TLO Summits, Cheap Talk, and Sacrifices

James Mawson has a thoughtful account of a recent meeting at UCSF to discuss how university technology transfer offices could better deal with current conditions for research, licensing, and money.   A description of a meeting isn’t, of course, the meeting itself, so it is difficult to get a sense of what was going on.  From the description, folks attending appear confused by their own rhetoric, and perhaps even by the concepts that they bring to their work.  Consider this bit of Mawson’s account:

The TTOs wanted to use corporations to commercialise their inventions but also provide money and personnel to translate basic research into work to help society. As one panelist said: “We see tech transfer as finding the public benefit, not about the money.”

The “TTOs” frame the discussion in terms of “commercialization”–that is, the creation of salable products from academic inventions.  They don’t think about much about creating better conditions for collaboration or independent innovation.  For that, “commercialization” would not be something that a university administration would focus on.  The “processes” of commercialization of stuff into product form is one thing.  The insistence that university patent positions be used to push these processes into licensing relationships fueled by speculative investment is another.  In the same sentence, though, we are told that TTOs also want money for more research “to help society.”  One has to work at it to come up with how commecialization and helping society are connected in this line of discussion.  The idea of “helping society,” for all its niceness, is an institutional truism, a rhetorical aspiration.  The University of California makes it clear that doing something “for a higher purpose” is unethical.  Helping socieity is something posited for later, when the university has made money from licensing its patent positions.  It is a general catch-all descriptor:  We do X “to help society” where X can be any darned thing one wants.  What activity undertaken by a university isn’t wrapped in such an intention?

More difficult, how does anyone make sense of the abstraction of a “university” helping the abstraction “society”?  Where are the humans?  Do we want to “help society” with skin in the game? without skin in the game? or with “soul in the game” as Nicholas Taleb frames the question in  note 147 of his notebook.  Is “helping society” for all its apparent importance, just so much “cheap talk”?

This attitude is perhaps fortunate as many universities have seen little direct financial benefit from the technologies spun out.

If there has not been much direct financial benefit it is not through lack of trying, but the effort has focused, for more than two decades, on trying to make money through exclusive licensing on compulsory claims to own faculty scholarship.  When the big companies in biotech grew weary of it, the TLOs turned to startups.  When the venture investors grew weary, the TLOs turned to state governments.  Now that the state governments are getting wary, at least, the TLOs are on to litigation.  In all of this, the “technology transfer” folks have not generally favored voluntary assignment, royalty-free licenses, referral of opportunity, or dedicating funds received to the use of helping folks outside the university, any of which might indicate an interest in “helping society” by actually helping rather than hoping that the distant secondary outcomes of trying to make windfall profits from monopoly positions would be perceived as “helping,” as if some unseen “hand” will make everything turn out fine.

At the University of Washington, we have seen this same kind of rhetorical conflation between an operating model focused on making money from patent positions in the quickest, dirtiest way possible tied to an appeal that no one please judge the performance of the office based on the money it brings in–heavens no–all that $100m over the past five years in patenting, litigation, hiring, database programming, and space renovation was to “help society.”   Consider this paragraph from the official “Strategic Plan” for the UW licensing office, from December 2010 (with bold added):

Technology transfers offices traditionally focus on less resource-intensive, less economically risky licensing of technology to (often large, and out-of-state) existing companies. C4C focuses resources on attempting to increase the number of companies spinning-out of UW around UW innovations/IP. We see start-ups as having a greater potential for creating revenue, good will, and reputational gain UW and WA. They can generate licensing revenue – if acquired, nearer term than do royalties (UW receives equity as a condition of license), create jobs, enhance UW’s reputation (think of the benefit to Stanford of being known to have launched Google), and generate many other benefits to UW –which is why we encourage C4C results to be analyzed from a “total contribution” perspective. C4C’s contribution includes gifts to UW by successful faculty founders or investors, and increased sponsorship of research – by industry or UW start-ups, and increased political support resulting from UW generating jobs that stay in WA. We see these benefit s coming from “lifestyle” businesses as well as venture capital backed start-ups with the potential to change the world.

Put aside the random, unsupportable assertions about TLOs, startups, and the effects of university ownership positions.  By pursuing startups, because by flipping them to a new set of investors will make more money faster, the university can improve its reputation (er, have a “reputational gain”), and at the same time, gosh, “change the world.”  The premise of making a lot of money is butted up against the plea for a “‘total contribution’ perspective.”  That is, the licensing operation wants to claim the donations made by folks they have helped to make rich. Of course, in five years they have yet to make anyone rich, or make much money at all.

Recently, University of Washington’s President held a self-congratulatory press conference to announce the formation of 17 startups in the fiscal year ending June 30.  It’s just that there weren’t 17 startups formed in the fiscal year, but apparently only 4, two of which appear to be just re-packaging of years-old administrative software packages.  Of the rest, some weren’t companies at all, and others were formed in years from 2006 to 2012, and of these, some were based on inventions from other universities, not UW.  Not only was this not a “record” year for startups, but UW is now starting half the number of companies than it did in 2006-08, but doing so with twice the budget!  This is not the first bogus announcement from the University of Washington’s technology licensing group.  The aim is to get state funds diverted to the University so it can have more “successes” like this (“increased political support”).  Is it desperation?  Or just deliberately deceptive?

