inventions, previously among the top five royalty generators, Process for Gene Splicing; Human Growth
Hormone, and Radiographic Media have gone off patent in recent years.
Exhibit 15 UC TOP-EARNING INVENTIONS*
Year Ended June 30, 2004 (Thousands)
INVENTION (CAMPUS, YEAR DISCLOSED)
Hepatitis-B Vaccine
(SF, 1979 and 1981)
Treatment-Intracranial Aneurysms
(LA, 1989)
Energy Transfer Primers
(BK, 1994)
Interstitial Cystitis Therapy
(SD, 1980)
Camarosa Strawberry
(DA, 1992)
Subtotal (Top Five Inventions)
$18,910
7,896
3513
3,469
3,222
$37,010
Dynamic Skin Cooling Device
Biodegradable Implant Coils
Firefly Luciferase
Liposome Sizing Method
Radiographic Media
(IR, 1993)
(LA,1998)
(SD, 1984)
(SF, 1977)
(SD, 1979)
2,966
2,867
2,756
1,653
1,641
Cochlear Implants
Liposome Storage Method
Universal Oligonucleotide Spacer
Fluorescent Dyes-Calcium
Chromosome Painting
(SF, 1979)
(DA, 1984)
(BK, 1996)
(BK, 1984)
(LLL, 1985)
1,460
1,337
1,317
1,185
1,129
Nicotine Patch
Feline AIDS Virus Diagnostic
Fluorescent Dyes-Calcium
Feline Leukemia Virus Diagnostic
Aids for Learning Disabled
(LA, 1984)
(DA, 1986)
(BK, 1984)
(DA, 1980)
(SF, 1994)
1,048
985
916
866
751
Laser/Water Atomic Microscope
Diamante Strawberry
Novel Phosphorus Fertilizers
Magnetic Resonance Imaging
Urethane Topical Delivery Agent
(SB, 1989)
(DA, 1997)
(RV, 1990)
(SF, 1976)
(IR, 1986)
570
564
407
388
383
Total Income (Top 25 Inventions)
Total Income (All Inventions)
% of Total from Top 5 Inventions
% of Total from Top 25 Inventions
$62,199
$79,265
46.7%
78.5%
*This list is limited to revenue-generating inventions that have been commercialized.
Payments to Joint Holders
When an invention results from collaboration between UC and non-UC researchers, multiple entities may
become joint holders of the invention-related patents. In these instances, interinstitutional agreements are
negotiated to establish which entity will manage the patenting and licensing of the invention and the collection
and distribution of invention income; such collaborations are relatively common. In FY04, 277 of 1,196 new
disclosures (23%) included non-UC inventors and 43 new interinstitutional agreements were signed.
In FY04, $5.0 million was redistributed to other entities for 119 inventions covered by interinstitutional
agreements. For financial reporting purposes, these monies are treated as an offset to income. The largest payment
to a joint holder was $4.0 million to the University of Washington for the Hepatitis-B Vaccine. Over the past five
years this invention has accounted for most of the UC payments to joint holders reflected in Exhibit 16.
10
Exhibit 16 PAYMENTS TO JOINT HOLDERS
(Millions)
Revenue Associated with Patent/Legal Expenses
Because inventions are highly technical, the University uses specialized outside attorneys to draft and secure
patent protection both in the U.S. and abroad. Costs to secure, maintain, and protect patent rights associated
with an invention are substantial. Obtaining a licensee’s commitment to reimburse these costs is a high priority
objective of license negotiations, and reimbursements, therefore, are considered to be part of total licensing
revenue. In FY04, the University received $13.9 million in licensing revenue from patent/legal expense
reimbursements (Exhibit 17).
Exhibit 17 REVENUE FROM PATENT/LEGAL REIMBURSEMENT*
(Millions)
*For financial reporting purposes, expense reimbursements are treated as an offset to legal and other direct
expenses (see section on Legal and Other Direct Expenses).
11
TECHNOLOGY TRANSFER EXPENSES
Legal and Other Direct Expenses
Legal and other direct expenses totaled $28.7 million in FY04 (Exhibit 18). Most technology transfer legal
expenses are associated with patent prosecution defined as payments to outside counsel for drafting patent
applications as well as other costs for securing and maintaining patent protection for University inventions. The
extent of reimbursement of legal and other direct expenses is a negotiated term of a license agreement and not
all agreements commit the licensee to reimburse the University for these costs. In FY04, reimbursements of legal
expenses totaled $13.9 million, resulting in net legal expenses of $14.8 million (Exhibit 18).
