Three narratives have come together to support the transformation of American university innovation policy from one of diversity and institutional support to one of monopoly institutional control of research inventions, heralded as the best thing for the country. All the technical details aside, it still amazes me that anyone would jump at the idea that requiring a university bureaucrat’s thumb in every creative work is the critical catalyst for an innovation economy. It’s not like you wake up one morning and go, “That’s it, I have got it, we should just have more bureaucrats involved! Have the bureaucrats pick the winners! Have the bureaucrats choose which of their crony business friends to chum with! Yes! Brilliant!” I have yet to see a policy article just come out with the argument: “what is missing in American university research impact is . . . insufficient monopoly control of faculty work by bureaucrats aiming to be better speculative investors than professional speculative investors.”
However, here is an article that illustrates the application of the three-corded narrative approach to university innovation management. “Science and the Entrepreneurial University” by Richard C. Atkinson and Patricia C. Pelfrey was published in 2010 in Issues in Science and Technology and was created for a conference presentation by Dr. Atkinson. Dr. Atkinson has been a director of the National Science Foundation and served as president of the University of California. This is not the work of a peripheral player in matters of research. He has been the leader of two tremendously important institutions. The subtitle of the article is:
Research universities have been key in driving the U.S. economy. Keeping their engines revving will require facing some critical challenges.
Even here we are given an interpretative challenge. Are the authors arguing that the drivers of the economy are universities-as-institutions or universities-as-associations-of-faculty-and-other-creative-folk? “University” could refer to either, or both. And it makes a difference. One might argue that it is the creative folks–the faculty, staff, and students–that are the drivers, and the university-as-institution serves to provide them the support and common resources they need to be effective in teaching each other what they know. One might also argue that it is the institution that is the driver, harvesting “knowledge” and “intellectual property” and through application of processes and provision of resources to these processes, drives the economy.
In this second way of arguing, assets are exchangeable–what matters are organized abstractions–“new knowledge,” “inventions,”–traded among organizations for value, who then hire and fire as needed to exploit their trading positions. In the first way of arguing, individuals discover, realize, develop, create, compose, and epiph, and in association with others publish, teach, demonstrate, inspire, advocate, warn, challenge, seduce, disseminate, sell, and support. They also disagree, fumble, fume, compete, jockey, reject, ignore, suppress, forget, and mistake what they and others do.
In one version, a “market for the future” to be invested in, presented by institutions to investors looking for ways to land a huge upside. In the other, “a fair field full of folk, working and wandering as the world asks.” Which, then, is the more likely starting point for an “engine” that will “drive” the economy?
This brings us to the subtitle’s extended metaphor on “driving.” Is this meant as an ornament; that is, that the driving metaphor is a clever way of saying that the stuff going on at universities has contributions to make to the economy, and it takes some doing for these contributions to be realized (if they haven’t) or to continue (if they have)? Or is there a claim here that the economy depends essentially on research universities, and in particular on research, in which case we might ask, just what then are the “engines” in “universities”? We may also ask, generally, if things are so good for research universities that they drive the economy, what is it that now leads to there being critical challenges–something must not be working right, designed right, or properly anticipated. So, what has changed?
“Science and the Entrepreneurial University” is striking in making the case for research universities to be important as institutions, for its recasting of progress the movement of individual initiative to institutional control, and for its inability to connect claims of the economic significance of innovation to the administrative activities of research universities seeking to be “entrepreneurial. The authors frame their work with four “broad developments”–three of which comprise the three corded narrative: (1) Vannevar Bush’s Science the Endless Frontier (made to represent the linear model); (2) Bayh-Dole (playing itself, misconstructed); and (3) the University of California’s innovative technology transfer programs (which are depicted as wildly successful).
Science the Endless Frontier as Proxy for the Linear Model
Vannevar Bush’s Science the Endless Frontier will take up the greater part of this discussion, for it is in an understanding of the argument Bush presents that one can see the divergence of the university administrator-preferred narrative. As Dr. Atkinson argues, STEF is indeed an important document in the history of U.S. science policy. It lays the groundwork–or represents that such groundwork had been laid–for the government to seek to deploy what was learned in World War II to civilian activity. If gadgeteers and scientists from industry and the most wildly creative of university faculty could come together and build new things, important things–digital computers, atomic bombs, radar, sonar–then could not similar associations, supported by government funding, also advise and enable industry and community as they had the military and government during the war? The challenge for Bush was to figure out how to preserve the nature of the associations that worked, while making the transition from military to other audiences of power, such as industry. The purpose of STEF was to provide a funding mechanism for such work without the contingency of war as the motivation. The aim was how to continue this collaboration, while shifting it to objectives other than war. That, then, appears to be the foundation of the policy effort in STEF.