At best, this sort of thing is a very confused, ham-handed set of gestures, but it is remarkably consistent with Mawson’s description of the UCSF summit.  Mawson finishes his paragraph with:

This has led some to look to alternative ways to reap rewards, with some relying on philanthropy and others giving their follow-on rights to later rounds of funding for spin-out companies to outside venture capital firms to potentially take up and avoid the stakes being diluted down.

Seeking to reap institutional rewards is, only in twisted mental workups, the surest way to “help society.” Mawson finishes with a teaser for his next editorial:

And this is the second elephant – which customer is to be served: the principal investigator, university, the economy or the public that might benefit from an invention?

The question, of course, is already in strange territory, which makes Mawson’s continuation all the more intriguing.   Principal investigators do not get served at all in American university “technology transfer”–university IP policies uniformly ignore principal investigators and focus on inventors.  But even there, the policy focus is not on the inventor as “customer” at all.  “Customers” have choices.  University inventors now have no choice:  they are required to assign their inventions (often scoped much more broadly than inventions that are or may be patentable) to the university, and at public universities they may also be excluded from “participating in transactions involving the state” such as licensing, since doing so would be a “conflict of interest” or “unethical.”  Of course, university administrators can then pursue speculative dealings with patent rights in those inventions and that’s called “helping society” by seeking profits and misrepresenting results, and that’s not “unethical” at all, apparently.  It is all more “cheap talk” of the bozonet to call university investigators “customers.”

That’s not all.  If we want a list of “customers” or “stakeholders” or “those affected or afflicted by institutionalized patent dealings” we could extend the list:

  • Creatives–those producing work, not limited to “inventors” but also students, staff
  • Projects–associations of creatives, led by “principal investigators” when sponsored
  • Institutions–universities and their administrators, faculty, students, staff, alumni
  • Sponsors–including donors, foundations, and companies
  • Beneficiaries–those that creatives or sponsors indicate should benefit from their work
  • Public generally–helped by the unseen hand, usually
  • Industry–another abstraction, but perhaps reflected in platforms and standards
  • Academe–the general independent effort to study and teach
  • Entrepreneurs–the folks aiming to start businesses
  • Investors and speculators–folks trying to make money from the efforts of others
  • Economy–a dismal abstraction for consumption and trade by everyone
  • Government–city, state, federal, elected and appointed, to make central plans work

The cockroaches in the room, though, are the TLOs.  No offense.  Elephant isn’t much better.  “Who do we serve?” is a fundamental question that goes well beyond Soylent Green.   One has to come to grips with this question.  However, the TLO that asks “who do we serve?” must already expect that their own first answer is “ourselves, our careers, our survival.”  “Who do we serve?” is readily translated as “Who butters our toast?” or “Who should we say we serve to get more of our toast buttered?”  One can pick out the patterns of emphasis in current TLO operating practices:  the university administration first (which gives us our jobs by requiring assignment of ownership of inventions and often much more and loves flattery); investors and speculators next (as the current moneybags of hope); governments third (who provide money year after year, and never ask to see the raw data and practice presented candidly, so TLOs can be “cavalier” about their data, to use David Mowery’s term).  Sponsors come fourth, because contracts trump policy (but not to the point of displacing reservation of rights for speculators).  Inventors are fifth, among creatives, but the TLO purpose is to separate inventors from the rest of the rabble, and that can be as damaging as anything to projects and to other creatives.  After this, one enters the realm of rhetorical abstractions and aspirations for the work of the unseen hand.

This is not the pecking order for all university TLOs, but it is the general shape of the rhetoric.  There are TLOs that aim to do things differently, but they experience an amazing amount of blow-back from the dominant TLO model.   If you aren’t chasing the bottom line, sucking up to anyone with lots of money, well, you just are not doing a good enough job to “help society.”  As a result, some of the top TLO programs in the country that do have a public mission at heart are disparaged in favor of such things as the UCLA Newco adventure, in which the great innovation is, rather than to chase wealthy folks, to let them run the shop on the hope that other wealthy folks will be drawn in to spill their money on university patents to have fun with friends in betting on what might turn out to be valuable.

I hope James Mawson sorts out the handwaving TLO rhetoric, the “cheap talk” from the grounded programs that are working for beneficiaries of research, giving the investigators choices, and taking risk for the sake of others–for other programs and other people.  Yes, it’s good to survive, too, and have a career, but it is also time to push back on the “bottom line” TLOs and their boosters, who have single-mindedly destroyed much of what was good and working in university research innovation to capture more of the “value” for themselves.  Now, unable to show that there is an “unseen hand” that helps everyone else when they pursue their institutional self-interest, they are left in confused discussions about how to reposition their efforts to be able to take credit for something, anything.

The American “cheap talk” about university patent licensing has pretty much failed American research innovation.  The failure is not particularly evident from a distance because the results have been, overall, so mediocre–not much great, not much horrible.  A number of informed authors (here and here and here) have warned developing countries not to follow the same path, and to take precautions.  It will be interesting to see what the participants of the TLO summit have decided as their way forward and what Global University Venturing thinks of their view of things.




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