Exhibit 18 LEGAL EXPENSES
(Millions)


Gross legal expenses
Net legal expenses
Exhibit 19 provides a breakdown of FY04 net legal expenses (i.e., legal expenses after reimbursements) by
category. Patent prosecution accounted for $10.1 million of the $14.8 million in net legal expenditures. A single
dispute was responsible for a major portion of $3.5 million in net legal expenses for legal defense. Although
such disputes are often costly, their resolution may yield substantial revenues for the University. For example,
the favorable settlement of a dispute in FY03 will enable the University to receive millions of dollars of future
royalties which would have been lost without legal action.
Exhibit 19 NET LEGAL EXPENSES
Year Ended June 30, 2004 (Millions)
Interference & Infringement 8%
Legal Defense 24%
Patent Prosecution 68%
It is anticipated that University licensing personnel will continue to be successful in negotiating reimbursement
of a substantial amount of patent costs. Nonetheless, it is expected that there will continue to be significant legal
expenses associated with patenting and litigation as the technology transfer program matures, as patent activities
continue to accelerate, and as relationships with inventors, sponsors and licensees become increasingly
complex.
12
Operating Expense
Operating expense rose to $14.3 million in FY04. This category of expenditures covers administration of the
technology transfer program at OTT and the seven campus-based licensing offices, and primarily consists of
employee salaries, benefits, and expenses for equipment and supplies. In some instances, rent is included as
well. Because the scope of responsibilities and operations at campus-based offices vary substantially, what is
included as technology transfer operating expense is not entirely comparable from office to office. The increase
in operating expense seen over the last several years (Exhibit 20) is due to the expansion of campus-based
technology transfer activities and the support of a more broadly distributed approach to technology transfer
administration.
Exhibit 20 OPERATING EXPENSE
(Millions)
$15
$10
$9.7
$10.8
$12.1
$12.8
$14.3
$5
$0
FY00
FY01
FY02
FY03
FY04
INCOME AVAILABLE FOR DISTRIBUTION
Income available for distribution is the income that remains after payment of all direct and indirect program
expenses. It is computed as income from royalties and fees less the sum of payments to joint holders, net legal
and direct expenses, and program operating expenses. This income is distributed to inventors through inventor
shares and to the University through the research allocation, general fund share and campus share.
In FY04, income available for distribution totaled $45.1 million. The amount of program income available for
distribution over the past five years is shown in Exhibit 21.
Exhibit 21 INCOME AVAILABLE FOR DISTRIBUTION
(Millions)
Inventor Shares
The University Patent Policy grants inventors the right to receive a portion of net income accruing to individual
inventions. In FY04, 1,172 inventors received a total of $25.3 million based on invention financial activity through
June 2003. Under current policy, inventors receive 35% of net invention income. Inventor shares are calculated
based on invention income and expense activity through the close of the prior fiscal year. Thus, inventor shares
distributed in FY04 were calculated based on invention financial activity through June 30, 2003. Trends related to
the number of inventors paid shares and the amount of inventor share payments are reflected in Exhibit 22.
13
Exhibit 22 INVENTOR SHARES*
(Millions)
Inventors
Paid:
910
932
1,129
1,196
1,172
* In order to facilitate trend analysis, this figure excludes an extraordinary one-time $73.8 million inventor share payment
distributed in FY00 as a result of a $200 million legal settlement (see Exhibit 13, p. 8).
Research Allocation Share
The current Patent Policy requires that 15% of net royalty and fee income from each invention be designated for
research-related purposes on the inventor’s campus or Laboratory. These monies are used in accordance with
plans developed at each campus and Laboratory. The research allocation, which is computed based on
inventions disclosed on or after October 1, 1997, totaled $359 thousand in FY04.
General Fund Share
The portion of University technology transfer income allocated to the UC General Fund as part of the stateapproved budget totaled $8.2 million in FY04 (Exhibit 23). The General Fund share (previously called the “state
share”) is equal to 25% of the amount remaining after deducting payments to joint holders, net expenses, and
inventor share payments from royalty and fee income.