As we look at Dr. Atkinson’s portrayal, however, things being to distort. Where Bush emphasizes the importance of universities training people in science, Atkinson argues that the effort was “to provide industry and the military with a permanent pool of scientific knowledge to ensure economic growth and defense.” Here is a selection of what Bush argues:
First, we must have plenty of men and women trained in science, for upon them depends both the creation of new knowledge and its application to practical purposes. Second, we must strengthen the centers of basic research which are principally the colleges, universities, and research institutes.
The plans should be designed to attract into science only that proportion of youthful talent appropriate to the needs of science in relation to the other needs of the nation for high abilities.
There must be a stream of new scientific knowledge to turn the wheels of private and public enterprise. There must be plenty of men and women trained in science and technology for upon them depend both the creation of new knowledge and its application to practical purposes.
Bush is talking about people, and about training, and about getting trained people out into society, where they can contribute to innovation. The “stream” of knowledge is carried by people, not patents. This is what Bush would consider “technology transfer.” Dr. Atkinson turns this all into an abstraction, a “permanent pool of scientific knowledge” as if Bush had proposed making a library and left out how to purchase a borrowing card.
Why, according to Bush, are universities and research institutions important?
These institutions provide the environment which is most conducive to the creation of new scientific knowledge and least under pressure for immediate, tangible results.
It is chiefly in these institutions that scientists may work in an atmosphere which is relatively free from the adverse pressure of convention, prejudice, or commercial necessity. At their best they provide the scientific worker with a strong sense of solidarity and security, as well as a substantial degree of personal intellectual freedom.
The role of the university is to provide an environment for creating knowledge. There is nothing in STEF about university administrators taking control over who can practice new knowledge as part of an environment “most conducive” to creating that knowledge. It’s just not there.
The discussion surrounding ownership of inventions has to be seen in the light of the patent policies at universities in the 1940s: namely, few universities had such policies, and many of those policies disclaimed university invention ownership, preferring agents or no patents at all, or if patents were to be held, to hold them for the good of all, not to create artificial monopolies attractive to speculators. That was the university environment that Bush was referring to, at least with regard to patent policy.
The primary bit for Bush is education. Basic research runs in parallel. The effort in universities is to expand the “frontiers of knowledge.” That is different than creating a “pool of knowledge.” That is different, even, from finding patents to hold against industry and willing to pay to secure their investment position, and calling such dealings “economic development” or “public benefit.” In some government definitions of basic research, the possibility of inventing and patenting is excluded. If one can be patenting, then one is not nearly basic enough. For that,
Basic research is performed without thought of practical ends. It results in general knowledge and an understanding of nature and its laws.
In STEF, basic research is distinct from industry and military research in that it is free to explore, without a pressing need for profits or bombs. That is the core of it: a belief in the interests and diligence of creative folks, seeking to understand how nature works. Interestingly, Bush did not title his report “Engineering the Endless Frontier” or “Medicine the Endless Frontier.” These areas of endeavor, too, were to be informed by studies that were more ranging. Medicine, for instance (my emphasis in all these quotes):
Discoveries pertinent to medical progress have often come from remote and unexpected sources, and it is certain that this will be true in the future. It is wholly probable that progress in the treatment of cardiovascular disease, renal disease, cancer, and similar refractory diseases will be made as the result of fundamental discoveries in subjects unrelated to those diseases, and perhaps entirely unexpected by the investigator. Further progress requires that the entire front of medicine and the underlying sciences of chemistry, physics, anatomy, biochemistry, physiology, pharmacology, bacteriology, pathology, parasitology, etc., be broadly developed.
In Bush’s idea of basic research, one does not propose to study cancer to cure cancer–but one studies what one studies, and through discussion, and teamwork, new frontiers are opened up. Bush’s vision is also not one of “interdisciplinary teams” studying cancer to cure cancer. The teamwork to cure cancer may well be interdisciplinary, but it comes about as a result of an idea about how to cure, not a well planned and competed idea about how to study better than others propose to study. Subtle point? Or is it that people just don’t care what Bush argued for, or what anyone argues for, so long as universities get lots of money for research? Or is it, perhaps, that a really important point in STEF is lost amid the rush to substitute a more gratifying, and easier to require, demonstration of teamwork?
With regard to the roles of the various institutions, Bush writes:
Discovery of new therapeutic agents and methods usually results from basic studies in medicine and the underlying sciences. The development of such materials and methods to the point at which they become available to medical practitioners requires teamwork involving the medical schools, the science departments of universities, Government and the pharmaceutical industry. Government initiative, support, and coordination can be very effective in this development phase.
The “teamwork” here is people from these different settings working together. Clearly, Bush means here by “development phase” the whole process of developing these agents so that they become available to medical practitioners (think: “the military of the war on disease”). There is no separation of roles here. No university faculty discover, deposit patents with administrators, who then knock on industry, investor, and speculator doors until someone is willing to pay for a monopoly position, which then serves to attract more investors, creating sufficient potential for product that the early investors can flip the effort to new investors, making a pile in the process, whether or not a new product is ever created–and this, sadly, is in practice the primary financial outcome–when there is one–of the linear model as practiced by universities.
