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A n n u A l r e p o r t 2 0 0 8u C » t e C h n o l o g y » t r A n s f e r

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Table of Contents

Technology Transfer Advisory Committee 2Message from the Director 3

Technology Transfer Activity and Financial InformationIntroduction 4Part 1: The Campus Portfolios 4Technology Transfer Activity 4 Invention Reporting 4 Patent Activity 6 Licensing and Related Activity 8Technology Transfer Income 10 Total Income from Licensing 10 Royalty and Fee Income 10 Payments to Joint Holders 11 Income Associated with Patent/Legal Expenses 11Technology Transfer Direct Expenses 12 Legal and Other Direct Expenses 12Income Distributions 13 Inventor Shares 13 General Fund Share 13 Research Allocation Share 13 Income After Mandatory Distributions 13

Part 2: The DOE Laboratory-Managed Portfolios 18 Invention Disclosure, Patenting, and Licensing Activity 18 Financial Results 19

Technology Transfer Organization at UC 20UC Technology Transfer on the Web 20

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General oversight of the UC Technology Transfer Program is under the purview of the Technology Transfer Advisory Committee (TTAC). This standing committee is chaired by the Executive Vice President, Academic and Health Affairs, and meets periodically to advise the UC President on technology transfer policy and guide the direction of the overall program.

Kathryn A. Atchison Vice Provost of Intellectual Property & Industrial Relations, UCLA

Steven V.W. Beckwith Vice President for Research and Graduate Studies, UCOP

Alan B. Bennett Associate Vice Chancellor for Research, UCD

Carol Berman Contracts & Grants Director, DANR, UCOP

Lynn M. Boland Deputy to the Executive Vice President, Business Operations, UCOP

Beth Burnside Vice Chancellor for Research, UCB

Arthur B. Ellis Vice Chancellor for Research, UCSD

Sherylle Mills Englander Director, Office of Technology & Industrial Alliances, UCSB

Cheryl A. Fragiadakis Department Head, Technology Transfer, LBNL

Warren M. Gold Professor, Medicine, UCSF

Theodore Groves Professor, Economics, UCSD

W. Rory Hume Provost & Executive Vice President, Academic & Health Affairs, UCOP

Katherine N. Lapp Executive Vice President, Business Operations, UCOP

Charles F. Louis Vice Chancellor for Research, UCR

Bruce H. Margon Vice Chancellor of Research, UCSC

Richard Miller Associate Vice Chancellor for Research, UCM

Norman J. Oppenheimer Professor, Pharmaceutical Chemistry, UCSF

David G. Schetter Assistant Vice Chancellor, Research & Technology Alliances, UCI

Hans Schöllhammer Professor, Global Economics & Management, UCLA

P. Martin Simpson University Counsel, UCOP

Julie M. Stein Acting Executive Director, Industry-University Cooperative Research Program, UCOP

William T. Tucker Executive Director, Research Administration & Technology Transfer, UCOP

A. Eugene Washington Executive Vice Chancellor & Provost, UCSF

2008 Technology Transfer Advisory Committee

Fiscal Year 2008Office of the President

Executive Vice President, Academic and Health AffairsOffice of Technology Transfer1111 Franklin Street, 5th Floor

Oakland, CA 94607-5200

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Message from the Director

The past fiscal year saw the start of a major transformation in the relationship of the Office of Technology Transfer (OTT) to other units within the UC Office of the President (UCOP). The integration of OTT into the newly created Office of Research and Graduate Studies (ORGS) under Vice President Steven Beckwith brought OTT together with other groups at UCOP that support the University’s research enterprise. ORGS is in the process of evaluating all these functions to understand and make recommendations on how to create a highly functioning organization that provides the best possible structure to support campus research programs. The overarching goal of this effort in the area of technology transfer is to create effective university-industry interfaces with appropriate accountability measures and to better inform the public

about the impact of UC’s research programs on society and on the local, state and national economy. We believe we can achieve this goal by more closely integrating the technology transfer function (with its core licensing and patenting functions at campus-based offices, supported by OTT), with industry-sponsored research, graduate education, and collaborative research programs and institutes.

Making connections to industry and the venture capital/angel investor community is essential to effective technology transfer. Throughout the past year OTT and the campus offices have continued their successful efforts to network with industry and the venture capital/angel investor community. OTT hosted a systemwide technology transfer forum featuring clean technology in San Francisco highlighting the Canada-California Strategic Innovation Partnership (CCSIP) with participation by the Canadian government and Canadian institutions. The technology transfer program also had a system-wide presence at the 2008 BIO International Convention in San Diego.

The systemwide technology transfer program continued to perform well in FY08, with our portfolios of inventions, issued U.S. patents, license agreements, and licensing income increasing. By the end of FY08, UC’s portfolio of active inventions increased by 8.2% to 8,953 with the portfolio of US patents owned by UC increasing by 3.5% to 3,546. The total number of utility license agreements increased 3.3% to 1,359 and the total number of plant license agreements increased 9.9% to 554. Total licensing income (which excludes income from settling disputes) increased 9.8% to $128.4 million in FY08, continuing a steady trend of increases since FY03.