Exhibit 23 GENERAL FUND SHARE
(Millions)
Campus Share
Campus share is the amount of technology transfer program income that is available to be redistributed to
campuses to support ongoing research and education programs after the University has paid all direct and
indirect program expenses and distributed additional income as required by policy. Campus share was referred
to as net income in previous reports and is computed as income from royalties and fees less the sum of payments
to joint holders, net legal and direct expenses, income distributions, and program operating expenses. Campus
share totaled $11.3 million in FY04 (Exhibit 24).
14
Exhibit 24 CAMPUS SHARE*
(Millions)
*In order to facilitate trend analysis, this exhibit does not reflect the campus share distribution related to an extraordinary
$200 million legal settlement for Human Growth Hormone. If included, FY00 campus share distribution would be $135.1
million.
Exhibit 25 SYSTEMWIDE TECHNOLOGY TRANSFER ACTIVITY FY00 – FY04*
Fiscal Year Ended June 30 (Thousands)
FISCAL YEAR COMPARISONS
FY00
FY01
FY02
FY03
FY04
% CHANGE
(FY03 – FY04)
Invention Disclosure
Inventions Reported
Total Invention Portfolio
865
4,481
957
4,982
973
5,472
1,027
5,948
1,196
6,618
16%
11%
Patent Prosecution
US Applications Filed
First Filings
Secondary Filings
Total
US Patents Issued
Total Active US Patents
432
324
756
324
1,976
437
415
852
298
2,267
455
429
884
300
2,502
490
384
874
323
2,753
515
450
965
270
3,024
5%
17%
10%
-16%
10%
185
1,634
234
1,780
248
2,051
230
2,364
243
2,837
6%
20%
43
171
99
52
142
68
42
125
55
21
131
56
32
145
81
52%
11%
45%
92
686
475
116
788
454
99
867
472
62
902
454
53
983
473
-15%
9%
4%
First Foreign Filings
Total Active Foreign Patents
Licensing
Agreements Issued
Options
Utility Licenses
Plant Licenses
Total Active Agreements
Options
Utility Licenses
Plant Licenses
Exhibit 25 only reports activity governed by the UC Patent Policy. It does not include copyright and material
transfer agreement activity that also is carried out by campus-based technology transfer offices
*Activity related to the invention portfolio managed by OTT and seven campus-based licensing offices on behalf of nine UC
campuses that together with newly established UC Merced comprise the UC system. Activity related to a small number of
DOE Laboratory inventions managed at OTT also is reflected in these figures. See pp. 18-20 for activity pertaining to the
operation of the DOE Laboratory-based technology transfer offices.
15
Exhibit 26 SYSTEMWIDE FINANCIAL ACTIVITY FY00-FY04
1
Fiscal Year Ended June 30 (Thousands)
FISCAL YEAR COMPARISONS
FY00
2
FY01
FY02
FY03
FY04
(FY03 - FY04)
% CHANGE
Income from Royalties and Fees
$267,765
$72,899
$88,148
$67,019
$79,265
18%
Less: Payments to Joint Holders
Adjusted Gross Income (A)
Legal and Other Direct Expenses
(6,243)
261,522
20,018
(6,174)
66,725
22,274
(6,072)
82,076
25,205
(5,854)
61,165
27,929
(4,990)
74,275
28,761
-15%
21%
3%
Less: Reimbursements
Net Legal Expenses (B)
Operating Expenses3 (C)
(10,911)
9,107
9,677
(9,979)
12,295
10,832
(11,845)
13,360
12,135
(14,300)
13,629
12,749
(13,916)
14,845
14,260
-3%
9%
12%
Income Available for Distribution (A-B-C)
Shares
Allocation
Fund Share
Share
242,738
101,661
107
5,898
135,072
43,598
33,062
238
5,143
5,155
56,581
26,028
406
10,558
19,589
34,787
32,357
534
3,608
(1,713)
45,170
25,310
359
8,214
11,287
30%
-22%
-33%
128%
759%
Inventor
Research
General
Campus
Exhibit 26 only reports financial activity governed by the UC Patent Policy. Campus-based technology transfer
offices also generate income through copyright licenses, material transfer agreements and through research
support committed in conjunction with technology transfer activities. This income is not included in this report
1 Financial activity related to the invention portfolio managed by OTT and seven campus-based licensing offices on behalf of
the nine UC campuses that together with newly established UC Merced comprise the UC system. Financial activity related to
a small number of DOE Laboratory inventions managed by OTT also is reflected in these figures. See pp. 18-20 for financial
data pertaining to the operation of the DOE Laboratory-based technology transfer offices.