Rather, in STEF, Bush presents a convergence of interests. This is just the kind of thing that happened during the war, with companies, universities, institutes, and government contributing talent to a focused purpose. Nowhere in STEF is there the idea of separate roles and some sort of hand-off. Just the opposite. What is getting handed off, or released, is talent. The university role is to release talent that has trained in basic scientific studies, especially those that go far afield:
Apart from teaching, however, the primary obligation of the medical schools and universities is to continue the traditional function of such institutions, namely, to provide the individual worker with an opportunity for free, untrammeled study of nature, in the directions and by the methods suggested by his interests, curiosity, and imagination.
In a broader context, Bush argues for freedom of inquiry:
The publicly and privately supported colleges, universities, and research institutes are the centers of basic research. They are the wellsprings of knowledge and understanding. As long as they are vigorous and healthy and their scientists are free to pursue the truth wherever it may lead, there will be a flow of new scientific knowledge to those who can apply it to practical problems in Government, in industry, or elsewhere.
That is about as close as one can get to a “linear model” in STEF: with freedom of inquiry, there will be a flow of new knowledge that will inform practical problems. There is nothing to indicate that this flow is from people studying, say, cancer, to people working to create products from that study to address cancer. In Bush, basic research opens frontiers. It is an act of disciplined imagination. The application that follows may well be skew from the work, serendipitous, unexpected, unplanned, unjustified. There is nothing to indicate that Bush conceived of government chasing basic research to applied research until investors felt they could make huge fortunes staking out monopoly positions in the last mile of improvements. There is nothing to indicate that the purpose of basic research or scientific capital was primarily to serve the development of commercial products. Commercial products–and even whole new industries–might arise, but it is not the case that innovation arises in the area of study, or based on the justifications given for an area of study.
Interestingly, it is worth noting that Bush argues for $5m in medical research, and “perhaps 20 million dollars a year can be spent effectively.” $5m in 1945 dollars is about $65m now, $20m is about $260m. For all basic research at universities, Bush adds another $10m ($130m) rising to $50m ($650m). One wonders if the scale that Bush imagines for “effective” expenditure in basic research has been overshot by a significant amount–maybe a factor of 10, or a factor of 100.
Dr. Atkinson, however, construes things differently. He argues that Bush was really trying to define separate roles for government, industry, and universities:
The federal government’s role would be to support basic science generally, not its applications. Industry would be responsible for applied research. Bush reasoned that industry had little incentive to invest heavily in basic research because its results were not proprietary and might be profitably applied by rival firms. Research universities, he decided, should be responsible for producing the pool of fundamental knowledge on which industry could draw.
Nowhere in STEF will one find Bush arguing for a need to invest “heavily” in basic research–rather he repeated expresses a concern for an effective proportion of funding. Furthermore, Bush expects both government and industry to be involved in applied research, not that the government must “invest” in it:
For science to serve as a powerful factor in our national welfare, applied research both in Government and in industry must be vigorous.
Bush goes out of his way, furthermore, to make “A Note of Warning”:
It would be folly to set up a program under which research in the natural sciences and medicine was expanded at the cost of the social sciences, humanities, and other studies so essential to national well-being.
One would think that the idea of STEM, originating with the NSF, and now so used as a rhetoric for advancing the interests of science and engineering over other areas of inquiry, would also find its anchor, and restraint, in STEF. It would appear, however, that the idea that the endless frontier is not so much science but the pot of money made available for careers in science, and the management of science.
Bush clearly does not argue that industry alone must do applied research. The problem with industry, according to Bush is not that it needs things to be proprietary but rather that
Industry is generally inhibited by preconceived goals, by its own clearly defined standards, and by the constant pressure of commercial necessity. Satisfactory progress in basic science seldom occurs under conditions prevailing in the normal industrial laboratory. There are some notable exceptions, it is true, but even in such cases it is rarely possible to match the universities in respect to the freedom which is so important to scientific discovery.
The worst of all possible interpretations of STEF would be to argue that universities, to live up to Bush’s expectations, should create institutional goals such as securing patents, implementing clearly defined processes for how to manage those patents, and to seek profit from that management–that is, to create a commercial necessity to justify activities. How like industry! How like “running like a business”! How utterly alien to what Bush envisioned.
When he gets around to it, Bush is adamant. In discussing the need for a new government agency to oversee research, Bush emphasizes the importance of the focus on research, not operations:
Operating agencies have immediate operating goals and are under constant pressure to produce in a tangible way, for that is the test of their value. None of these conditions is favorable to basic research. Research is the exploration of the unknown and is necessarily speculative. It is inhibited by conventional approaches, traditions, and standards. It cannot be satisfactorily conducted in an atmosphere where it is gauged and tested by operating or production standards. Basic scientific research should not, therefore, be placed under an operating agency whose paramount concern is anything other than research. Research will always suffer when put in competition with operations.
