Working through an old op/ed on university ownership of inventions

I was out browsing the web and came across an op/ed from 2011 published in the Baylor University magazine Lariat. The anonymous author was opining about the Stanford v Roche case and the title makes clear the position: “Patents should belong to universities, not professors.” The proposition itself involves a number of implied claims–that inventions made by faculty should be owned at all, and if owned, should be owned by universities rather than by a sponsor of research or a trustee acting on behalf of the public; that university administrators should control faculty work, rather than, say, the faculty member who proposes the work and decides to do the work at the university; that patents should be used to create private monopolies rather than to encourage public use and industry competition.

The op/ed comes with a campy, sexist cartoon showing a greedy, bald-headed man (I think) labeled “corporation” grabbing at the arm of a distraught faculty member (apparently female, labeled “professor”) clutching something urn-like (labeled “invention” but perhaps containing the ashes of a good idea) while a concerned university administrator (male, I think) touches her other shoulder as if offering an escape from the corporate evil that might come next.


This is as good as it gets with propaganda for universities taking ownership of faculty scholarship. The fascinating thing is that if a company actually wants an invention in order to develop it, that relationship is way, way more worth exploring than one in which a university inserts itself between the inventors and the company. When Bayh-Dole was being debated in Congress, senators could not understand why university administrators should get involved. Why not just push patents in federally supported research directly to companies? Wouldn’t that be more efficient? The university patent brokers admitted it would be, but that would never pass Congress. The university patent brokers offered a work-around to get patents to industry–after extracting their own financial interest in the deal. There must be a “buffer,” they argued, patent middlemen that got between inventors and companies, between inventors and the government, between inventors and public use.

There is nothing wrong with the idea of brokers. We encounter brokers and dealers, shop keepers, and facilitators of all sorts. That’s not the problem. Even middlemen can play a role. Stage managers are as important to a play’s performance as the acting talent. The problem is with forcing universities to play the role of buffer, of broker, rather than to play the role of advisor or trustee. And worse, to make that broker self-interested–so that the financial interest of the university far exceeds that of any investigators or inventors.

The op/ed provides a selective retelling of the Stanford v Roche case, conveniently omitting the details that would show that Stanford had no legitimate claim, not under its own policy, not arising from its own actions, not arising from Bayh-Dole. But such details don’t fit the claim of the op/ed, so why would facts be allowed to get in the way? The most telling of the omissions, the glaring thing beyond all hope of reconciling with reason, is that Roche developed and marketed a product to evaluate the effectiveness of AIDS interventions–just what Stanford claimed in its patents.

Stanford filed the patent under the Bayh-Dole Act, which was developed to encourage technology transfer – a form of knowledge transfer – that would allow wider distribution and faster development of important scientific findings in order to benefit the greater public.

Stanford had sent the post-doc to the company to learn how to use PCR–for nine months. Stanford faculty served on the company’s technical advisory board. Stanford’s own policy said that inventors would own their inventions “whenever possible”–that is, whenever a research agreement didn’t require otherwise. The post-doc agreed that any invention arising from his access to the company’s technology would be the company’s. The post-doc’s work at the company was entirely consistent with Stanford’s policy and Stanford had no expectation to claim to own any invention made by the post-doc. The critical point was that Bayh-Dole did not give Stanford any obligation to take ownership of inventions made with federal funds. So Stanford’s own policy also could not operate to require the post-doc to assign his share of any invention to Stanford. He could do so voluntarily–but he had already voluntarily assigned to the company.

But don’t get wrapped up in the details, such as they are, devil and all. The big picture: By the time Stanford came calling, Roche already was selling commercial product, covered by claims of a patent on an invention. Roche did not need exclusivity to do so. And Stanford had done nothing itself to develop the invention it claimed. All it could do was sue for money!

Now read the next sentence of the op/ed piece:

In 2000, Stanford began asking Roche Molecular Systems Inc. to pay the university for a license since the pharmaceutical company was selling medical kits that test the effectiveness of anti-HIV therapy, which Stanford claimed was a patent infringement on Holodniy’s invention.

If Bayh-Dole was to “allow wider distribution and faster development,” then what business did Stanford have with its patent rights? Even if the invention had been a subject invention, then how was Stanford’s assertion of infringement in any way furthering the Congressional policy and objective “to use the patent system to promote the utilization” of subject inventions? No, just the opposite. Stanford’s use of its patent was to disrupt such use, to attempt to extract a quarter billion dollars from Roche’s product–to drive up the price of the product or cut into Roche’s profits.

If Roche had valued a monopoly on the invention, then perhaps a quarter billion dollars was about right. But Roche didn’t want the monopoly. Roche rejected Stanford’s assertion of the conventional model–that only monopolies will induce companies to invest in the development of commercial products based on subject inventions. What freakin’ nonsense.

The op/ed ignores the irrationality and continues:

A university-controlled patent would allow the public to benefit faster from the invention through technology transfer, as the university would be able to partner with companies to further develop the new invention for the marketplace.