2 In FY00, UC received a one-time $200 million legal settlement related to its Human Growth Hormone invention. Inventor
shares distributed as a result of the settlement totaled $73.8 million. If monies attributable to this extraordinary settlement had
been removed from the table above to more realistically convey year-to-year trends, the following amounts (in thousands)
would have been reflected in the FY00 column: Income From Royalties & Fees - $67,765; Inventor Shares - $27,922; and
Campus Share - $8,811.
3 Includes operating costs for OTT and seven campus-based licensing offices as well as a UCOP budgetary assessment equal
to 1% of Adjusted Gross Income for cases under OTT financial administration.
16
Exhibit 27 FY04 CAMPUS TECHNOLOGY TRANSFER ACTIVITY
Year Ended June 30, 2004
UCB
UCD
UCI
UCLA
UCR
UCSB
UCSC
UCSD
UCSF
Invention Disclosure
Inventions Reported
Total Invention Portfolio
124
753
145
775
133
486
186
948
76
268
81
398
20
75
300
1,718
133
1,246
Patent Prosecution
US Applications Filed
First Filings
Secondary Filings
Total
US Patents Issued
Total Active US Patents
64
56
120
34
480
79
74
153
33
368
58
64
122
23
174
98
70
168
30
418
14
17
31
13
75
24
23
47
31
223
6
2
8
6
30
113
80
193
50
500
62
70
132
49
755
22
345
53
408
24
250
39
428
3
57
17
109
2
2
55
562
31
702
Licensing Agreements Issued
Options
Utility Licenses
Plant Licenses
3
27
0
4
6
62
6
10
0
10
26
0
2
0
20
0
3
0
1
2
0
3
41
0
3
40
0
Total Active Agreements
Options
Utility Licenses
Plant Licenses
13
201
0
6
76
368
7
54
0
10
137
0
3
11
107
1
26
0
3
6
0
4
204
0
8
298
0
First Foreign Filings
Total Active Foreign Patents
Exhibit 27 only reports activity governed by the UC Patent Policy. It does not include copyright and material
transfer agreement activity which also is carried out by campus-based technology transfer offices.
Note: A number of inventions involve inventors from multiple UC campuses. Activity statistics for these inventions are
reported multiple times, once for each campus involved. Thus, for any given measure of activity, the sum of individual
campus numbers may be greater than the systemwide totals reported elsewhere in this report.
Exhibit 28 FY04 CAMPUS FINANCIAL ACTIVITY
Year Ended June 30, 2004 (Thousands)
UCB
UCD
Income from Royalties and Fees
Less: Payments to Joint Holders
Adjusted Gross Income (A)
$ 8,756
(73)
8,683
$ 9,241
0
9,241
Legal and Other Direct Expenses
Less: Reimbursements
Net Legal Expenses (B)
3,044
(1,607)
1,437
3,143
(543)
2,601
2,409
(1,290)
1,119
4,402
(2,278)
2,124
515
1,102
420
1,115
6,731
5,538
3,337
2,035
62
1,303
3,332
3,444
13
799
1,281
1,409
16
587
1,326
Operating Expenses (C)
1
Income Available for Distribution (A-B-C)
Inventor Shares
Research Allocation
2
General Fund Share
Campus Share
UCI
UCLA
$ 4,877 $13,964
(1)
(33)
4,876 13,931
UCR UCSB
$ 1,190 $ 857
0
0
1,190
857
986 1,156
(620) (432)
366
725
UCSC
UCSD
$ 79 $11,473
(3)
(277)
76 11,196
UCSF
$27,029
(4,604)
22,425
249
(150)
99
7,434
(2,896)
4,538
5,736
(3,957)
1,779
640
193
877
1,661
10,692
254 (508)
(216)
5,781
18,986
4,592
109
1,804
4,187
378
693
6
24
111 (140)
(242) (1,085)
18
5
(10)
(229)
2,629
83
1,007
2,062
9,644
40
2,751
6,551
570
Exhibit 28 only reports financial activity governed by the UC Patent Policy. Campus-based technology transfer
offices also generate income through copyright licenses and material transfer are not covered by the UC Patent
Policy. This income is not included in this report.
