Recently the Association of American Universities published a fakographic about Bayh-Dole. From the AAU perspective, of course, it was all true stuff, because, well, they believe whatever they are doing is right, so whatever they say about something that’s right must be right, too. Even if something isn’t quite right, it’s there as an emblem about what would be right if it were true. Thus, even if touch screens weren’t invented in university research, they could well have been invented at a university, and thus it’s perfectly fine to claim something that’s close, that someone who had invented something that later led to a touch screen once also did research at a university. It’s just a matter of technical details or a difference of opinion about the role of the university in all of it. People who value university work will argue that universities play a big role in innovation, and dull, ignorant people will argue against that value, tearing down all the good work that’s been done to build university “technology transfer” into a globe-leading IP system.
Well now. There’s nothing like speaking the brass truth of the real world, even if the golden truth of fantasy sounds so much better.
Back in 2014, the AAU convened a “task force” to respond to some unnamed “critics” of university technology transfer. The task force developed a “statement” that they published in 2015, “Managing University Technology Transfer in the Public Interest.” Let’s have a look. Here’s the opening preamble to the statement:
Universities have a responsibility to be good stewards of discoveries and intellectual property developed from research supported by federal funding.
This preamblulatory assertion alone is rife with strangeness. How have universities come to have a responsibility to be good stewards of discoveries and intellectual property developed from research supported by federal funding?
We can start with federal funding. The Bayh-Dole Act alters federal patent law, creating patent policy regarding subject inventions and also dictates what federal agencies can require with regard to inventions in a funding agreement for research at a university (or other contractor).
But nothing in Bayh-Dole gives universities any responsibility with regard to inventions. All Bayh-Dole does is require universities to behave in certain ways if they do come to own inventions made with federal support. Same for copyright or data–nothing in the standard grant terms that gives universities any responsibility for copyright or data.
The same is true for federal grant requirements pertaining to intangible property, which is expressly defined to include “patents and patent applications.” According to 2 CFR 200.316, intangible property that a “non-Federal entity” acquires or improves with federal funds
must be held in trust by the non-Federal entity as trustee for the beneficiaries of the project or program under which the property was acquired or improved.
A trustee operates something like a steward. But in the case of a trustee, it may own the property that it manages on behalf of another, while a steward manages the property or affairs of another, for that other’s benefit. It’s clear, however, that AAU expects universities to own discoveries and intellectual property, not merely manage discoveries and intellectual property owned by others, acting as their agents or stewards. But “trustee” carries a substantial obligation–what is best for the trustee? Of course, here in the AAU preamble, it’s not at all clear who the good steward is to serve. Is it the discoverers? the federal government? the “public”? industry? impoverished speculative investors who otherwise don’t have enough opportunity to grow wealthy betting in highly volatile marketplaces where they have a better chance of winning money from other bettors than by getting in on the upside of a patented invention that actually unexpectedly becomes a new product?
We might, in defiance of Ayn Rand, summarize the expectations of stewardship with this book cover on the subject: “choosing service over self-interest.” That would appear to be an easy thing for a university–one might think that a university would be all about “service,” especially service “to the public.” Yet, when it comes to the ownership and management of intellectual property, university administrators find themselves woefully conflicted between helping others and helping themselves. It’s a funny little problem that they typically solve by arguing that by helping themselves, they are helping others, because if the university gets money from licensing, it can use that money to do more research, creating even more inventions with the potential for more public benefit, and besides, all that money lessens the need for the public to fund university research–oops! not that! But it’s too late. They’ve already let that idea out into the wild.
Further, why should AAU restrict university responsibility to research supported by federal funding? Why not also include responsibility for the results of industry funding? foundation funding? donations from the public? state funding? It’s strange to restrict the “good stewards” role to federal funding. Why should funding have anything to do with it unless the source of that funding requires a university that hosts research to be a “good steward” of whatever results from that research. I have yet to see any sponsor of research put things that way. It just doesn’t happen that way.
The problem runs deeper than poor choice of restriction, however. If federal funding does not give universities a responsibility, then who or what does? It would appear that university administrators have decided that they have this responsibility, but what does this mean? Here, “responsibility” is the wrong word, a euphemism. What AAU means is that university administrators have asserted that the university should own what inventors and authors create, called “discoveries.” Until someone who owns an invention provides it to a university for management, the university has no responsibility to act as a steward for that invention. And if a university forces personnel to accept a deal under which university administrators assert that they must own all inventions, then the university isn’t acting as a steward at all–it is acting as master.
We then start to see the shape of the gesture. The university acts as a master with regard to those who discover and invent, but it takes ownership of these things to act as a good steward for some other person or cause–that is, it declares itself act in the interest of others, even though it has no apparent obligation to others to do so. “Stewardship” in the AAU usage is metaphorical, an emblem, a gesture that suggests that the university manages intellectual property for a good other than its own self-interest. But as we’ll see, the AAU task force cannot then manage to separate a university’s self-interest from service to the public. These are one and the same thing.
In recent years, however, some critics have asserted that universities’ technology transfer operations place too much emphasis on maximizing revenues and not enough on moving new ideas quickly into the marketplace, where they can advance the public good.
The criticism comes from the outside, from anonymous people. It’s rather interesting. When the IPA program was shut down in 1978, one criticism from Congress was that universities weren’t charging enough in their exclusive licensing deals with pharmaceutical companies. They were doing, it appeared, sweetheart deals, taking pennies on the dollar. Bayh-Dole, appearing two years later, re-established the sweetheart pathway with a new handwaving apparatus gesturing to the public interest–but in it all the focus was to authorize universities (and the federal government as well) to license inventions made with federal support exclusively to the pharmaceutical industry on whatever terms universities wanted–sweetheart deals were fine; the public shouldn’t expect universities to get rich in their licensing programs; if the price of a patent was too high, pharmaceutical companies would not take licenses and product would not be developed and commercialized, and the public would not see a benefit, and the entirety of federal funding for university research would be wasted.
