Campus Highlights: UC San Diego

Campus Notes:

Management of UCSD’s invention portfolio is split between OTT and UCSD’s Technology Transfer Office (TTO). TTO assumed responsibility for managing most new campus inventions and selected older inventions effective October 1994. OTT continues to receive some new UCSD disclosures when multiple UC campuses are involved or the technology is closely related to one already administered by OTT.

For OTT-managed cases, the overall level of basic patent and licensing activity remained relatively stable from FY96 to FY97. However, adjusted gross income increased considerably. About 40% ($1.1 million) of income received in FY97 was attributable to Radiographic Media. The FY97 total for this invention included a $409,000 settlement for past-due royalties. A newly commercialized invention, Interstitial Cystitis Therapy, generated $411,000 in royalties for FY97, up from $25,000 in FY96. In addition, seven agreements generated issue fees of $50,000 or more, and another four agreements generated minimum royalties of $50,000 or more. Due to production problems that have only recently been resolved, UCSD’s share of income on Marine Anti-inflammatory (invented jointly with the Santa Barbara campus) decreased by $75,000 to only $32,000 in FY97. The future of this invention is now uncertain.

Over 90% of FY97 patent prosecution expenses for the OTT-managed portfolio were reim-bursed by licensees, resulting in a drop in net legal expenses. The State share increased due to an increase in income and a decrease in net patent expenses. UCSD’s share of operating expenses increased because a greater portion of professional time was allocated to support the campus on licensing and related research issues.

For the TTO-managed portfolio, both patent and licensing activity increased dramatically in FY97. The total number of patent filings more than doubled, and the number of new letter, option, and licensing agreements rose substantially. Of the 18 new licenses reported for FY97, three actually were executed in FY96.

Because the TTO-managed portfolio consists largely of younger inventions still in the developmental stage, most of the $192,000 of adjusted gross income came from license issue fees rather than royalties.

The rise in net legal expenses for TTO-managed cases resulted from an increase in “at risk” patent filings and a lag in the receipt of reimbursements from licensees. A portion of these filing costs are due to be recovered from licensees in FY98. Since legal expenses plus inventor share payments exceeded income for FY97, the State share actually provided a “credit” for TTO. An increase in TTO staffing and costs associated with the growth of a relatively new office resulted in a $180,000 (35%) increase in TTO operating expenses for FY97.

As a result of all of these factors, UCSD net income from OTT activity increased by over 50% to $704,000. The campus also was allocated a portion of interest earnings totaling $13,000, bringing the net campus distribution to more than $717,000. During the same period there was a $347,000 increase in net loss for the TTO-managed cases.