___________________________
1Reflects recharges to individual campuses of OTT operating expenses and a UCOP assessment equal to 1% of adjusted gross
income for cases under OTT financial management. Does not include operating expenses associated with technology transfer
program administration at the individual campuses. Campus-based licensing offices reported FY04 operating expenses as follows:
UCB - $1,213,471; UCI - $667,055; UCLA - $1,238,352; UCSB - $20,000; UCSC - $285,608; UCSD - $1,584,311; UCSF $783,137.
2 When Net Legal Expenses and Inventor Shares exceed Adjusted Gross Income, the General Fund share is represented as a credit
(negative amount).
17
Part 2: The DOE Laboratory-managed Portfolios
Background
Since 1988, technology transfer for the DOE Laboratories has been under the purview of Laboratory-based
offices at Los Alamos National Laboratory (LANL), Lawrence Berkeley National Laboratory (LBNL), and
Lawrence Livermore National Laboratory (LLNL). The licensing function is managed within the context of larger
departments responsible for fostering a variety of partnerships with industry: LANL's Industrial Business
Development Program Office, LBNL's Technology Transfer Office, and LLNL's Industrial Partnerships and
Commercialization Office. In addition to patent licensing, these offices direct substantial resources toward the
licensing of software and the negotiation of Cooperative Research and Development Agreements (CRADAs),
technical assistance, and other agreements with industry. Although these DOE Laboratory offices manage most
Laboratory inventions, OTT oversees a small portfolio of 80 Laboratory inventions, most disclosed prior to 1988.
Occasionally, more recent cases, such as those having co-inventors from the UC campuses, are added to the
OTT-managed group.
Certain aspects of technology transfer processes differ at the DOE offices as compared with OTT and the
campuses. For example, after an invention is disclosed and a determination is made to pursue a license, there
are some cases where the laboratory may be able to elect title to an invention on behalf of the University under
the federal Bayh-Dole legislation, just as a campus does. In other cases, however, there must be a special request
to DOE to enable The Regents to retain or be assigned title to the invention. Requests to assert copyright in
software also must be made to DOE. In addition, whereas OTT and campus offices contract with attorneys at
outside law firms for all of their patent prosecution activity, the Laboratories manage most US patent filings
internally through their own legal departments and contract out only for selected matters, particularly foreign
prosecution. In addition, the fiscal year at the Laboratory offices ends September 30 in contrast to the June 30
end date for the fiscal year at OTT and the campus offices.
Information in this section pertains to the activities of the technology transfer offices of the Laboratories unless
noted otherwise.
In FY04, DOE Laboratory researchers disclosed 340 inventions and filed a total of 224 patent applications. Onehundred-eighty-nine (189) US patents issued on DOE inventions.
The Laboratories completed 24 new options and licenses for patentable inventions and tangible research
products (TRPs) in FY04, bringing the total number of active license and option agreements to 266 at the close of
the fiscal year (Exhibit 29) Licensing of other types of intellectual property (e.g., copyrighted software) represent a
significant additional element of current licensing activity.
18
Exhibit 29 PATENTING AND LICENSING ACTIVITY: DOE LABORATORY OFFICES
Year Ended September 30, 2004
LANL
Disclosure and Prosecution
LBNL
LLNL Total
1
Inventions Reported
US Applications Filed
First Filings
Secondary Filings
Total
US Patents Issued
First Foreign Filings
Marketing and Licensing
New Agreements Issued
Secrecy
Option
License
Total Active Agreements
Option
License
118
65
157
340
44
23
67
62
21
36
19
55
29
14
7
32
39
98
14
150
74
224
189
49
378
1
12
125
1
5
571
1
7
1,074
3
24
2
128
4
45
5
82
11
255
Fiscal Year Comparisons
(Thousands)
Disclosure and Prosecution
Inventions Reported
US Applications Filed
First Filings
Secondary Filings
Total
2
US Patents Issued
First Foreign Filings
Marketing and Licensing
New Agreements Issued
Secrecy
Option
License
Total Active Agreements
Option
License
FY03
FY04
%Change
375
340
-9%
206
71
277
150
74
224
-27%
4%
-19%
168
56
189
49
13%
-13%
1,076
8
36
1,074
3
24
0%
-63%
-33%
15
230
11
255
-27%
11%
1 In addition to the patent activity reported in this table, 80 DOE laboratory inventions managed by OTT were associated
with 67 US patents, 1 option agreement and 16 licenses at the close of FY04
2 Data reflect patent prosecution initiated on behalf of either DOE or the University.
Financial Results
The DOE Laboratory-managed portfolios generated a total of $6.4 million in income during FY04, an increase of
2% over the prior year. Patent income for the Labs increased 19% as compared with FY03, while copyright
income increased by 8% (Exhibit 30).
