Office of Technology Licensing (OTL)

1. The Office of Technology Licensing evaluates, markets and licenses technology owned by Stanford University. OTL's mission is to encourage effective technology transfer for the public benefit, as well as to generate royalty income to further Stanford research and education. In addition to patents, OTL handles copyrights (primarily for software), and trademark licensing (the Stanford name on T-shirts, etc.), tangible research property, including non-patented biological materials such as a transgenic mouse, and material transfer agreements - which generally involve no transfer of funds - for outgoing and incoming use of biological materials. OTL handles industrial contracts, while all other sponsored research falls under the purview of the university's Sponsored Projects Office, now separate from OTL.

2. OTL receives more than 200 invention disclosures per year, 25 to 40 percent of which result in patent applications. From this pool, OTL signs about 70 to 90 new licenses per year. In 1996-97, licenses ranged from no cost to $880,000, with an average upfront license royalty of $34,000. OTL can accept equity in partial compensation for licenses.

3. In the 1997-98 fiscal year, OTL received $61.2 million in gross royalty income from 298 different technologies, an increase of 15 percent from the previous fiscal year. Three-fifths of that amount, $37.3 million, came from the Cohen-Boyer Recombinant DNA patents, which expired in 1997. The DNA patents, based on the pioneering work of Stanford geneticist Stanley Cohen and UCSF colleague Herbert Boyer, is shared with UCSF, so net revenue in 1997-98 for Stanford was $21.4 million. Stanford continues to receive significant royalties based on DNA licensees' inventory of products made under the patent. As of Aug. 31, 1998, the DNA patent had generated $231 million in total royalties, representing $41.5 billion in product sales.

4. Twenty-four technologies, which accounted for more than 90 percent of OTL's income, generated at least $100,000 each in 1996-97. Licensing of Stanford trademarks accounted for more than $268,000.

5. Income, exclusive of the Cohen-Boyer patents, grows at the rate of about 20 percent per year, and total income for 1997-98 was $61.2 million. This includes $7.9 million in liquidated equity following Texas Instruments' acquisition of Amati Corporation, which was founded as a faculty startup in 1992. The company develops technology to facilitate high-speed data transmission over telephone lines.

6. Another major technology licensed through OTL includes Sondius-XG, which involves music synthesis inventions based on Stanford and Yamaha technology. In July 1997, OTL concluded an agreement with the Yamaha Corporation to combine their respective patent portfolios. Additional promising technology includes a continuous cardiac output monitor; Baxter Healthcare Corp. holds an exclusive license to Stanford technology for measuring the flow of blood through the heart. This license generated more than $450,000 in royalty income in 1996-97.

7. In 1996-97, inventors received personal income of $8 million through OTL. Stanford departments received $8.3 million and Stanford schools received about $8.4 million. Of the latter, $6.8 million went to the School of Medicine. OTL paid $3.7 million into the OTL Research Incentive Fund, administered by the university's dean of research to support early-stage innovative research ideas.

8. Besides licensing, OTL offers a number of other programs, including an Industrial Contracts Office to facilitate industry-Stanford contracts. OTL helps support an independent Medical Device Network (MDN), which was established by Yock and colleagues to encourage interaction among doctors and companies around medical device technology. OTL also sponsors conferences and seminars, publishes a quarterly newsletter, Brainstorm.

9. OTL was founded in 1970 by Niels Reimers, who directed the office until he was succeeded by Ku in 1991. When it began, the office was a one-person pilot program generating $55,000 from three technologies. OTL's current operating budget is about $2.2 million per year, funded largely by a 15 percent surcharge on gross royalties.

10. The current OTL staff consists of some 25 people, including six full-time and one part-time associates, who make patentfiling decisions and negotiate license agreements with companies. Each associate has an area of technical expertise and is responsible for each "case" from initial phone call to completion. Licensing assistants and support staff, including an accounting manager and manager of information, round out the OTL team. OTL contracts with outside patent attorneys for services.

11. Ku holds a master's in chemical engineering from Washington University, St. Louis. She first came to Stanford in 1979 from research positions at Monsanto and Sigma Chemical. She left Stanford in 1990 to become vice president of business development at Protein Design Labs Inc. in Mountain View. Ku returned to Stanford in 1991 as director of OTL, and from 1994 to 1998, she served concurrently as director of Stanford's Sponsored Project's Office. Ku is active in a variety of professional organizations, and served a term as president of the Association of University Technology Managers from 1988-1990.

After Smith received her PhD in cancer biology from Stanford University in 1995, she worked as a scientist for Alza Corp. in Palo Alto for two years. She became involved in the business aspects of corporate science, an area of expertise she has pursued at Stanford since joining OTL in March 1997. As an OTL associate, Smith is responsible for biotechnology, including molecular biology, genetics, immunology, gene therapy, genomics and medical devices.

An internationally-renowned interventional cardiologist, Yock received his medical degree from Harvard University in 1979. After completing a residency in medicine at UCSF, he trained as a fellow in cardiology and continued here for an additional year as a physician specialist. In 1986, Yock joined the UCSF medical faculty and then returned to Stanford in 1994 as an associate professor and director of the Center for Research in Cardiovascular Interventions. He has served as acting chief of the Division of Cardiovascular Medicine and now serves as associate chief. Yock was promoted to professor of medicine in September.

12. OTL is located at 900 Welch Road, Suite 350, phone (650) 723-0651. For more information, OTL's website address is www. stanford.edu/group/OTL.

13. Faculty members in the leadership group for the MDN, which works with OTL, are John Adler, neurosurgery; Michael Dake, interventional radiology; Peter Fitzgerald, medicine; Stuart Goodman, functional restoration; Robert Hu, medicine; Robert Robbins, cardiothoracic surgery; and Charles Taylor, vascular surgery and mechanical engineering. The MDN coordinator is Sandra Miller, (650) 498-7856. Find the MDN on the Web (www-MDN. Stanford.edu).

President's Column

Fact File: OTL
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