Again, Bush’s point applies as well to universities, when they set up to gauge their productivity based on the number of patents, or tout to the public that they have standardized the processing of inventions, or of research proposals. Research is inhibited by conventional approaches, traditions, and standards. One may argue with Bush over the point if one wants, but one cannot cite Bush in support of the institutionalization of university research and invention management any more than one can cite Bush in support of the government institutionalization of research and inventions. The aim for the university has to be research: not following policies to get the most money, not following policies to make all inventions (and anything else) run through the same process (“it’s only fair”). Or, if one goes in such a direction, be honest and admit the disagreement with Bush and the break with STEF as a founding document.
The university administrator preferred narrative is that somehow Bush advocated for the linear model. Benoît Godin in particular has argued that there is no linear model to be found in STEF:
One would be hard pressed, however, to find anything but a rudiment of this model in Bush’s manifesto. Bush talked about causal links between science (namely basic research) and socio-economic progress, but nowhere did he develop a full-length argument based on a sequential process broken down into its elements, or that suggests a mechanism whereby science translates into socioeconomic benefits. (5)
Godin argues that the linear model is “a theoretical construction of industrialists, consultants and business schools, seconded by economists” (6). It has survived as a “social fact” because it provides the framework for statistics. It also survives, I would suggest, because it flatters university administrators with the importance of their role and provides a convenient quantitative argument for more money for research. If there’s not enough innovation: then more money is needed for basic research. If there’s a lot of innovation, then more money for research will provide even a lot more of innovation. The linear model, as a narrative, just keeps on giving.
The linear model becomes a creature of econometrics trying to make sense of early reports to Congress by the NSF, which in turn was trying to make sense of what it was funding, and thus arranged research into three categories–basic, applied, and development. The addition that these categories represented steps in a process of innovation, and reflected an intention in national policy to privilege basic research over other forms as the origin not only of ideas and discoveries but as the driver for the economy is a later thing. Certainly this later thing sounds great if one is a university administrator, and if university administrators as a result believe they have a mandate to “make it so” and thus claim ownership of what they will of faculty scholarship, then these administrators necessarily also become the beloved of the investors, or speculators, who seek their profit from dealing, conveniently, with administrators rather than with potentially more demanding, globally connected creative research folks with agendas that do not necessarily include profit-seeking, or provincial advantages for local wealthy people looking to become even more wealthy by playing at patent arbitrage.
Bush furthermore does not argue for “the primacy of basic research” as Dr. Atkinson would have it–rather, he argues for the importance of basic research in “opening new frontiers.” The point is that university-trained scientists would bring their understanding to practical situations, along with others needed to form teams to address those situations. Dr. Atkinson turns Bush’s “scientific capital” into knowledge rather than talented individuals informed by knowledge.
Bayh-Dole as Proxy for Institutional Ownership of Scholarship
We now turn to the second narrative of the canonical model preferred by university administrators, that of Bayh-Dole and the role of patents. In this narrative, Bayh-Dole is misconstrued as a vesting statute that hands ownership of faculty inventions made with federal support to the university as owner and administrator. When Bayh-Dole has been shown to be no such statute, the narrative persists in the form that institutional outright ownership is such an enlightened idea that surely that was the intent of Bayh-Dole, and if the law has been thwarted by a bungling Supreme Court, then it falls to university administrators to implement the idea of vesting as best they can anyway by demanding ownership of all inventions made by faculty (and others) as a condition of, well, breathing–employment, use of facilities, any connection with anything the university is or might foreseeably take an interest in, whatever any administrator later decides the policy ought to be.
This of course is rhetoric not reasoning: it takes up instances that are made to serve the idea, rather than reasoning from the character of the instances to an idea that arises from them. In the midst of Archie Palmer’s efforts to get university administrators and faculty to consider the benefits of formal patent policies, we get Vannevar Bush, in STEF, weighing in on the matter of what patent policy the organization that will become the NSF should have. The statement is short and to the point and worth quoting in full:
Patent Policy. – The success of the National Research Foundation in promoting scientific research in this country will depend to a very large degree upon the cooperation of organizations outside the Government.
In making contracts with or grants to such organizations the Foundation should protect the public interest adequately and at the same time leave the cooperating organization with adequate freedom and incentive to conduct scientific research. The public interest will normally be adequately protected if the Government receives a royalty-free license for governmental purposes under any patents resulting from work financed by the Foundation.
There should be no obligation on the research institution to patent discoveries made as a result of support from the Foundation.
There should certainly not be any absolute requirement that all rights in such discoveries be assigned to the Government, but it should be left to the discretion of the director and the interested Division whether in special cases the public interest requires such an assignment.
Legislation on this point should leave to the Members of the Foundation discretion as to its patent policy in order that patent arrangements may be adjusted as circumstances and the public interest require.