This past year saw legislation in Congress directed at patent reform. UC was an active participant in discussions with the House and Senate members and staff. The potential for changes in the US patent system, together with the difficult global economic environment will undoubtedly impact UC’s technology transfer program, so we must remain alert to these impacts and adjust, where necessary, to continue to fulfill our mission to create pubic benefit from the University’s research endeavors.

Sincerely,

William Tucker Executive Director,Research Administration and Technology Transfer

TechnologY TransFer acTiviTY and Financial inFormaTionPart 1: The Systemwide/Campus Portfolios

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introductionActivity and financial information in this Annual

Report is divided into two parts. The UC Campus Portfolio section (pp. 4-17) presents results related to the patenting and licensing of inventions for the ten-campus system for the fiscal year ending June 30, 2008. This portfolio of inventions was managed by the Office of Technology Transfer (OTT) within the Office of the President (UCOP) and by nine campus-based licensing offices. These include the Office of Technology Licensing at UC Berkeley, InnovationAccess at UC Davis, the Office of Technology Alliances at UC Irvine, the Office of Intellectual Property and Industry Sponsored Research at UC Los Angeles, the Office of Technology Commercialization at UC Riverside, Technology Transfer Office at UC San Diego, the Office of Technology Management at UC San Francisco, the Office of Technology and Industry Alliances at UC Santa Barbara, and the Office for Management of Intellectual Properties at UC Santa Cruz.

The DOE Laboratory-managed Portfolio section (pp. 18-19) provides activity and financial information related to technology transfer at the Lawrence Berkeley National Laboratory (LBNL), a US Department of Energy (DOE) Laboratory that is managed by the University. Information on LBNL is reported separately because certain aspects of technology transfer are different at LBNL as compared with the rest of the University. Among these differences is the reporting period which covers the fiscal year ending September 30, 2008.

Part 1: The campus Portfolios

TechnologY TransFer acTiviTY

InventIon RepoRtInGDuring the twelve-month period ending June 30, 2008,

1,497 inventions were disclosed by faculty and researchers at the ten UC campuses; an increase of 6.1% over the number of inventions reported in FY07 (Exhibit 1).

ExhibiT 1

InventIonS RepoRteD

800

900

1000

1100

1200

1300

1400

1500

FY08FY07FY06FY05FY04

1,308

1,497

1,411

1,304

1,196

Much of this increase is accounted for by UC San Francisco, where newly reported inventions increased by 58 from 142 in FY07 to 200 in FY08; and by UC Los Angeles, with an increase of 47 inventions (from 267 to 314). Other campuses with large gains over this period include UC Berkeley, with an increase of 22 inventions (from 133 to 155), and UC Riverside, also with an increase of 22 inventions (from 31 to 53). The campus distribution of newly reported inventions for FY08 is shown in Exhibit 2.

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ExhibiT 2

InventIon DISCLoSUReS BY CAMpUS*Year Ended June 30, 2008

UCSF 200UCB 155

UCD 181

UCI 159

UCLA 314

UCM 12UCR 53UCSB 103UCSC 24UCSD 330

*Inventions having inventors from more than one campus are counted multiple times, once for each campus with an inventor.

As of June 30, 2008, the systemwide invention portfolio was comprised of 8,953 active inventions. The size of each campus invention portfolio is indicated in the exhibit below.

ExhibiT 3

CAMpUS InventIon poRtFoLIoS*Year Ended June 30, 2008

UCB 1,107

UCD 918

UCI 753

UCLA 1,560

UCM 25

UCR 245

UCSB 611

UCSC 140

UCSD 2,355

UCSF 1,422

*Inventions associated with inventors from more than one campus are reported multiple times in this exhibit.


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pAtent ACtIvItYThe University of California has received more US

patents than any other university in the world. A patent is a form of intellectual property protection granted by the US or a foreign government that gives the patent holder the right to exclude others from making, using, or selling the patented invention for a defined period of time, generally twenty years from the date the patent application is first filed. Both US and foreign patent rights often must be pursued for an invention in order to maximize the likelihood of successful commercialization.

ExhibiT 4

pAtent ACtIvItY*Year Ended June 30, 2008

U.S. Applications Filed First Filings – Provisional 576 First Filings – Regular 47 Secondary Filings – Provisional 64 Secondary Filings – Regular 466 Total 1,153

Subtotal – First Filings 623 Subtotal – Secondary Filings 530 Subtotal – Provisional Filings 640 Subtotal – Regular Filings 513

First Foreign Filings* 276

US Patents Issued 224

Foreign Patents Issued 353

*An invention is counted only one time in the first foreign filings category regardless of the number of countries in which foreign patent protection is sought.

Acquiring adequate patent coverage for all aspects of a new technology may require more than one patent filing for a given invention. Often, a first filing in the US takes the form of a provisional application, a type of filing which preserves US patent rights and secures the benefits of an early filing date for a period of 12 months at a relatively low cost as compared to the cost of filing a regular application. A provisional filing is likely to be made during the time period when the invention is being marketed to potential licensees. Once a license agreement is in place, the licensee usually bears the cost of seeking and maintaining patent protection.

