Objective

To determine the extent of implementation of the two recommendations included in our initial audit report, Technology Transfer Program and Royalty Payments (Report 2019-S-10).

About the Program

As part of its duties, the Research Foundation for the State University of New York (Research Foundation) supports the State University of New York’s (SUNY) technology transfer activity – the formal transfer of rights for intellectual property (IP) developed using SUNY resources. Technology transfer is a collaborative process that requires efforts from the Research Foundation, IP creators, and industry partners to translate such discoveries into commercial products and services that benefit society. According to the Association of University Technology Managers, academic technology transfer adds billions of dollars to the U.S. economy and supports hundreds of thousands of jobs. The Research Foundation follows SUNY’s Patents and Inventions Policy (Policy). The Policy aims to encourage innovation, assist creators, and ensure the public receives the benefit of such innovation. Steps toward this end include encouraging disclosure of IP, securing protections, marketing IP through licensing and other arrangements, and managing royalties and other related income, such as litigation proceeds.

Our initial audit report, issued on January 17, 2020, sought to determine whether the Research Foundation had taken the appropriate steps to protect SUNY’s interest in the transfer of technology and royalties received for IP developed at SUNY campuses. The initial audit covered the period January 1, 2015 through August 14, 2019. During the initial audit, we found that, generally, the Research Foundation had taken steps to protect SUNY’s interest in the transfer of technology and royalties for projects developed at SUNY schools. We found the Research Foundation retained ownership rights for 94 percent of all IP disclosures from January 1, 2015 through March 12, 2019; made decisions about retaining ownership rights for disclosed IP within the applicable time frames; verified that royalty payments were correctly calculated by the licensees based on the license agreement and the licensees’ royalty reports; and correctly allocated royalties to the applicable campus and creator accounts. However, the Research Foundation had not developed standardized monitoring mechanisms to determine whether a licensee was accurately reporting net sales and paying the full royalty owed. Additionally, SUNY Downstate had accumulated $1,019,390 in campus royalty revenues, none of which had been reinvested to support SUNY research programs.

Key Finding

Research Foundation officials have made progress in addressing the audit findings identified in the initial audit report. Both of the initial report’s audit recommendations have been implemented.