The essentials of Bush’s view on patent policy for the NSF is that it address the freedom and incentives of supported institutions (something that will brighten administrative eyes), should involve flexibility on the part of the government, but should generally expect a non-exclusive license for government purposes. The idea is, whatever incentives an organization might have with regard to patents, the value of those patents will not be in withholding federally supported inventions from the government. Bush is blunt that there should be no obligation for universities to patent discoveries, nor that these inventions be assigned to the government.
It is into this space that the Bayh-Dole Act comes. The NSF in this matter follows the advice Bush gives and does not require assignment of inventions to the government. However, other federal agencies, not established for the purpose of funding basic research but rather to do operational things, such as the Department of Energy and the Public Health Service, had developed policies (or were subject to laws) that did require assignment of such inventions to the government. The effect of the Bayh-Dole Act was therefore two-fold, one statutory and one resulting from a claim made about the Act. As part of federal patent law, Bayh-Dole imposed the STEF style of patent policy on agencies that had adopted other approaches–at least whenever a contractor acquired ownership of a patentable invention made in federally funded work. As an opportunity, Bayh-Dole served to displace Research Corporation’s model of external agent-based invention management on behalf of faculty inventors and universities with the provincial model in which each institution uses patent positions to compete for research funding, disable industrial collaborations that other universities might enjoy, and return any financial benefits exclusively to the university that happened to host the research.
While Bayh-Dole proposes to encourage university-commercial collaborations, it does so at the expense of university-university collaborations. While faculty might share research freely with one another, university administrators do not do so with patent rights, as a matter of course. While university administrators may make a show of reserving rights in exclusive licenses for non-profit research and education, those reservations of rights are generally directed at the licensing university only, and are not made generally available to others.
In many ways, the Bayh-Dole Act can be seen as a political attack launched by insiders at the PHS against its own patent policy, in league with university administrators who sought to install their approach to invention management nationally, in preference to the use of external agents that allowed universities to focus on research, not on “commercialization.” With regard to the PHS patent policy, allowing universities to own patent rights in federally supported research, and to license those patents exclusively, circumvents the limitations on licensing to the biotech industry. University ownership and licensing of biotech inventions then stands as proxy for the PHS’s own reticence to use exclusive licenses. For industry, Bayh-Dole represents a compromise way in which to gain access to federally supported inventions–paying universities for rights is better than boycotting government supported research altogether. Resolving policy problems in the PHS, getting access to publicly supported inventions for investment returns, and beating up on Research Corporation and others positioned as a national invention management agents are not the overt premises of the Bayh-Dole Act, but it would appear it is these, and not innovation, that have driven the politics behind the Act.
As a practical matter, Bayh-Dole expands invention procurement provisions suited to basic research at universities to all sorts of federally supported operational research, limits agency flexibility with regard to its ownership interest in inventions made with federal support, and generally renounces Bush’s advice in STEF with regard to the importance of universities focusing on research, not the other stuff, by giving university administrators incentive to claim ownership of everything faculty do and represent doing so as blessed by federal policy.
Far from being a great piece of innovation-enabling legislation, Bayh-Dole is largely a blunt tool to overturn a failed PHS patent policy, get federally supported inventions into the exclusive hands of biotech companies and biotech investors, and disrupt national external invention management agents. It is not unexpected that a statute will have political goals wrapped in the language of public interest. But we find at universities that Bayh-Dole is further wrapped in the language of university administrative self-interest, and in particular the interest of patent administrators who do not want their institutions to refer patent work to external agents. The failure of university technology transfer–and it has rather failed–can be attributed to the determination to prevent faculty investigators and inventors from choosing their own invention management agents and methods of invention deployment.
To explain Bayh-Dole as a great advance in innovation management, however, Dr. Atkinson has to propose that the Bush system that a few paragraphs earlier was so fundamental was not actually working. What was missing, a technology transfer mechanism rooted in institutional control rather than in instruction, publication, and placement of trained individuals in positions of responsibility. The problem Dr. Atkinson has with STEF, apparently, is not that basic research is not being funded, but that the discoveries of basic research were not making it into industry by means of paying licenses. This, for Bush, would have been a problem of instruction, publication, lifting of secrecy, and providing access to small companies not usually served by research interests, such as through “research clinics.” For Dr. Atkinson, however, what is missing is a problem of patent ownership and administrative self-interest. If only universities owned patents, and not inventors, or the government, or no-one, then innovation that drives the economy would come about, because administrators would be hungry for profits from patents and therefore will pursue paying licenses with more vigor than the indifferent, gullible, selfish, inept folks doing the research and the inventing.