Secondary filings frequently lead to the issuance of multiple patents related to a single invention. Secondary

filings are necessary in order to cover all aspects of the invention and may include the following types of filings: divisional applications and continuation applications where new matter is added. Often several years will elapse between a filing and the issuance of a patent by the patent office.

Systemwide patent activity for FY08 is presented in Exhibit 4. The number of first filings declined 3.3% compared to 644 in FY07, while the number of secondary filings declined 6.0% from 564 in FY07. Foreign patents issued declined by 7.3% from 381 in FY07.

Exhibit 5 shows the number of US patents issued to the University in the past five years, with the number of US patents issued declining 32.3% (from 331 to 224) in FY08 as compared to FY07.

ExhibiT 5

US pAtentS ISSUeD to UC

0

50

100

150

200

250

300

350


224

270

310331

270

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At the end of FY08, the systemwide portfolio contained 3,546 US and 3,597 foreign patents (Exhibit 6). The total number of foreign-filed patents continues to exceed the total number of US-filed patents, having first overtaken the total number of US-filed patents in FY06. The number of US patents in each campus portfolio is presented in Exhibit 7. Because of the substantial lag time between invention disclosure/filing and patent issuance, UC Merced, which received its first invention disclosure in FY06, has not yet had a patent issued for its inventions.

ExhibiT 6

totAL UC pAtent poRtFoLIo

0

500

1000

1500

2000

2500

3000

3500

4000


U.S. Foreign

3,546 3,597

2,837

3,1683,024

3,275

3,757

3,4253,692

3,316

ExhibiT 7

CAMpUS US pAtent poRtFoLIoS*Year Ended June 30, 2008

UCB 562

UCD 409

UCI 250

UCLA 536

UCM 0

UCR 79

UCSB 316

UCSC 66

UCSD 573

UCSF 770

* Patents associated with inventors from more than one campus are reported multiple times in this exhibit.


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LICenSInG AnD ReLAteD ACtIvItYA license agreement grants a licensee access to

a University invention in exchange for the licensee’s commitment to further develop and commercialize the invention. Utility licenses generally cover useful processes, machines, manufactured items, or compositions of matter protected by utility patents and are likely to be licensed exclusively. In contrast, plant licenses cover sexually and asexually reproduced plant varieties and most are licensed non-exclusively to multiple growers and distributors worldwide.

The provisions of the license define the rights and responsibilities of the two parties. In the typical utility license agreement, the licensee is granted access to an early stage invention that is protected by a University patent. In exchange, the licensee makes a commitment to commercialize the invention and to pay the University agreed-upon fees, including reimbursement of patent expenses and royalty payments when products reach the marketplace. The specific terms of the agreement are determined through a complex negotiation process. Prior to the execution of a license, certain shorter-term agreements are sometimes executed. A secrecy agreement is used in conjunction with marketing and affords a potential licensee access to confidential information that assists the company in determining if it has an interest in pursuing a license for a given technology. In FY08, the University entered into 685 secrecy agreements. A letter agreement generally is used to confirm a company’s intent to negotiate a license and often commits a company to pay certain fees or patent costs while negotiations are underway. Option agreements are similar in scope to license agreements and protect a licensee’s interest in an invention while more in-depth technical or marketing research is performed.

In FY08, UC entered into 458 licenses and related technology transfer agreements. As indicated in Exhibit 8, these included 159 utility license agreements, 101 plant license agreements, 47 option agreements, and 151 letter agreements.

ExhibiT 8

LICenSInG ACtIvItYYear Ended June 30, 2008

Agreements Executed Letters 151 Options 47 Utility Licenses 159 Plant Licenses 101

Total Active Licenses Utility Licenses 1,359 Plant Licenses 554

At the close of the fiscal year, the systemwide portfolio totaled 1,913 licenses, an increase of 5.2% over the total at the close of FY07. In managing these agreements, the University must collect monies when due and monitor progress to ensure that the licensees exercise due diligence in developing inventions toward commercial application.

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ExhibiT 9

totAL UtILItY LICenSeS

0

200

400

600

800

1000

1200

1400


1,2001,114

1,315

983

1,359

ExhibiT 10

totAL pLAnt LICenSeS

0

200

400

600


473

554488 504

550

Exhibits 9 and 10 show the five year trend in the size of the portfolio of UC utility and plant licenses. Each year some agreements expire or are terminated. In general, the total number of active utility agreements has continued to rise due to increasing licensing activity throughout the system. In the plant area, a wide variety of fruits, vegetables and grasses were the subject of 554 agreements.

UC continues to work with its licensees around the world to explore opportunities for gaining intellectual property protection and commercializing selected strawberry and other plant cultivars in countries where such intellectual property rights have not previously been available. In regard to the distribution of plant licenses among the campuses, UC Davis has 433 plant licenses in its portfolio, UC Riverside has 130. Exhibit 11 shows the number of utility license agreements associated with each campus.

ExhibiT 11

totAL UtILItY LICenSeS BY CAMpUS*Year Ended June 30, 2008

UCB 273

UCD 90

UCI 80

UCLA 204

UCM 2

UCR 25

UCSB 46

UCSC 10

UCSD 292

UCSF 379

*Licenses associated with inventions that have inventors from more than one campus are reported multiple times in this exhibit.