Information on DOE Laboratory patenting and licensing expenses is not provided in this report. Patent expenses
are allowable costs under the University’s current contract with DOE and are not readily separable from other
expenses of the legal departments. Similarly, operating expenses related to the licensing function are not readily
separable from other expenses of the technology transfer departments. Finally, income generated by the DOE
Laboratories is not subject to the General Fund share assessment.
19
Inventor share payments of $2.1 million included $295 thousand paid to authors of software. These payments
were based on financial activity through September 30, 2004 for LBNL, and September 30, 2003 for LANL and
LLNL.
Exhibit 30 FINANCIAL ACTIVITY: DOE LABORATORY OFFICES*
Year ended September 30, 2004 (Thousands)
LANL
Income from Royalties and Fees
Patents and TRPs
Copyrights/Software
Total
Inventor/Author Shares Paid
Fiscal Year Comparisons
Patents and TRPs
Copyrights/Software
Total
Inventor/Author Shares Paid
LBNL
LLNL
TOTAL
984
181
$1,165
1,935
161
$2,096
2,769
392
$3,161
5,707
734
$6,441
$451
$536
$1,116
$2,103
FY03
$5,638
677
$6,315
FY04
$5,707
734
$6,441
$2,879
$2,103
%Change
1%
8%
2%
-27%
*In addition to income reported in this table, the OTT-managed DOE portfolio collectively generated $1,131,819 in FY04
royalty and fee income, including ($25,580) for LANL, $183,649 for LBNL, and $974,750 for LLNL inventions.
Technology Transfer Organization at UC
The UC Technology Transfer program operates under a model of distributed responsibilities and authorities that
balances activities carried out at the central Office of Technology Transfer (OTT) with those at the individual UC
campuses and UC-managed DOE Laboratories. Under this approach, campuses and Laboratories develop and
shape technology licensing programs to fit their unique needs as put forth in memorandums of understanding
negotiated with the UC Office of the President (UCOP). In all instances, OTT retains responsibility for certain
functions, such as policy development and guidance, legal oversight, legislative review, information
management, and a variety of other services in support of the overall program. OTT also provides
comprehensive management of approximately half of the 6,600 inventions in the systemwide invention
portfolio. Internet links to UC OTT, campus, and Laboratory-based licensing offices are provided below.
UC Technology Transfer on the Web
(Prefix with http://)
UC Office of the President: Office of Technology Transfer (OTT)
UC Berkeley: Office of Technology Licensing (OTL)
UC Davis: Technology and Industry Alliances (TIA)
UC Irvine: Office of Technology Alliances (OTA)
UC Los Angeles: Office of Intellectual Property Administration (OIPA)
UC Riverside: Office of Intellectual Property Services (OIPS)
UC Santa Barbara: Sponsored Projects Office
UC Santa Cruz: Office of Sponsored Projects
UC San Diego: Technology Transfer and Intellectual Property Services (TechTIPS)
UC San Francisco: Office of Technology Management (OTM)
Los Alamos National Laboratory: Industrial Business Development Program Office
Lawrence Berkeley National Laboratory: Technology Transfer Office
Lawrence Livermore National Laboratory: Industrial Partnerships and Commercialization Office
Industry-University Cooperative Research Program
Acronyms are provided for OTT and campus-based licensing offices.
20
www.ucop.edu/ott
otl.berkeley.edu
www.research.ucdavis.edu/tia
www.ota.uci.edu
www.research.ucla.edu/oipa
www.ora.ucr.edu/ip
research.ucsb.edu
www.ucsc.edu/osp
invent.ucsd.edu
www.otm.ucsf.edu
www.lanl.gov/partnerships
www.lbl.gov/Tech-Transfer
www.llnl.gov/IPandC
uc-industry.berkeley.edu