According to the Association of University Technology Managers (AUTM), over 4,500 companies have sprung from non-profit sources since 1980, with patents as the spur. Less than 250 patents were granted to universities in 1980; more than 3,800 in 2004. 191 institutions spent $221.4 million in legal fees in 2004, up from less than $50 million in 1992. Most significantly, around 3,100 products have become available on the market as a result of that patenting.

Andy Chon, of Wisconsin Alumni Research Foundation (WARF), which holds crucial stem cell patents, and applies for nearly 100 patents a year, says, "I think the Bayh-Dole Act is directly responsible. Many inventions were made before 1980, but there was no incentive for universities to go through the pain to patent those." The University of California, particularly the Berkeley campus, MIT, California Institute of Technology, Stanford, and the University of Texas are also big patent grabbers. Here's the 2005 top 10 patenting universities.

Before Bayh-Dole, university researchers didn't patent, they published. In the early 1980s, only 0.4% of patents were filed on behalf of universities, hospitals, and other non-profits. Without patent protection, any innovation is readily copied, providing an economic disincentive to invest in invention; hence the federal funding in the first place. As universities and hospitals aren't manufacturers, practically the only way for them to profit from their research is through patents - a company would only take a license to a technology if it were patented, with infringement penalty attached.

While universities have yet to sue each other for patent infringement, it seems inevitable, as the payoff potential is just too tempting. Then again, as with corporate patent forays, counterclaim potential is likely to serve as a caution; not to mention the bad publicity of one university suing another over patents - it seems unseemly, professor.

Patent licensing fees help universities avoid financial peril. The University of California raked in over $500 million from Microsoft in a hard-fought litigation over the notorious Eolas patent (5,838,906). Simply because of the sheer increasing volume of university patenting, university patent assertions have increased, and are bound to continue on a upward trend.