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TechnologY TransFer income

totAL InCoMe FRoM LICenSInGTotal income from licensing—the income the

University receives from its technology agreements with industry—was $128.4 million in FY08 (Exhibit 12) if one excludes $42.6 million received in FY08 for litigation settlements. This FY08 total licensing income represents a 9.8% increase from FY07. Total licensing income has two components, royalty and fee income and reimbursements. The royalty and fee income component includes: agreement issue fees, maintenance fees, and other “milestone” payments received on specific dates or at specific points in the product development process. These payments encourage companies to diligently pursue product commercialization. Generally, earned royalties account for the largest portion of royalty and fee income and are received once products and processes using University inventions reach the marketplace. Reimbursements, the second component of total licensing income, represent the recovery of patent and legal expenses.

ExhibiT 12

totAL LICenSInG InCoMe*(Millions)

0

20

40

60

80

100

120

$140


Patent/legal reimbursement revenue

Royalty & fee income

24.2

104.2

79.3

92.913.9

16.7

93.5

16.5

$128.4

$93.2

$109.6 $110.0

97.6

19.3

$116.9

* The total licensing income reported for FY06 ($110 million) does not include an upfront payment of $100 million from the settlement of litigation, and the total licensing income reported for FY08 ($128.4 million) does not include upfront payments and reimbursements of $42.6 million from the settlement of litigation.

Exhibit 13 shows the amount each campus contributed to FY08 total licensing income. UC San Francisco had the largest increase with its contribution to total income doubling from $33.2 million in FY07 to $66.4 million in FY08.

ExhibiT 13

totAL LICenSInG InCoMe BY CAMpUS*Year Ended June 30, 2008

(Thousands)

UCB $7,659

UCD $9,133

UCI $6,418

UCLA $37,716

UCM $312

UCR $2,237

UCSB $5,987

UCSC $117

UCSD $29,978

UCSF $66,379

Other** $5,047

* Total licensing income consists of two components: royalty and fee income and patent/legal reimbursements.

** Revenues primarily from a portfolio of OTT-managed DOE Laboratory inventions, most disclosed prior to the establishment of the Laboratory-based licensing offices.

RoYALtY AnD Fee InCoMeRoyalty and fee income in FY08 was $104.2 million

when excluding $42.1 million received in FY08 in litigation settlements. This income derived from 1,866 inventions. As compared with FY07, royalty and fee income (excluding settlements) increased by $6.6 million.

In FY08, $2,964,830 was realized from the sale of equity previously acquired under 12 license agreements. As a result of these transactions and the execution of 10 licenses, 2 options, and 2 interinstitutional agreements in FY08 that included equity as a partial consideration, at the end of the fiscal year the University held equity related to technology transfer activities in 102 companies.

Income from the top five commercialized UC inventions (i.e. inventions that had reached the marketplace and were generating royalty and fee income) contributed

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$49.9 million in FY08, accounting for 47.9% of total royalty and fee income (Exhibit 14). The top twenty-five inventions collectively accounted for $78.8 million or 75.6% of total royalties and fees. Inventions appearing on this list for the first time include Optical Network Switch and Connective Tissue Stem Cell.

ExhibiT 14

UC top-eARnInG InventIonS*Year Ended June 30, 2008

(Thousands)

invention (campus, Year disclosed)Hepatitis-B Vaccine (SF, 1979 & 1981) $16,287

Treatment of Intracranial Aneurysms (LA, 1989) $11,736

Interstitial Cystitis Therapy (SD, 1980) $8,670

Egf Receptor Antibodies (SD, 1983) $7,143

Bovine Growth Hormone (SF, 1980) $6,086

Subtotal (top Five Inventions) $49,922

Chromosome Painting (LLNL, 1985, 1989 & 1995) $4,397

Biodegradable Implant Coils (LA, 1998) $3,373

Dynamic Skin Cooling Device (IR, 1993) $2,845

Camarosa Strawberry (DA, 1992) $2,360

Firefly Luciferase (SD, 1984) $1,866

Nicotine Patch (LA, 1984) $1,634

Energy Transfer Primers (BK, 1994) $1,538

Feline AIDS Virus Diagnostic (DA, 1986) $1,227

Laser/Water Atomic Microscope (SB, 1989) $1,173

Aids for Learning Disabled (SF, 1994) $1,130

Albion Strawberry (DA, 2004) $862

Optical Network Switch (DA, 1997) $853

Comparative Genomic Hybridization (SF, 1992) $816

Genomic Microarrays (SF, 1995) $794

Detection of Mycoplasma (IR, 1984) $757

Fluorescent Dyes-Calcium (BK, 1984) $734

Ventana Strawberry (DA, 2001) $700

Connective Tissue Stem Cell (LA, 2000) $635

Universal Oligonucleotide Spacer (BK, 1996) $574

Yeast Expression Vector (SF, 1982) $565

Total income (Top 25 inventions) $78,754

Total income (all inventions) $104,158

% of Total from Top 5 inventions 47.9%

% of Total from Top 25 inventions 75.6%

*This list is limited to revenue-generating inventions that have been commercialized. Total income excludes payments from settlement of litigation.

pAYMentS to JoInt HoLDeRSWhen an invention results from collaboration between

UC and non-UC researchers, multiple entities may become joint holders of the invention-related patents. In these instances, interinstitutional agreements are negotiated to establish which entity will manage the patenting and licensing of the invention and the collection and distribution of invention income; such collaborations are relatively common. In FY08, 295 of 1,497 new disclosures (19.7%) included non-UC inventors and 72 new interinstitutional agreements were signed, an 18.0% increase over FY07.