There is no indication I can find that the government-supported university research of the 1960s and 70s was not working. It is the 1960s and 70s that produced US manned space flight, the internet, semiconductors, and gene splicing. Bayh-Dole does not come about as a result of government failure, but of apparent university success, as David Mowery and others have documented. The rhetoric used to get Bayh-Dole passed, of course, is a different matter: that rhetoric involved a goofy argument about uncommercialized government owned patents (many in weapon systems, many waived by the contractors that produced them); a claim that patents were necessary for commercial investment (Microsoft and Facebook notwithstanding); and that lacking monopoly positions, the private sector would not build products, wasting government support for university research (ignoring industry standards and the patents that comprise them). There is little to substantiate any of these claims. Indeed, I have not yet found any inquiry into the claims made in support of Bayh-Dole that provides support for these claims: the claims are simply cited as fact–they were presented as support for passage of the law, and therefore they must be true. The claims make a rhetorical, not a reasoned, case. That is to be expected. What is unexpected, however, is that people would then be foolish enough to believe their own rhetoric rather than observe practice.
Here is how Dr. Atkinson puts the case:
Before the 1980 legislation, the federal government owned the rights to any patentable discovery coming out of research supported with federal funds.
With all due respect to a former director of the NSF, this just isn’t true, and certainly was never true for the NSF itself. The government for decades prior to Bayh-Dole had a policy of “flexibility” on such ownership. Some agencies, such as DoD and NSF, allowed inventors and their contractors or inventors to own inventions. Others, such as the PHS and DOE, required in their contracts assignment of inventions. The PHS, however, also allowed universities to enter into patent management agreements–the Institutional Patent Agreemen program, begun in the early 1950s–under which inventions on a case-by-case basis could be retained by a university contractor or assignee. The means by which ownership was managed was not law, but rather the terms of funding agreements and arrangements ancillary to those funding agreements. Universities agreed to those terms in forming research arrangements with the government.
A better statement would be:
Prior to Bayh-Dole, the federal government in funding agreements for research conducted at universities could require the assignment of inventions to the government. Some agencies did so, and others did not. Even for those agencies that did require assignment, in some cases, assignees of inventions could negotiate to retain ownership, subject to agency conditions and approval.
One reason an agency might not be so fond of a provincial invention licensing organization like WARF is that WARF was the subject of multiple federal anti-trust lawsuits (here, here, for vitamin D story here) brought by the government over its practices. Indeed, one of these suits resulted in the dedication to the public domain of the anchor patent WARF held on producing vitamin D.
Funding agreements with universities were made on the initiative of faculty proposing the work. The agencies did not negotiate with university administrators over the idea of a project, award the money, and then expect the administrators to assign faculty to do the work. The flow of initiative went the other way. Faculty took the deal because the patent provisions were consistent with their purposes, even if those purposes were not aligned with university administrators seeking to make money and political hay from patenting.
Dr. Atkinson continues:
Bayh-Dole transferred government’s patent rights to universities, leaving it to each institution whether income derived from a patented invention went to individual researchers or the university, or was shared by both.
Regrettably, this statement is incorrect in multiple ways, but it is spot on to the misconstructed narrative preferred by administrators. Bayh-Dole did not transfer government patent rights to universities, as the government did not own patent rights to transfer. Bayh-Dole furthermore did not transfer rights to universities. What Bayh-Dole did was establish protocols under which federal agencies could contract for patent rights in the context of supporting research at universities, nonprofits, and small companies. As for the sharing of any income, here’s 35 USC 202(c)(7)(B):
a requirement that the contractor share royalties with the inventor;
It’s not clear how Dr. Atkinson could be so far afield on Bayh-Dole. Perhaps it is that institutional control of inventions is central to his vision of how universities drive the economy: if patent licensing is the driver of the economy, then how can the university be the driver if it does not own all faculty inventions? If faculty attempt to drive the economy by teaching and publication, then does not that weaken the university’s effort–er, role–to be the driver? If external agents do the licensing, then wouldn’t it be the external agents that would drive the economy, and wouldn’t that also weaken the university’s administrative role–er, aspiration–to be the driver? Worse if there are no patents, or few patents, and the economy is still driven by university basic research–for then the whole argument falls apart and administrators aren’t the spark plugs of economic combustion, but perhaps are more like radiators, keeping everything within the proper operating temperature, despite the economic weather.
One might come to believe, then, that university IP policies are designed to position university administrators as drivers of the economy, despite the apparent overwhelming evidence that they are not, and that licensing from universities, especially of the speculative, exclusive form, is perhaps a net drag on innovation. One would not think any such thought, however, reading “Science and the Entrepreneurial University.”
The Bayh-Dole Act applies generally to federal agencies, not to universities. It aims to reduce agency overhead in dealing with inventions made with federal support at universities and small companies; it purports to make “uniform” invention procurement practices and standardizes on a government license when a patent is taken out on an invention made with federal support. Bayh-Dole authorizes a standard patent rights clause for use agency use in funding agreements. That patent rights clause deals with potential interest in inventions by inventors, by universities, by assignees of invention rights, and by the government. The required role for university administrators in the patent rights clause is, for each invention that a university acquires, to disclose the invention to the federal government, to give notice if electing to retain rights in those inventions, instruct research personnel in the importance of timely disclosure of inventions, designate personnel responsible for patent matters, flow down the patent rights clause in subcontracts, and require research personnel to make a written agreement to protect the government’s interest, including establishing the government’s rights in inventions.