Except in this case, a university-controlled patent does nothing of the sort. It just gets in the way of public benefit. Stanford was free to license anyone else under the rights it obtained from other joint-inventors. Why hadn’t it done so? Stanford’s failure to license its patents to Roche’s competitors worked every bit as much to provide Roche with an effective monopoly on its product.

More strangeness follows:

But as the creator, it would seem natural that the faculty researcher should retain the rights to his creation in order to determine where his research is to be used and to what ends. In both situations, the researcher would receive federal funding and at least a portion of the invention’s royalties, which leaves technology transfer as the determining issue.

This is not a matter of seeming. We are talking federal patent law, derived from Constitutional authority–inventors have an exclusive right for limited times in their inventions. Anything that varies from this is a matter of an inventor’s choice–to assign or license, or not to seek an ownership position at all and publish to the public domain. If an inventor takes employment, and a condition of that employment is assignment of inventions to the employer, then that agreement comes into play–what is the scope that an employer can claim in inventions made by an employee? What did the employee and employer agree upon? If an inventor takes money to sponsor research, a similar question arises. What are the terms of that research agreement? What is the scope of work? What interest can a sponsor of the research claim in anything invented outside the scope of that work? What have the inventor and sponsor agreed to?

There is nothing natural here, other than the freedom to contract and careful attention to what those contracts provide and what they don’t.

The op/ed ends with a curious non-sequitur. After citing a definition of “technology transfer” to be the transfer of “knowledge, skills, processes, or technologies across different organizations,” the op/ed argues that such transfer must necessarily be between universities and companies.  There could not possibly be transfer between universities and other universities. Or between universities and nonprofits or government labs or to individuals. The very definition ignores the idea that individuals might be able to explain what they have invented–publish, teach, demonstrate, explain. And while the generic inventor might not be articulate or interested, university faculty are selected in great part precisely because they are articulate and interested in publication and other forms of discourse regarding their work. But:

This transfer between universities and corporations offers an opportunity to further develop and expand the invention, a growth that would be nearly impossible for the individual researcher who would not normally have a wide reach to other companies and universities.

This is more nonsense. While transfer of technology might create opportunities for others to contribute to the technology (the “growth” argument), there’s nothing to indicate that patents are necessary to the purpose, or that a monopoly position is the only, best, or first way to manage such transfer. One may well do best by creating a commons and delaying monopoly formation–precisely to encourage use and development of a platform, with contributions from a number of sources. Certainly such “growth” is not “nearly impossible” for anyone. Witness the internet.

And university faculty easily may have a “wide reach” to companies and almost always have a “wide reach” to their colleagues in other universities. Any conference gives them such a reach. Any publication. Any exchange of graduate students. What the op/ed is actually writing about is “it would be nearly impossible for any individual researcher to contact a huge list of companies to offer them to bid on an exclusive license to patent right.” And we might add–it would also be nearly stupid for anyone to do so if their goal was to encourage faster development in the public interest.

When we got our patent portfolio released from the central University of California office for our management at the campus level (that took over a year), we found correspondence where the UC licensing office had sent out letters announcing a new invention available for patent licensing. One big company, an erstwhile supporter of UC research and programs, wrote back, begging UC not to contact it in such a way. And the next month, there was more correspondence from UC to the same company, doing the same thing for another patent. Talk about ticking off your key business partners. We might say it would be “nearly impossible” for any individual in their normal mind to do such a thing to his or her key business partners. But what is impossible for individuals is often easily done by bureaucrats who are told to follow a process, even when that process deviates from common sense or good business practices.

And of course, even if it were the case that an individual inventor ought to use a broker to set up an interaction over the transfer of knowledge regarding an invention–or even transfer of patent rights in that invention, there’s nothing that indicates that the best, only, or first middleman ought to be the university at which the inventor happens to work. Why not a broker already connected with the industry one wants to work with? Why not an attorney with experience negotiating deals of the sort that the inventor seeks? Why not the sponsor of the research that led to the invention (in the case, at least, of federally supported inventions)–especially if the goal is to have broad public access to the invention–including access by the inventor should she (or he) leave the university. Won’t get that with university ownership–at least not if university administrators insist on granting exclusive licenses. Even if one could make the general argument that brokers are useful, or even essential, to patent licensing, are they all that helpful for knowledge transfer? And if a broker it must be, why should that broker by a university patent licensing office? And if so, why the office that happens to be by accident at the university where one happens to do research?

What does the university seek other than a majority financial stake in each invention? And to grab that money share, university administrators are willing to preclude all sorts of other arrangements regarding research inventions, just to get as much as they can from the licensing of those few inventions that survive the imposition of their claims to management.

But these arguments are nothing in the face of steadfast administrative belief:

Therefore, we believe the university should file and earn the patent for all federally funded faculty research so that the inventions and creations developed from the research may be made fully ready and accessible to the public.