In FY08, $6.1 million was redistributed to other entities for inventions covered by interinstitutional and other income-sharing agreements. For financial reporting purposes, these monies are treated as an offset to income. As is seen in Exhibit 15, these redistributions have increased from FY07 to FY08, excluding payments for settlement of litigation.

ExhibiT 15

pAYMentS to JoInt HoLDeRS* (Millions)

$5.6$6.1

$5.0$5.4

$4.3

0

2

4

6

8

$10


* The payments to joint holders reported for FY06 ($5.6 million) and FY07 ($4.3 million) do not include payments of $7.9 million in FY06 and $0.5 million in FY07 for the settlement of litigation.

InCoMe ASSoCIAteD wItH pAtent/LeGAL expenSeS

Because inventions are highly technical, the University uses specialized outside attorneys to draft and secure patent protection both in the US and abroad. Costs to secure, maintain and protect patent rights associated with an invention are substantial. Obtaining a licensee’s commitment to reimburse these costs is a high priority


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objective of license negotiations, and reimbursements, therefore, are considered to be part of total licensing revenue. In FY08, the University received $24.2 million in patent/legal expense reimbursements, excluding reimbursements associated with litigation settlements.

TechnologY TransFer exPenses

LeGAL AnD otHeR DIReCt expenSeSLegal and other direct expenses totaled $32.8 million in

FY08 (Exhibit 16), excluding $5.8 million in expenses due to litigation settlements. Most technology transfer legal expenses are associated with patent prosecution defined as payments to outside counsel for drafting patent applications as well as other costs for securing and maintaining patent protection for University inventions. The extent of reimbursement of legal and other direct expenses is a negotiated term of a license agreement and not all agreements commit the licensee to reimburse the University for these costs. Often, patent costs are incurred in advance of executing a licence, which accounts for a portion of unreimbursed expenses in any given fiscal year. In FY08, reimbursements of legal expenses (excluding litigation settlements) totaled $24.2 million, resulting in net legal expenses of $8.7 million (Exhibit 16).

ExhibiT 16

LeGAL expenSeS*(Millions)

Gross legal expensesNet legal expenses

0

10

20

30

$40


$28.7

$34.4

$26.9

$35.1$32.8

$14.8$17.7

$10.4

$15.8

$8.7

* The gross and net legal expenses reported for FY06 do not include $16.2 million in legal expenses for the settlement of litigation. The gross and net legal expenses reported for FY08 do not include $5.8 million in gross legal expenses and $5.2 million in net legal expenses for the settlement of litigation.

Exhibit 17 provides a breakdown of FY08 net legal expenses (i.e., legal expenses after reimbursements) by category. Patent prosecution activities accounted for $6.7 million of the $13.9 million in net legal expenditures. Interference and infringement activities, which accounted for 29% of net legal expenses in FY07, increased to 41% in FY08. The relatively large interference and infringement percentage in FY08 reflects expenses associated with litigation settlements.

ExhibiT 17

net LeGAL expenSeSYear Ended June 30, 2008

Patent Prosecution48%

Legal Defense8%

Other3%

Interference & Infringement41%

It is anticipated that University licensing personnel will continue to be successful in negotiating reimbursement of a substantial amount of patent costs. Nonetheless, it is expected that there will continue to be significant legal expenses associated with patenting and litigation as the technology transfer program matures, patent activities continue to accelerate, and relationships with inventors, sponsors and licensees become increasingly complex.

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income disTriBUTionsThe income derived from royalties and fees, less the

sum of payments to joint holders and less net legal and direct expenses, is distributed in various shares as required under University and campus policies. In FY08, income distributions (excluding income and expenses associated with the settlement of litigation) totaled $89.4 million, distributed as shown in Exhibit 18.

ExhibiT 18

InCoMe DIStRIBUtIonS*(Millions)

0

20

40

60

80

$100


30.0

35.6

2.5**

10.0

38.2

35.2

0.4**

13.6

28.2

25.5

0.4**

31.0

10.1

0.7**

31.3

12.6

33.0

1.4**

Income after mandatory distributions

Inventor shares

**Research allocation share

General fund share

8.2

25.3

$89.4

$59.4$69.8

$77.6 $77.0

* The distributions reported for FY06 do not include a general fund distribution of $10.5 million, inventor share distributions of $29.1 million, nor income after mandatory distributions of $36.2 million related to the settlement of litigation. The distributions reported for FY08 do not include a general fund distribution of $6.0 million, inventor share distributions of $12.9 million, nor income after mandatory distributions of $18.0 million related to the settlement of litigation.

