Who Owns Your Great Idea?

NOW THAT’S RECYCLING Matthew Naples, left, and Peter Zummo designed bottles that, once empty, snap together for housing in developing countries.

Peter Zummo, a senior double-majoring in design and mechanical engineering at Rensselaer Polytechnic Institute, is used to explaining the products he thinks up for his studio-class assignments. But last spring, he found himself answering questions of a different kind in a conference room at Rensselaer’s office of technology commercialization, which tracks and patents inventions made on campus.

Mr. Zummo and his classmate Matthew Naples, who was attending the meeting via speakerphone, had designed a water bottle that could be filled with sand and reused as a brick to build housing in developing countries. The director of the office, Charles Rancourt, sitting across the table from Mr. Zummo, wanted to know: When had they come up with their design? Had they held brainstorming sessions on campus or off? What equipment had they used to produce their prototypes?

Colleges and universities own the ideas and technologies invented by the people who work for them, including professors and graduate students who are paid to do research. Most universities also own inventions created by students using a significant amount of their resources, even if the inventors are undergraduates like Mr. Zummo and Mr. Naples, both 21.
The question of whether the two students or R.P.I. owned their invention was a tricky one. They had first designed plastic bottles that snapped together, Lego style, with two other students for a freshman design class project that challenged them to solve a social problem. Their idea was to keep the billions of water bottles that people in developing nations throw away each year out of landfills while providing the poor with free building materials. They presented a paper and a prototype in class, but “it was a crude concept, and we never really hit our goals with our first rendition,” Mr. Naples says.
As juniors, he and Mr. Zummo decided to tinker with the design again on their own (the rest of the original group didn’t want to join them), brainstorming off the Troy, N.Y., campus and interviewing bottle manufacturers about the molding process and materials. They developed a new design that was cheaper to manufacture and could withstand more types of stresses than the first.

With entrepreneurship booming, especially in ­courses that mix M.B.A. candidates with budding physicians or engineers, more and younger students are coming up with ideas that have commercial potential. While formal programs offer classes in managing intellectual property, plenty of students develop their ideas with little knowledge of how ownership is determined or the pros and cons of involving the university.

“Universities want to get whatever revenue streams come out of inventions so they can build more labs, have more research going on and hire more professors,” says David Schwartz, executive editor of Technology Transfer Tactics, a newsletter for people working in the field. Lisa Rooney, director of Ohio University’s tech transfer office, notes another interest: “Most universities have a broader economic mission to help out their communities and states, and licensing or starting new companies is a way to do that.”

Colleges and universities obtained fewer than 250 patents a year before 1980, when the Bayh-Dole Act gave them ownership of inventions developed through federally financed research. Now they acquire about 3,000 a year, according to the Association of University Technology Managers, whose members work in tech transfer offices. In 2006, association members made $45 billion from licensing fees and equity in spinoff companies; research powerhouses like Stanford and New York University made $61 million and $157 million, respectively.

University help can be a boon for student inventors, too. A third to half of the money generated by a product is typically assigned to the student, with the rest split between the student’s department and the university. That’s a better deal than the zero percent collected by scientists working for corporations. And universities cover the legal fees involved in obtaining patents on inventions they own, which can easily total $15,000 a patent.