Often universities do this, they may own the patent and license it to the company or take a cut etc. Arizona State University appear to do this through Skysong Innovations:

https://skysonginnovations.com/startups/list/

It's interesting they got a lot of funding from over 100 families with autism children:

https://skysonginnovations.com/startups/list/

This is how it works. Universities are doing research, they aren't doing products. If a commercially viable product comes out of their research it is far outside the scope of universities.

Also keep in mind that most sciences usually don't produce commercially viable research (think social sciences, archeology, geography etc.)

And as others said: how the universities gets a cut from the spin offs differs from university to university.

“Universities” aren’t doing anything. Without the people that drive this they would just be admin people looking at each other and professors teaching to empty desks. Let’s not forget that often if a research was ran by X little group of people, once they move on, the people that come in have their own interests and it’s unlikely they’ll continue the project. How many unpublished papers sit because the student doing the research got a job, a life, doesn’t have time to continue and the PI can’t have some other student relearn the whole thing to finish it?

I understand the researchers lean on the infrastructure of the university, but I’m sure they paid their dues both in money payments to the university, depraved sleep and sweat. People need to eat, so I see nothing wrong with them putting their effort to work if that means the research continues and gets to the people, the university likely gets a cut as others mentioned.

Yep. The alternative is usually that the product doesn't get manuactured. And the public funds loads of research which starts within private companies and stays there anyway...

As others have said, very common. A famous example is Lyrica, which made an enormous amount of money for Northwestern, probably around $1 billion dollars. It played a not-insignificant role in the university's rise in the last 10-20 years.

Universities love this and encourage it. Any big place will have an office of "technology transfer" or similar to help researchers make this happen.

The best part for NU is they didn’t even have to pay for the research, it was publicly funded:

> Pregabalin was discovered largely on the basis of publicly funded research at Northwestern University

https://pubmed.ncbi.nlm.nih.gov/34493615/

It's quite common historically. The Entrepreneurial State by Mariana Mazzucato looks at this phenomenon of companies privatizing the benefits of publicly funded research and, she argues, not giving enough in return

The economist Mariana Mazzucato has some eye opening books about innovation and the role of governments. They are eye opening and dispel a lot of myths

> So the university researchers use time and money from the university to make a discovery, extending on previous published research, and then patent it and start their own for-profit?

it happens all the time, and in many countries. Its quite common in the UK.

I think the university gets a cut. Kinda like how Gatorade is making I can’t remember which university incredible amounts of money for the last several decades.

Florida. The name comes from the name of their athletic teams: The Gators.

The University of Florida, thus the name "Gatorade." or "Gator-aid," if you will.

> So the university researchers use time and money from the university

Don’t worry, the money is usually coming from taxpayers so the universities don’t have to dip into their endowments

Funny thing is, that may be a bigger concern here, that the research is often publicly funded while the uses of that research and the profits that come with them are kept private. It’s complicated and I buy the notion that research improves the economy as a whole, but it is also true that when research gets patented and becomes a billion dollar product, those dollars don’t reduce any taxes directly.

The public funds the research so that it gets done in the first place. It's not a venture investment.

What do you mean? Research funding absolutely is an investment. Research that is productized is a venture, and the universities involved absolutely do invest in the venture, and sometimes see a handsome ROI.

In terms of why the public funds research, your statement might be true, but isn’t addressing the concern that many in the public have raised before: the results of the research should be public, given that the research was publicly funded. We have laws about open access to government functions, so why is research different?

There are often a lot of steps between a discovery (or even a patent) and commercial viability. Patents make it easier for the companies to raise funding to do that work and move from theoretical or small scale to an actual product.

Also you could argue that patents are open access. The whole point of a patent is you give a complete summary of what the invention is and how to replicate it (with a level of detail that would allow someone knowledgeable in the field to recreate it) in exchange for a time limited legal moat.

> In terms of why the public funds research, your statement might be true

Yes this is what I meant. We fund research because we think pure research is valuable. It needs to be done without requiring a financial return. Products sometimes come out of it and that's also a public benefit, but direct results of the research are not a "product" they are the starting point to a possible product. There is still a lot of development that has to occur to get to the product stage.

That’s all true and I agree with all of that. But again, that doesn’t address why publicly funded research ought to be locked away for private gain. This is not to look a gift-horse in the mouth; open access publication has really taken off in the last 5 years, but for a long time until recently, the research itself was only available for relatively hefty fees from private, for-profit publishers. And nothing’s changed about the patent and university venture system; publicly funded research isn’t up for grabs by the public, and when successful, the profits don’t go to the public. The patent system as incentive to invest in research makes sense when protecting private companies that take risks with private money, but why should the public only get the indirect trickle-down benefits of research, when they pay for it directly?

Yes this is very common and a big part of why scientific progress often seems so hamstrung

Why hamstrung?

Yes, it's really common. Most universities actually support this and there is a specific contractual framework for staff which basically says "If you create a company during or after your work at university which touches the field you were researching in, we get 1% (or 10% or 20%) of your annual revenue as license fees".

The alternatives are lengthy court battles between universities and their best (e.g. most commercial) researchers. This creates bad PR for the university and uncertainty for the researcher & their startups because potential investors don't like open court cases.

So people came around to make this kind of license fee contract and researchers check it before deciding to join a certain university.

Not a fan of gene / bacteria patents though.

Universities often keep up to 50% of rights over IP in such cases but I am unsure about this specific case.

100% is common. Stanford was paid hundreds of millions by Google over the years for the use of the patented PageRank algorithm, invented by Google's founders while Stanford students, and therefore owned by Stanford.

Most universities have IP policies giving them ownership of most of the IP their academics create, and student IP may or may not be included. Some exceptions are Duke and Waterloo.

Yes this is really common. Not all universities own the research you do. I have a similar setup within my university. They get to use the research technique I've worked on, but I have the rights to take it out of the university and sell it.