InventoR SHAReSThe University Patent Policy grants inventors the right

to receive a portion of net income accruing to individual inventions. In FY08, 1,818 inventors received a total of $35.2 million (excluding litigation settlements). Under current policy, inventors receive 35% of net invention income. Inventor shares are calculated based on invention income and expense activity through the close of the prior fiscal year. Thus, most of the inventor shares distributed in FY08 were calculated based on invention financial activity through June 30, 2007. Trends related to the amount of inventor share payments are reflected in Exhibit 18.

GeneRAL FUnD SHAReThe portion of University technology transfer income

allocated to the UC General Fund totaled $13.6 million in FY08 (Exhibit 18; excluding litigation settlements). The General Fund share is equal to 25% of the amount remaining after deducting payments to joint holders, net expenses, and inventor share payments from royalty and fee income.

ReSeARCH ALLoCAtIon SHAReThe current Patent Policy requires that 15% of net

royalty and fee income from each invention be designated for research-related purposes on the inventor’s campus or Laboratory. These monies are used in accordance with plans developed at each campus and Laboratory. The research allocation, which is computed based on inventions disclosed on or after October 1, 1997, totaled $2.5 million in FY08 (Exhibit 18).

InCoMe AFteR MAnDAtoRY DIStRIBUtIonSAll income derived from royalties and fees remaining

after deductions for payments to joint holders, net legal and direct expenses, and other distributions, is distributed to the campuses subject to certain other campus-specific debits and credits for patent-related activities (not shown). This category combines expenditures that Annual Reports prior to FY07 showed separately as “Operating Expense” and “Campus Share” distributions. Income after mandatory distributions totaled $38.2 million in FY08 (Exhibit 18; excluding litigation settlements).


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*Activity related to the invention portfolio managed by the nine campus-based licensing offices and OTT on behalf of the ten UC campuses. Activity related to a small number of DOE Laboratory inventions managed at OTT also is reflected in these figures. See pp. 18-19 for activity pertaining to the operation of the DOE Laboratory-based technology transfer offices.

Exhibit 19 only reports activity governed by the UC Patent Policy. It does not include copyright and material transfer agreement activity that also is carried out by campus-based technology transfer offices.

ExhibiT 19

SYSteMwIDe teCHnoLoGY tRAnSFeR ACtIvItY FY04 – FY08*Year Ended June 30, 2008

Fiscal Year comparisons FY04 FY05 FY06 FY07 FY08 % change (FY07-FY08)

Invention Disclosures Inventions Reported 1,196 1,304 1,308 1,411 1,497 6.1% Total Invention Portfolio 6,618 7,395 7,513 8,272 8,953 8.2%

Patent Prosecution US Applications Filed First Filings 515 601 714 644 623 -3.3% Secondary Filings 450 429 470 564 530 -6.0% Total 965 1,030 1,184 1,208 1,153 -4.6% US Patents Issued 270 310 270 331 224 -32.3% Total Active US Patents 3,024 3,275 3,316 3,425 3,546 3.5%

First Foreign Filings 243 284 361 315 276 -12.4% Total Active Foreign Patents 2,837 3,168 3,692 3,757 3,597 -4.3%

Licensing Agreements Issued Options 32 22 29 22 47 113.6% Utility Licenses 145 186 197 209 159 -23.9% Plant Licenses 81 57 115 73 101 38.4%

Total Active Agreements Options 53 52 61 69 91 31.9% Utility Licenses 983 1,114 1,200 1,315 1,359 3.3% Plant Licenses 473 488 550 504 554 9.9%

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Exhibit 20 only reports financial activity governed by the UC Patent Policy. Campus-based technology transfer offices also generate income through copyright licenses, material transfer agreements and through research support committed in conjunction with technology transfer activities. This income is not included in this report.

ExhibiT 20

SYSteMwIDe FInAnCIAL ACtIvItY FY04-FY08Year Ended June 30, 2008

(Thousands)

Fiscal Year comparisons FY04 FY05 FY06 FY07 FY08 % change (FY07-FY08)

Income from Royalties and Fees $79,265 $92,902 $193,500 $97,594 $146,314 50% Less: Payments to Joint Holders (4,990) (5,403) (13,464) (4,798) (6,114) 27% Adjusted Gross Income (A) 74,275 87,499 180,036 92,796 140,200 51%

Legal and Other Direct Expenses (28,761) (34,393) (43,136) (35,087) (38,602) 10% Less: Reimbursements 13,916 16,707 16,545 19,292 24,668 28% Net Legal Expenses (B) (14,845) (17,686) (26,591) (15,795) (13,934) -12%

Income Available for Distribution (A+B) 59,430 69,813 153,445 77,001 126,266 64%

Income Distributions Inventor Shares (C) 25,310 28,228 60,471 35,562 48,087 35% Research Allocation Share (D) 359 422 722 1,380 2,475 79% General Fund Share (E) 8,214 10,138 23,078 10,045 19,545 95% Income After Mandatory Distributions (F) 25,547 31,025 69,174 30,014 56,160 87% Total Income Distributions (C+D+E+F) 59,430 69,813 153,445 77,001 126,266 64%


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Note: A number of inventions involve inventors from multiple UC campuses. Activity statistics for these inventions are reported multiple times, once for each campus involved. Thus, for any given measure of activity, the sum of individual campus numbers may be greater than the systemwide totals reported elsewhere in this report.