That’s pretty straightforward stuff, and does not involve demanding ownership of faculty scholarship, filing of patent applications, or commercialization of inventions through royalty-bearing licenses that demand product development. Such behaviors have nothing to do with the core of Bayh-Dole, or the STEF premise that basic research may inform all fields of endeavor in unexpectable ways. Perhaps the great failing of Bayh-Dole is that it permits university administrators to make demands of faculty and others with regard to ownership of inventions, patenting, and the use of patents. That is, Bayh-Dole had the potential to bring more federally supported inventions within the diverse approaches by which university personnel pursued dissemination and development of their work. But it was turned, almost immediately, into a statute that enfranchised university administrators as the controllers of faculty work. The claim was that to comply with the law, the university had to own–or got the first right to own, or the first right of refusal–in short, the claim was that federal policy made the university administration the instrument of invention control, and mandated that this control was to be in the service of institutional self-interest. The result is an odd kind of institutional invisible hand–that public institutions in seeking first their own financial self-interest, and all but renouncing their public missions, will create the greatest public good, as if by magic.
The Potential for Success as Proxy for Impact
After discussing a selection of theories about economic growth that feature innovation and thus by proxy research, “Science and the Entrepreneurial University” moves to the matter of economic impact. Here, Dr. Atkinson turns to royalty income:
Most patent income flows from a few hugely successful discoveries, such as the basic technique for DNA recombination
This is a reference to the Cohen-Boyer patents, which were prior to Bayh-Dole, were assigned voluntarily, licensed non-exclusively and with the prior approval of industry, and as a success argue rather against the premise that Bayh-Dole compels university ownership of inventions. Here, however, the licensing is used as a proxy for administrative control. In the flow of history, this is like thinking the Sound of Music is about soldiers, because in one scene, there are some.
After describing UCSD Connect, a really interesting program that brought faculty, entrepreneurs, and industry-types together in San Diego, Dr. Atkinson aims to segue to the concept of the “entrepreneurial” university. He does not mean supporting entrepreneurially minded faculty, staff, and students. Rather, he means that programs like Connect, which support access and entrepreneurial stuff point to “new demands” that require
more, and more interdisciplinary, research, conducted with industrial partners to help to translate basic science into new products, processes, and startup companies.
This is a very strange twist on the argument that universities were to do basic research and industry was to do applied research. Not that Vannevar Bush argued for that, but Dr. Atkinson did. Apparently the idea that Dr. Atkinson is reaching for is one in which universities are to become engines of product development, by doing more research but now with companies, in the pursuit of profits. Put it together: universities are to do basic research, own patents, and benefit when companies sell licensed products. To make this happen, since it really isn’t much happening, university administrators have to become more “entrepreneurial”–that is, create relationships in which companies do the development with university subsidies. This, rather than, say, relaxing the claim on inventions, or making access to inventions (and patent rights) broadly available.
In a selective university invention management shop, one might deal with 25 inventions per year, not 200 to 300. One might spend $200K to $300K on patenting, and another $500K on salaries and everything else, for a total budget under $1m a year. For any given patent, then perhaps all that’s needed for breakeven is $30K total income, on average. That’s like 6 companies paying a fee of $5K each for a non-exclusive, paid-up license, or $5K to attend a workshop on the invention, and walk away with a free, paid-up license. The potential, then, is whether six companies over 20 years will give a rat’s ass about the university patent. This does not have to be an expensive program and can readily break even. It’s just that this is not what “entrepreneurial” means in this context.
Dr. Atkinson turns to the four California Institutes for Science and Innovation, which the State of California financed for $400m. Dr. Atkinson describes them thus:
The California Institutes for Science and Innovation conduct fundamental and applied research across many disciplines to achieve the scientific breakthroughs and new technologies that will drive the state’s economy and improve its society.
Note the intrusion of applied research into the research program of the university. The state stipulated that the institutes would match the state contribution with 2x in private money, but as Dr. Atkinson implicitly acknowledges, the matching hasn’t actually materialized and the state provides $4.75m a year and the university, from sources unknown–perhaps tuition–provides $5.25m more per year.The University of California Office of the President describes these institutes this way:
Taken together, these four institutes represent a billion-dollar, multidisciplinary effort that focuses public/private resources and expertise simultaneously on research areas critical to sustaining California’s economic growth and its competitiveness in the global marketplace.
Serving as a catalyst for the California economy when needed most
These are all nice aspirations, stated as fact. Yet the University of California, after 12 years, reports next to nothing to indicate that these institutes are are actually “sustaining California’s economic growth” or “serving as a catalyst for the California economy.” Apparently, one attribute of the “entrepreneurial” university is self-promotion, other is speaking in mottos, and a third is an indifference to documenting what is actually taking place with the money and policies that implement the institutes.
