42 Years Experience of

Technology Licensing

Katharine Ku

Stanford University

November 15, 2012

Philosophy

• Do what’s “best for the technology”• Foster good industrial relations• Be a business-driven office, not

legally driven• Plant as many seeds as possible

History

• Started in 1970• Approx. 8,300 cumulative disclosures• Approx. 3,000 active cases• Executed over 3600 licenses• Approx. 1200 active licenses

Notable Stanford Inventions1970 – OTL Established

1971 - FM Sound Synthesis ($22.9M)

1974 – Recombinant DNA ($255M)

1981 – Phycobiliproteins ($46.4M), Fiber Optic Amplifier ($48.4M), MINOS ($4.1M)

1984 – Functional Antibodies ($318.9M)

1990-1992 – DSL ($29.6M)

1996 – Improved Hypertext Searching (GoogleTM)($337M)

2013 – the next big thing ???

1987 – Selective Amplification of Polynucleotides ($20.3M)

1994 – In vivo bioluminescent imaging ($7.2M)

1993 – Microarrays ($2M), MIMO for Wireless Broadcast ($0.12M)

2004 – Refocus Photography ($0.15M)

The upside...

• OTL has generated ~$1.47B in cumulative gross royalties

• $920M were three big inventions• Over $1.2 billion stayed at

Stanford/inventors• OTL has given $46.2M to the

Research Incentive Fund

Sobering Statistics

• 3/9300 is a BIG WINNER (these three inventions generated 67% of the cumulative income)

• 20 cases generated $5M or more• 68 cases generated $1M or more in

cumulative royalties• $17.6M in unlicensed inventory• The University cannot count on royalties

for university operating expenses

1970’s

• First year $55,000• 50-70 disclosures a year• Inventions of note:

• Music chip• FACS• Hybridomas

• Staff of 3

1980’s• Dramatic increase in revenue

– DNA cloning invention– Software– HIV, the “web”

• Broke even after 15 years• Biotech emerging • equity discussions: conflicts of

interest• 622 licenses/staff of 18/$14M

1990’s

• Change in patent policy• New view of equity• Google, DSL technologies disclosed• Wireless inventions appearing• DNA patent expired• Income ~$25M-$61M-$40M• Staff of 24, $3M patent expenses

2000’s

• Google IPO• Lots of start-ups at the beginning;

the crash• Functional antibody royalties start• Interest in online education begins• Income growing ~$65M, 33 staff• $4M in patent expenses

Present

• Innovation is key– StartX, Biodesign, SPARK,

Entrepreneurial classes

• Acceleration to industry • Rise of China• Income: $76.7M, staff of 40, $8M

patent expenses

Future

• More pressure to patent/more expenses

• Pressure to do deals faster/streamline

• More interest by entrepreneurs to start companies

• Income cliff

Stanford “Best Practices”

• Stay centered– Education and research come first

• Do what’s best for the technology– Don’t chase the $$$

• The dollars will come if you do a good job

• Plant as many seeds as possible– Some will bear fruit