It is almost too much. Here we have the trappings of a logical conclusion (“therefore”) ending with a statement of belief that has nothing to do with the logic (such as it is) that precedes it. There is no logical (or rational, or evidentiary) connection between assertion of patent positions and making inventions accessible to the public (set aside the “and creations” and “fully ready”). Inventions become accessible to the public by publication or teaching or demonstration. Patents need play no role in such efforts.

What this conclusion does state–I am sure–is an administrative truth: that university administrators are committed to taking ownership of everything they can get, and using whatever they get to try to make as much money as they can. It’s just that the very acts of taking and trying to profit run counter to public accessibility and development. It would be more direct for the op/ed to assert “We believe that our administrative jobs depend on stripping inventors of their choices and offering monopoly positions to whomever shows up with money. We mitigate criticism of our scheme by holding out the prospect for huge payoffs, claiming that we act in the public interest, and–although it is rare–by sharing a portion of our gains with inventors (but not with their colleagues, even in the same research team).”

While we also believe the researcher should retain a portion of the invention’s revenue as well as maintain the name of inventor, his invention would be made better through technology transfer and be able to more swiftly impact the future of society.

This belief is beyond kind thought. First, what at all does university administrative belief have to do with “maintaining the name of inventor”? Is there some administrative idea that inventors should not be identified with patents on their inventions? That’s news to federal patent law. Is it that when the university takes ownership of inventions (and “earns” patents), administrators don’t feel any obligation to identify the inventors, but in response to appeals such as this one, they will come around to keeping inventors’ names attached to reports of inventions? This is all nonsense.

Next, look at the word “retain.” If we really wanted to use “retain” in this context, we would help inventors do their deals with companies (or whomever) and as a second step would consider the “equities” involved in the university’s support of the work to make and develop the invention. The claim would be to a financial interest in the invention arising from the actual circumstances of invention and development. If the university contributed in some material way–through authorizations or the work of others employed at the university–then some of whatever money there might be from the “transfer” of an invention might be shared with the university (and others), with the rest “retained” by the inventor. This process was one widely used before Bayh-Dole with its darkness spread over the land. University administrators (and faculty) argued that where it was equitable to share income from commercial ventures involving patents, income should be shared equitably. That proposition is difficult to muster an argument against.

But that’s not the argument that the op/ed presents. Instead, it uses “retain” in a mealy-mouthed way–having taken ownership of an inventor’s personal property, and without any consideration for circumstances other than the presence of “federal funding,” university administrators should take ownership of all inventions. Not inventions for which their assistance is requested. Not just those inventions that an investigator believes should be advanced using a patent. All inventions. And all “creations,” too. Everything gets gobbled up. Everything falls under the dominion of administrators.

I’m sure that this op/ed states a widespread belief held by university administrators. They, not inventors nor anyone chosen by inventors, should decide how the results of scholarship should be dealt with, and their preference is to create monopolies (based on patents when possible) and offer those monopolies to speculators, hoping for a big payout. This operating model is successful with only 1 deal a decade, or 1 deal every two decades, or even 1 deal every three decades. And that’s good enough, apparently.

This op/ed is more than five years old. The Supreme Court ruled in Stanford v Roche that Bayh-Dole doesn’t give universities ownership of anything. But that beat down hasn’t changed university administrative beliefs. They still believe that universities should own everything, and that this ownership is much better than individuals having choices, and this ownership will result in better, faster public access to research “inventions and creations”–when the evidence after thirty-five years of Bayh-Dole does not support the position. Even at the time Bayh-Dole was passed, those advocating for it admitted university licensing had not done so well, and that only a handful of inventions in 1,000 would earn millions. Turns out it is much less than a handful. At Stanford, 3 in 6,400 inventions over some 36 years–a rate of 0.05%. At most other places, the rate effectively rounds to 0%. But for this, administrators rape what they want and persist in claiming they do it for the public, despite showing no concern for whether what they claim is true.

There is often public benefit in making research findings available–especially when the findings are not themselves full of errors and cherry-picking and falsification and political spin. There may even be public benefit in obtaining patents on some small set of such findings. And there may even be public benefit in, every blue moon, in using a patent to create a monopoly that locks out other commercial development in favor of one company or one group of speculators over others. But there is no compelling reason–other than that the plantation owners like the position they are in–that university patent administrators are the first, best, or only people who can decide what inventions should be owned, what patents should be got, what strategies should be used, and what special favorite companies and investors should be brought in on monopoly deals.

There are some really, really good university patent administrators. If I had an invention, I would consider asking any one of them for help–except they would be prohibited by their university policies from helping me. But these really, really good university patent administrators would get work from the inventors at their universities without any policy compelling inventors to assign their inventions to the university. That’s the neat thing about markets–people seek out the good and the rest have to get by with scams and advertising and policies that force work their way. It’s the not-so-good university patent administrators that benefit from a university’s compulsory assignment patent policy. You know, like the ones that write op/ed pieces without a regard for the truth, other than, perhaps, a belief about the truth of keeping their own jobs.


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