Exhibit 21 only reports activity governed by the UC Patent Policy. It does not include copyright and material transfer agreement activity which also is carried out by campus-based technology transfer offices.

ExhibiT 21

FY07 CAMpUS teCHnoLoGY tRAnSFeR ACtIvItYYear Ended June 30, 2008

UcB Ucd Uci Ucla Ucm Ucr UcsB Ucsc Ucsd UcsF

invention disclosure Inventions Reported 155 181 159 314 12 53 103 24 330 200 Total Invention Portfolio 1,017 918 753 1,560 25 245 611 140 2,355 1,422

Patent Prosecution US Applications Filed First Filings 69 65 62 148 14 29 74 12 127 52 Secondary Filings 68 47 60 112 6 10 75 4 85 70 Total 137 112 122 260 20 39 149 16 212 122 US Patents Issued 36 21 28 42 0 3 13 5 45 35 Total Active US Patents 562 409 250 536 0 79 316 66 573 770

First Foreign Filings 33 28 24 73 1 8 42 1 53 24 Total Active Foreign Patents 394 436 382 537 0 126 62 16 812 881

licensing Agreements Issued Options 3 9 2 12 1 3 12 2 2 5 Utility Licenses 20 15 7 26 1 6 5 0 41 44 Plant Licenses 0 99 0 0 0 11 0 0 0 0

Total Active Agreements Options 16 11 4 13 1 7 22 3 7 11 Utility Licenses 273 90 80 204 2 25 46 10 292 379 Plant Licenses 1 433 0 0 0 130 0 0 0 0

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*Exhibit 22 only reports financial activity governed by the UC Patent Policy. Campus-based technology transfer offices also generate income through copyright licenses and material transfer agreements that are not covered by the UC Patent Policy. This income is not included in this report.

ExhibiT 22

FY07 CAMpUS FInAnCIAL ACtIvItY*Year Ended June 30, 2008

(Thousands)

UcB Ucd Uci Ucla Ucm Ucr UcsB Ucsc Ucsd UcsF

Income from Royalties and Fees $5,195 $8,011 $4,694 $32,837 $250 $1,588 $3,880 $33 $22,694 $62,397

Less: Payments to Joint Holders (47) (32) (173) (34) 0 (3) (10) 0 (380) (5,436)

Adjusted Gross Income (A) 5,148 7,979 4,521 32,803 250 1,585 3,871 33 22,313 56,961

Legal and Other Direct Expenses (3,546) (2,962) (2,713) (12,822) (253) (653) (2,552) (166) (7,144) (5,278)

Less: Reimbursements 2,464 1,122 1,724 4,879 62 650 2,107 85 7,284 3,983

Net Legal Expenses (B) (1,082) (1,841) (989) (7,943) (191) (3) (446) (81) 141 (1,295)

Income Available for Distribution (A+B) 4,067 6,139 3,532 24,860 59 1,582 3,425 (48) 22,454 55,666

Income Distributions

Inventor Shares (C) 1,542 3,468 1,983 6,842 17 298 996 41 8,573 23,501

Research Allocation Share (D) 103 157 127 138 7 9 162 17 1,624 130

General Fund Share (E) 631 668 387 4,505 10 321 607 (22) 3,470 8,041

Income After Mandatory Distributions (F) 1,790 1,846 1,034 13,376 24 954 1,659 (84) 8,787 23,993

Total Income Distributions (C+D+E+F) 4,067 6,139 3,532 24,860 59 1,582 3,425 (48) 22,454 55,666

TechnologY TransFer acTiviTY and Financial inFormaTionPart 2: The DOE Laboratory-managed Portfolios

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Part 2: The doe laboratory-managed Portfolios

BackgroundSince 1988, technology transfer for the UC-managed

US Department of Energy (DOE) Laboratories has been under the purview of Laboratory-based offices. In this fiscal year, we will be reporting on technology transfer activity at Lawrence Berkeley National Laboratory (LBNL). The technology transfer programs at Los Alamos National Laboratory (LANL) and Lawrence Livermore National Laboratory (LLNL) will not be covered this year as LANL and LLNL are no longer under direct UC management.

The licensing function at LBNL is managed within the context of a larger department responsible for fostering a variety of partnerships with industry. In addition to patent licensing, LBNL’s Department of Technology Transfer and Intellectual Property Management (TTIPM) directs substantial resources toward the licensing of software and the negotiation of material transfer agreements, non-disclosure agreements, interinstitutional agreements, and other agreements with industry and universities. TTIPM also manages the marketing and outreach efforts for LBNL inventions and includes an in-house patent staff.

Although TTIPM manages most LBNL inventions, the Office of Technology Transfer (OTT) within the Office of the President oversees a small portfolio of older inventions from the DOE Laboratories, including some inventions from LBNL. Most of these cases have co-inventors from the UC campuses.

LBNL manages intellectual property in a way that is generally consistent with the principles and practices of the rest of UC. The primary differences are operational. For example, whereas OTT and campus offices contract with attorneys at outside law firms for all of their patent prosecution activity, LBNL files and prosecutes many of its US patents internally using in-house patent attorneys and agents, and contracts out only for selected matters, primarily for licensed cases and for foreign prosecution. In addition, LBNL operates on a federal fiscal year which ends September 30th in contrast to the June 30th end date for the fiscal year at OTT and the campus offices. Finally, as LBNL is not supported by the State of California, income generated by LBNL is not subject to the General Fund Share assessment.

