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Inventors, universities profit from innovations


In many cases, schools, researchers split the royalties earned

By DAN WHEAT
Capital Press

If the new WA 2 apple variety, developed by Washington State University research scientist Bruce Barritt, ever becomes a bit hit like Gala, Barritt or his heirs could see a big payday.

Hypothetically, at least.

Tom Kelly, technology manager of the WSU Research Foundation, said most people probably are not aware that public university faculty members have made money for years off royalties on their inventions.

The majority of inventions make little or no money, but every university has had a few money makers. Probably none are as lucrative as the invention of Gatorade by the University of Florida in the 1960s to prevent dehydration of its football team, the Gators. Gatorade was credited as a factor in the team's first Orange Bowl win in 1967 and has provided the university with more than $150 million in royalties from a 20 percent royalty share.

Schools reap millions

The University of California system had 8,953 active inventions and 3,546 U.S. patents in 2008. That year it received $128.4 million in licensing revenue and paid 1,818 inventors $35.2 million.

Oregon State University in Corvallis, Oregon's land-grant college, generated $19.2 million from licensing of technologies from 1999 through 2009, said Brian Wall, OSU's director of technology transfer.

Roughly one-third of the income goes to the university, one-third to the responsible program and one-third to the inventors, Wall said. However, he notes inventors often waive their portions, returning them to the program.

Since its inception in 2003, the Clearfield wheat program has been the leading licensing revenue producer at OSU, bringing in about $3.2 million, Wall said.

BASF Corp., the world's largest chemical company based in Florham Park, N.J., licensed OSU and other universities to develop varieties of wheat resistant to certain herbicides and pesticides.

The University of Idaho in Moscow, Idaho's land-grant college, received $331,062 in technology licensing income in 2009 with 40 percent going to creators, 20 percent to their programs and 40 percent to the Office of Technology Transfer to pay for patents, licenses and other costs, said Gene Merrell, the university's associate vice president of research.

Annual income has been at that level for the past five years, he said.

Development of varieties of oil seeds, like mustard and canola, are probably tops in income, he said, followed by streptomyces bacteria, a microbe enhancing the ability of plants to get nutrients through their roots.

Paydays take years

It takes a long time to develop a product, and even longer for researchers to realize any royalty payments.

So far, with the WA 2 apple, only about 130 growers have each planted five trees for evaluation. Commercial production has not started. But if sales ever reached 525,000 trees a year -- about Gala's peak -- Barritt's personal royalty of 30 percent of $1 per tree would be $157,500 a year.

Barritt, retired in his native Kelowna, B.C., would not comment on the chances of that happening, saying it's a politically sensitive question.

Neal Manly, sales manager of Willow Drive Nursery, Ephrata, Wash., which grows and sells WA 2, said chances of WA 2 hitting the big time are remote.

WA 2 trees will initially only be sold to growers in Washington and there are many more new club varieties being tested and promoted now than when Gala gained popularity, Manly said. Gala was developed in New Zealand and patented in 1974. It is one of the top-selling apple varieties.

"WA 2 is a fantastic eating apple, but I just don't see the potential for it taking off," he said. "It would take huge consumer demand."

While returns from WSU tree fruit breeding are in their infancy, the university and some of its professors have made money from other inventions.

The WSU Research Foundation is a nonprofit corporation that patents and licenses inventions and other intellectual property of WSU faculty. The foundation collects licensing royalties and distributes them to itself, the university for further research and the inventor as incentive.

The top earner is a 2002 WSU-USDA discovery that Roundup sprayed on Roundup Ready wheat prevented stripe rust disease. Since Roundup Ready wheat is not yet available in the U.S., royalties so far have come from Monsanto applying the license from the patent of the discovery to soybeans to ward off a soy rust.

Since 2003, WSU Research Foundation has received $2.9 million in licensing royalties from the discovery with $780,000 of that going to the USDA and $445,100 of the $2.9 million being split evenly between then WSU wheat breeder Kim Kidwell and her then research assistant George Baley, said Kelly, Foundation technology manager.

Kidwell is now associate dean of academic programs at WSU. She said Baley heads a corn disease unit for Monsanto.

Kelly said he does not know if the third member of the discovery team, USDA Agricultural Research Service scientist Timothy Paulitz received any of the $780,000 that went to USDA.

"The Monsanto thing is our Gatorade so far," he said.

Kidwell said she didn't expect the discovery.

"It was the most serendipitous episode of my career," she said.

She, Baley and Paulitz were developing Roundup Ready wheat varieties for Northwest production and were concerned about pathogens on weeds infecting wheat after weeds died from Roundup. They were testing for that and were in a second year of field trials which turned out to be a bad year for stripe rust. They found stripe rust was noticeably reduced when Roundup was applied to Roundup Ready wheat.

About the same time, Asian soy rust showed up in Brazil and there was concern of it spreading on hurricane winds to the U.S. Kidwell's team tested and found the rust didn't do well in Roundup Ready soybeans.

Kidwell said professors keep an ethical distance from companies, a scientific integrity, when working on inventions or discoveries.

She said she had no idea she would get royalties from the discovery and that personal gain was in no way her motivation. "We were trying to determine if we were putting growers at risk (if Roundup Ready wheat would be more susceptible to diseases)," she said.

"I can't think of any one person at WSU that designs research to license it for personal gain. That's not the way I've seen this place roll," she said. "If you want to make money, you go into industry."

But Kelly said there's a degree of status from having an invention or discovery patented and that some professors look at a university's patent and royalties policy to determine if they want to work there.

Kidwell has invented 14 new wheat varieties. Kelly said Kidwell has made nothing on them so far because wheat varieties have not been licensed. The Washington Grain Commission has the first right to negotiate those licenses, he said.



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