Every year, American universities spend millions of dollars patenting inventions developed on their campuses. Big names such as Stanford and the University of California system lead the pack in patent activity, but hundreds of other universities are also trying to strike gold by monetizing intellectual property. The idea is simple: By investing in patents and selling or licensing them to industry, the university will profit.
But in practice, this strategy rarely pays off.
Indeed, the results of a recent study I conducted using full-cost accounting shows the average American research university is losing millions of dollars on patents annually. One school I examined as a case study lost a staggering $9 million on intellectual property investments in one year.