Information in this section pertains to the activities of the LBNL TTIPM unless noted otherwise.

InventIon DISCLoSURe, pAtentInG, AnD LICenSInG ACtIvItY

In FY08, LBNL researchers disclosed 130 inventions and filed a total of 135 US patent applications. 18 US patents issued on LBNL inventions. LBNL completed 17 new options and licenses for patentable inventions and tangible research products (TRPs) in FY08, bringing the total number of active license and option agreements to 80 at the close of the fiscal year (Exhibit 23). Licensing of other types of intellectual property (e.g., copyrighted software) also represents a significant additional element of current licensing activity.

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ExhibiT 23

pAtentInG AnD LICenSInG ACtIvItY:LBnL ttIpM

Year Ended Sept. 30, 2008

FY07 FY08 %change

Disclosure and Prosecution Inventions Reported 126 130 3.2% US Applications Filed First Filings–Provisional 56 77 37.5% First Filings–Regular 2 0 -100.0% Secondary Filings–Provisional 0 14 N.A. Secondary Filings–Regular 16 44 175.0% Total 74 135 82.4%

US Patents Issued 25 18 -28.0% First Foreign Filings 29 58 100.0%

Marketing and Licensing New Agreements Issued Secrecy 201 202 0.5% Option 2 9 350.0% License 3 8 166.7% Total Active Agreements Option 8 19 137.5% License 61 61 0.0%

FInAnCIAL ReSULtSThe portfolio managed at LBNL generated a total of

$3.2 million in income during FY08, a decline of 0.1% over the prior year. Patent income for LBNL increased 8.0% as compared with FY07, while copyright income decreased by 28.5% (Exhibit 24). This does not include direct reimbursement of legal costs as described in the previous section regarding campus activities.

Information on LBNL patenting and licensing expenses is not provided in this report. In-house patent expenses and operating expenses related to the licensing function are allowable costs under the University’s current contract with DOE and are not readily separable from other expenses of the TTIPM.

ExhibiT 24

FInAnCIAL ACtIvItY: LBnL ttIpM*Year ended September 30, 2008

(Thousands)

FY07 FY08 % change

Income from Royalties and Fees Patents and TRPs $2,502 $2,702 8.0% Copyrights/Software $716 $512 -28.5% Total $3,218 $3,214 -0.1%

Inventor /Author Shares Paid Patents & TRPs $796 N.A.** Copyright/Software, Trademark, & Other $169 N.A.** Total $965 N.A.**

*In addition to income reported in this table, the OTT-managed DOE portfolio collectively generated $4,621,227 in FY08 royalty and fee income, including $222,774 for LBNL inventions.

**Starting FY08, payment of Inventor/Author Shares is deferred until the following year to match campus inventor share payment schedule.

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TechnologY TransFer organizaTion aT Uc

The UC Technology Transfer program operates under a model of distributed responsibilities and authorities that balances activities carried out at the central Office of Technology Transfer with those at the individual UC campuses and at the Lawrence Berkeley National Laboratory (LBNL). Under this approach, the campuses and LBNL develop and shape technology licensing programs to fit their unique needs as put forth in memoranda of understanding negotiated with the UC Office of the President (UCOP). In all instances, OTT retains responsibility for certain functions, such as policy development and guidance, legal oversight, legislative analysis, information management, and a variety of other services in support of the overall program. Internet links to UC OTT, campus and Laboratory-based technology transfer offices are provided below.

UC technology transfer on the web

UC Office of the President: Office of Technology Transfer (OTT) http://www.ucop.edu/ott

UC Berkeley: Office of Intellectual Property & Industry Research Alliances (IPIRA) http://ipira.berkeley.edu

UC Davis: UC Davis InnovationAccess http://www.innovationaccess.ucdavis.edu

UC Irvine: Office of Technology Alliances (OTA) http://www.ota.uci.edu

UC Los Angeles: Office of Intellectual Property & Industry http://www.research.ucla.edu/oipa Sponsored Research (OIP-ISR)

UC Merced: Office of Technology Transfer (OTT) http://research.ucmerced.edu

UC Riverside: Office of Technology Commercialization (OTC) http://www.ora.ucr.edu/ip

UC Santa Barbara: Office of Technology & Industry Alliances (TIA) http://research.ucsb.edu/tech_transfer

UC Santa Cruz: Office for Management of Intellectual Property (OMIP) http://research.ucsc.edu/intel_prop.html

UC San Diego: Technology Transfer Office (TTO) http://invent.ucsd.edu

UC San Francisco: Office of Technology Management (OTM) http://www.otm.ucsf.edu

Lawrence Berkeley National Laboratory: Technology Transfer & Intellectual http://www.lbl.gov/Tech-Transfer Property Management (TTIPM)

Industry-University Cooperative Research Program (IUCRP) http://ucdiscoverygrant.org

univers i ty o f ca l i forn iaof f ice o f techno lgy transfer

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