Penn State intellectual property auction coming to close

April 9, 2014 11:24 PM By Deborah M. Todd / Pittsburgh Post Gazette

With the clock ticking toward the end of Penn State University’s first intellectual property licensing auction, officials are hoping to see eBay-style bidding wars break out over university innovations.

Hoping to draw attention to university patents with dwindling shelf lives, on March 31 Penn State launched the Intellectual Property Auction Website. The site — the first of its kind among American universities — gave corporations, public organization and private citizens alike the chance to bid on licensing rights for approximately 70 patents created in the university’s School of Engineering.

Following the lead of most popular e-bidding sites, participants who sign up on the I-PAW site will receive options to place minimum and maximum bids, and will be sent notifications any time they have been outbid.

The auction focuses on engineering innovations such as acoustics, fuel cells and sensors because the engineering school had the most intellectual property offerings, said Ron Huss, Penn State’s associate vice president for research and technology.

However, if the engineering auction is successful, the public can expect to see patents from the schools of technology, physical sciences, life sciences, chemistry, agriculture and materials science auctioned off in the near future.

With newer patents in the engineering auction opening with minimum bids near $10,000 and patents closer to the end of their 20-year life cycle bringing in minimum bids as low as $5,000, buyers could catch some significant deals between now and the auction’s Friday close.

“This is a last chance. Many of these technologies have been around for a while, so this is the last opportunity to take a look to see what’s available using this venue. And there are likely to still be some bargains available,” said Don Mothersbaugh, senior technology specialist at Penn State’s office of technology management.

Mr. Huss said the office of technology management came up with the idea for the auction because past efforts to market university patents to private and public sector organizations have resulted in only 40 percent of the school’s intellectual property being licensed.

Mr. Mothersbaugh said that figure is common among universities seeking to commercialize patents. Several other institutions have already contacted Penn State to see if the experiment has paid off.

“Every university has some type of office that does what we do, and they’re having the same kind of success as we’ve had,” he said, noting the national average for commercializing university patents was somewhere between 33 percent and 40 percent.

Even before Penn State’s efforts kicked off, universities were turning to online auctions as potential marketplaces for intellectual property, said Joseph Popolo, president of Reno, N.V.-based online intellectual property auctioning site IpAuctions. Mr. Popolo said the company has been approached by the University of Arkansas to sell patents and they hope to work with Penn State in the future to revise their strategy.

“For the last 13 years we’ve been marketing intellectual property and patents I have felt, based on experience, that universities don’t have the same momentum in terms of commercialization that profit-making companies do,” said Mr. Popolo.

IpAuctions managing director Kevin Kraus said schools often don’t focus on profiting from research because faculty inventors are often focused on actual research and publishing to maintain academic credentials and tenure.

“Universities aren’t set up like businesses are, where the research and development in business is designed to be commercialized and generating a return on research and development is fundamental,” he said.

He said Penn State’s approach, while ambitious, could use several points of revision. He said IpAuctions typically lists up to five patents from a single entity in a single auction so marketing materials can be sent out that fully explain how the patents can be used commercially.

He also said the company’s format allows bidding to continue a full 10 minutes after someone is outbid to draw the highest prices possible for the properties.

Still, Mr. Kraus said, Penn State is setting a path that he expects many more universities will follow. “Technologies to be commercialized are a hidden, underutilized asset that universities have,” he said.

Although early sales results weren’t available for the auction, the initiative is a hit with faculty and students anxious to see the fruits of their research applied to a larger purpose, said Mr. Huss. A large factor in winning their approval was an ironclad licensing agreement designed to ensure the property is actually put to use.

“This license agreement is slanted toward companies that would have an interest in practically using the technology for new developments and taking the technology that’s been developed into production of products offered to the public,” said Mr. Mothersbaugh.

Mr. Huss said the final results of the auction won’t be available until early next week, but the true measure of its impact should start to become clear as deals are sealed during the final moments.

“It’s kind of like eBay. You get bids but, until the last hour before the auction ends, you really don’t know how successful it’s going to be.”

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Deborah M. Todd: or 412-263-1652. Twitter: @deborahtodd.

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