Stanford University is an ideal location for invention and innovation. Just ask Google founders Sergey Brin and Larry Page as well as the guys at Cisco, Hewlett Packard and Yahoo!, all of whom got their starts at Stanford.
With vast University resources minutes from the venture capital hub of the world in the heart of the Silicon Valley, inventors have all they could ask for to bring that lightbulb over their head to fruition as a fully formed patentable technology.
There’s one catch. By law, any discovery or invention that was made with more than incidental use of Stanford resources, belongs to Stanford, not the inventor. Brin and Page learned this with their Google page-rank technology, which they licensed through Stanford.
What does incidental use of resources mean? “Well, it’s easier to explain what is not considered incidental,” said Linda Chao, senior associate for Stanford’s Office of Technology Licensing. Non-incidental use means using specialized labs, equipment, tools and information that could not be easily accessed outside of the university.
At an Entrepreneurship Week presentation today, “Commercializing Stanford Innovation,” Chao spoke with students, entrepreneurs and researchers about the steps inventors have to take to get their ideas licensed and into the market, a process that often takes years.
The process, Chao explained, goes a little like this.
Stanford researchers use funding and resources at the university to develop a new technology. The inventors must then disclose their idea to the Office of Technology Licensing, which will decide what type of patent protection is needed. During this part, the licensing office also markets the idea to companies that may be interested in licensing the idea. From there the office licenses the technology to one or more companies, who will take the technology, create a product, bring that product to market and sell, sell, sell.
That’s when the money rolls in. Stanford collects royalties from the sales and divvies it up by thirds: one third to the inventors, one third to the inventors’ department, and one third to Stanford.
Over the years, Stanford has raked in $1.33 billion in royalties. Innovation is big business.
As it is Entrepreneurship Week, the question on many of the seminar’s attendees minds was, “Does Stanford give priority to the inventors if they want to license their inventions exclusively in their own startup?”
“We decide what’s best for the technology,” Chao said. So, student inventors disclose their idea and make it known that they would like to license the idea from Stanford exclusively for their own startup. However, they have little money and a sketchy business model. It’s unlikely that Stanford will grant these inventors an exclusive license, especially if another company with capital, infrastructure, and a plan to get the technology to market is also interested in licensing.
“In that case, we will likely grant both a license,” Chao said, emphasizing that it was Stanford’s priority to move the technology forward and get it to the marketplace as quickly as possible.
Many in the seminar, including two undergraduate inventors, wondered when is the best time to disclose their idea.
“It depends,” Chao said. “But for new people, it’s probably best to come in earlier, so we can advise them about the process and what they need to do to move forward.” Chao also warned that if researchers publish their findings, they only have one year to patent it before it’s in the public domain.
So if any researchers out there published their technology 350 days ago, it would be a good idea to get down to the licensing office.
In fact, Chao suggested that its a good idea to come check out the office even before you have an idea to disclose. “We do consistent outreach,” Chao said. The first Friday of every month the office holds an informational meeting at 10 a.m.
“In another way,” Chao added, the office provides researchers ” an educational process about patents.”
Chao’s presentation was a part of Stanford’s Entrepreneurship Week. The full schedule of events can be found at the Stanford Entrepreneurship Network’s website.