I was for six years in a position to observe the Cal ISIs, and indeed, I was responsible at one campus for dealing with the “technology transfer” for two of these institutes. It’s just that the institutes themselves did not particularly share in the idea of institutional support: there was no tracking of breakthrough science, no list of the top journal articles prepared by institute staff, and no invention disclosures, for that matter. Technology transfer was done in the most conventional of ways: publication, conferences, walking out the door with stuff. It’s not that this is necessarily bad–but it was actually the way things were done. The university itself was not any more “entrepreneurial” for its subsidies to the Cal ISIs. There was little indication that institutes were any bit more given to breakthroughs than any other research in the University of California. Indeed, it appeared that their claim to breakthroughs came primarily from counting as CISI “faculty” anyone who got a grant in an area claimed as special by a Cal ISI. The entrepreneurial bit was simply to make sure that anyone who did anything also could be claimed by the Cal ISI. Entrepreneurial institutional credit-taking aggregation.
When it comes to breakthrough science or new products or companies, you won’t find it mentioned or linked on the home pages of the Cal ISI web sites: CalIT2, CITRIS, QB3, and CNSI. No links to reports showing a return on investment. No links to reports assessing economic impact. Two of the institutes operate startup incubators, and have company clients, but there’s nothing to indicate that any of the work in the company has been the result of advances in basic research, nor directly of anything remotely approaching the effort that Vannevar Bush imagined as teamwork among universities, industry, and government to make their talented personnel available to make breakthroughs, nor that the institute research is particularly tuned to anything of concern to California citizens’ benefit. It is rather more like Laputa in Book 3 of Gulliver’s Travels, except operating with much better and more expensive laboratory facilities.
The institutes function administratively to make it appear that they have vast resources and talent at their disposal (as the list of honors and awards at CNSI, running to 3 pages, illustrates). The rhetoric is all about the “visionary investment in future education, research and technological resources” and nothing much at all about innovation, impact, benefit to the people of the state. The institutes appear to exist to compete for federal grants and to flatter policy-makers.
There are any number of such research university high profile “investments” aimed at starting companies and making claims for economic impact. Some of these companies are indeed successful, but not nearly so many as are claimed. A great many such companies exist only as a web site, a shell corporation, a standing request for funding, and a big star for credit at a university technology transfer office. At the University of Utah, which made a lot out of promoting its startup activities, after five years and a hundred or so companies, fewer than five appear to have raised a round of funding worth reporting in the investment databases, and only a few more obtained SBIR funding. Nice, but nothing to crow about. The reality is that these startups are not the way that basic science contributes to the economy. The breakthroughs of science don’t generally thrive when owned by administrators and sequestered in startup companies seeking investors.
At the von Liebig Center at UCSD, which started with a $10m gift that was burned through in five years, there’s a list of 37 companies “supported” in twelve years–3 companies a year. Of these, three have been acquired, seven are no longer “active” and a number of the rest are, well, a web site and a hope. It’s not that helping companies isn’t a good thing. I am sure it is. But there’s nothing to indicate what the “support” has been, other than that there is often a license from UCSD. There is nothing to indicate what the economic impact of these startups has been, what the breakthrough from basic research has been, and what the benefit to Californians is. Financially, there is no report of the cost of the “support” relative to the “return” to UCSD for operating the Center.
The administrative idea behind the “entrepreneurial university” appears, at least for public research universities, to be that of introducing administrative claims to creative work, diverting state money to facilities and administration, and taking credit for any activity that looks like it might have “commercial value.” The University of Utah used this approach to attract $93m of state money for research to innovation, which resulted after five years in plenty of construction, but only four companies with 13 employees. At the University of Washington, over $100m of state and federal money has been diverted over five years to a office dedicated to creating companies, while holding all other IP under university ownership claims. The center now promotes the idea that it will start 20 companies over three years, but it declines to point out that it has started only about 3 companies in the past year, and that in the three years before the university reorganized its tech transfer program to be run by such speculative investors, it had started 30 companies in three years. In other words, the “entrepreneurial” university appears to be one that effectively captures a larger share of public money, and diverts this money to subsidize the investment interests of speculative investors. While this might be construed as “taking risks” it could just as easily be seen as a self-promoting show without much of anything to indicate the creation of new products, generation of income, or public impact, whether for the state, or the country.
There is no question that there are good companies forming around university discoveries, and around the talents of faculty, staff, and students at research universities. It is not at all clear, however, that these companies are at all advanced by university ownership claims to inventions, or by administrative programs that aim to produce startup companies like mushrooms after the rain. Certainly, there is nothing to indicate that the three-stranded narrative in “Science and the Entrepreneurial University” has, after thirty years of Bayh-Dole, demonstrated the effectiveness of a linear model of innovation founded on compulsory institutional ownership of creative work.