Technology Transfer Expenses
Operating expenses for OTT and campus licensing offices, consisting largely of employee salaries, benefits, and expenses for equipment and supplies, rose to $6.9 million in FY97 (Exhibit 13-14). As indicated in Exhibit 15, operating expenses as a percentage of licensing revenues stabilized from FY93 to FY95, dropped slightly in FY96 and stabilized again in FY97.
*Includes a $596,095 "common fund" UCOP budgetary assessment equal to 1% of OTT adjusted gross income.
Legal expenses incurred by OTT and campus offices totaled $17.4 million in FY97. Reimbursements from licensees totaled $7.4 million, reducing net expenses in this category to $10.0 million (Exhibit 16). Approximately 47% of net legal expenses involved payments to outside counsel for patent prosecution and maintenance. Thirty-five percent (35%) of net legal expenses derived Technology Transfer Expenses from three patent infringement cases, one involving Human Insulin, another involving Chromosome Painting, and the other involving Human Growth Hormone. The remaining 18% of net expenses were incurred in connection with a number of smaller legal actions and disputes.
Exhibit 17 shows the growth in gross and net legal and direct expenses over the past five years. Although University licensing personnel continue to experience a high degree of success in negotiating reimbursement of patent costs, it is expected that there will continue to be significant legal expenses associated with litigation as the technology transfer program grows, patent activities continue to accelerate, and relationships with inventors, sponsors and licensees become increasingly complex.
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