The Campus Kings of Patents - University of California system dominates innovation

 Patents offer a sustainable (~17 years) competitive advantage when commercialized meaningfully.  Yes, most patents are worth nothing.  Many patents COULD be worth a lot but are underutilized or un-asserted.  Regardless, there is no question that patents are a crucial strategic asset to commerce and have become even more important with the dawn of industries such as computers, pharmaceuticals, telecomm, biotech, etc. – and looking ahead, who doesn’t envision a future dominated by new technologies in biologic/genetic engineering and nanotech (among other things) – patents will be an essential part of the next technological revolution(s) – probably in unprecedented ways.  As an example, Nortel’s portfolio of patents (a company in bankruptcy proceedings) recently transacted for over $4 billion.  It isn’t a matter of if, but simply a matter of when. 

One arena of vast scientific exploration, creativity, and productivity is the educational institution.  This resource historically has been relatively dormant with respect to intellectual property.  They seem to be awakening and are fertile ground for innovation, partnering, and perhaps unique strategic opportunities for corporate markets.  Smart companies understand this and are already planning for the future, establishing open innovation processes or partnering deeply with key innovators in the academic community.

In the 1960’s, only 15 educational institutions found their way into the top 5,000 entities patenting in the United States.  By the 2000’s, this number had grown to 137 (across all time, 138 institutions now reside in the top 5,000 for total patents granted).  The contribution from these institutions amounted to just over a tenth of a percent of the total granted patents in the 60’s – again, by the 2010-11, this number was over 2 percent. 

Conservatively, patents granted to these top 138 institutions will exceed 50,000 in the current decade.  The University of California tops this list and projects to produce well over 4,000 patents over this period of time.  International institutions on this list project to well over 10,000 U.S. patents.

In the 1960’s there was one international institution in the top 5,000 – 1970’s there was 2.  During the 2000’s, there were over 30 (their share growing over this period from less than .1% to almost .4% in 2010-2011 (of total patents)).  When evaluated as a percentage of institutional patents in the high-flyer cohort (top 138), non-U.S. institutions were about 14% in the 2000’s and now account for almost 20%.

Overall patenting activity for academic institutions (a couple of quasi-educational institutions are included in this analysis) shows University of California system as by far the most productive.

In looking at the very most recent trending (grants from 2010 and 2011 only), the picture changes a little bit:

There are several interesting trends that are evident at a glance (or with a little back-of-envelope math).  One, the rate of patenting activity is accelerating dramatically in the institutional space (UCal’s 2010-11 patents account for almost 9 percent of their entire portfolio (going back around 50 years)).  And this is still true when pressed up against the across-the-board acceleration in patenting activity (as stated above, the share of all patenting activity from the high-flying 138 institutions went from .1% to over 2% of total).

The other trend is the significant increase in international institutional patenting in the U.S.  While the French Institute of Petroleum has fallen off the top 20 (they are quasi-educational anyway), Tsinghua University, National Taiwan University, and the Korean Advanced Institute of Science and Technology (KAIST) are emerging players this decade and are obviously integrating patenting (in the U.S. specifically) into their mission.   There are numerous public policy ramifications for all of this, as well as obvious signals to corporate enterprises that see their future tied to innovation and intellectual property stewardship and growth.

Trends towards open innovation should also hasten the increased importance in institutional-corporate partnerships in R&D, co-creation, and foundational research for the next generation of products and services.  We at FPO will continue to watch this and bring light to these trends, as well as provide a platform for information exchange and open dialogue.  Watch for our next article in the Institutional analysis series…