You must see the logic in this last bit. If federal funding is wasted when inventions are not turned into commercial products for public benefit, then we have two obvious options: turn those inventions into products or shift federal funding to other work. You can see why university officials are so adamant that Bayh-Dole has been successful (even though it has been just the opposite). They fear the logic of their own argument. The stark reality is that even with the sweetheart deals to the pharmaceutical industry as the default, most university inventions made with federal support don’t become commercial products. This, despite the increasingly desperate and clever efforts by university licensing officials to make it appear otherwise. The aspiration is there: folks are trying. But their performance is so terrible they won’t even report it. They report their efforts–number of inventions reported, patent applications filed, patents issued, licenses granted, startups formed, even money made. But they won’t report the one datum that would confirm their logic–that their efforts result in inventions achieving commercial success and by this means benefit the public.
Even many of those inventions that achieve success appear to do so at the expense of the public. Think of the prescription drugs that are sold at monopoly prices, where the federal funding ends up being, after the fact, a subsidy for speculative investors. One wonders how the public’s interest comes first in this sort of monopoly thinking. Oh, wait, I get it–if the investors don’t make craploads of money at least once in a while, then they won’t invest, the pharmaceutical industry will fail, and no drugs whatsoever will ever again be developed. And so the public interest is rhetorically bound up in the wealth dreams of speculators.
If we return to AAU’s second sentence, we can see that it’s a false dichotomy between “maximizing revenues” and “moving new ideas quickly into the marketplace.” Whoever the nameless critics are with such influence that AAU has to mobilize a task force to deal with them, they are pretty dull witted critics. We might observe, then, that AAU chose a rather petty worry to address. That makes a task force’s task less difficult, no doubt. But even each dicha of the AAU dichotomy is messed up.
How does one “maximize” revenue from discoveries? And maximize revenue for whom? Or is the concern maximizing revenue across a portfolio of discoveries and not just from each discovery on its own? Or is the concern that one should not get as much money as one can? One might make more money from patent positions by holding them until industry stumbles over them, and then go on a trolling expedition as Caltech has done recently. If that’s the case, then a moderating position might be to forgo making “maximum” revenue in this way by at least not letting patent trolling organizations have an opportunity to “maximize” revenues. One might maximize revenues, as well, by shifting income from license payments to research payments or donations or tuition–people might show up wanting to do business with a university because a discovery is quickly and widely and usefully available. That would be a different approach than holding out for a monopoly commercialization license for every discovery a university acquires rights to.
As for moving new ideas quickly “into the marketplace, where they can advance the public good,” we have more nonsense. Why must a new idea be moved “into the marketplace” at all? Reading Steven Johnson’s historical account of good ideas (Where Good Ideas Come From: The Natural History of Innovation), most good ideas move into a “networked, non-market” environment, in which they are tested, developed, altered, and emerge through any number of pathways to become important. Moving new ideas–“the discoveries” of the first sentence–into a “marketplace” would appear to be one of the worst things a university could do, in general. One would, instead, move new ideas into networked, non-market arenas. For that, a university might help to establish networks (pay for travel, invite visitors, hold workshops, and the like) and be disinterested in “market” issues. One might go so far as to argue that university administrators, in having such a fixation on commercial markets, work to forestall actual, operative innovation markets that do not depend on monopoly commercial investment:
to buy or contract for merchandise or provision on its way to market, with the intention of selling it again at a higher price; to dissuade persons from bringing their goods or provisions there; or to persuade them to enhance the price when there. This was an offense at law in England until 1844.
We might argue that university administrators arbitrarily and foolishly introduce market price (or “value”) too soon in the life of discovery or idea or invention. If a university were in the service, say, of innovation, then it might encourage academic discoverers, thinkers, and inventors to contribute their ideas to networks in which those ideas might develop.
The AAU tag about markets is telling: “where they can advance the public good.” Research ideas, apparently, cannot advance the public good unless they are secured for the “marketplace.” This is strange stuff, for “ideas” and even for “discoveries.” Even in the case of patentable inventions–which is what the AAU apparatus is actually about, though AAU folks can’t bring themselves to speak plainly on the point–even for patentable inventions made in university research, it is not at all clear that in general a patent is necessary or even a help, or that the purpose of a patent is to collar an invention and so pull it to some market (a market for patents, say). An invention might circulate as a research tool, for instance, and benefit the public by advancing research. Or an invention might be used DIY by industry, each company making its own implementation, without the need to wait for a commercial version, and especially without waiting passively for a commercial version sold as a monopoly to extract as much “value” as possible from the patent position. Heck, an invention might have more value to the public as a trade secret, not available for anyone other than those clever enough to figure it out on their own. There is no compelling reason to think that only by hustling “new ideas quickly into the marketplace” can they “advance the public good.” It’s just nonsense. It is nonsense written in an authoritative style, but it’s nonsense through and through.
In October 2014, the Association of American Universities (AAU) formed a working group on technology transfer and intellectual property with the task of reaffirming that the primary goal of university technology transfer operations is to advance the public interest.
So AAU creates a task force that must “reaffirm” the bland and obvious point that university technology transfer should “advance the public interest.” But even here, there’s a walkback–we aren’t talking about what technology transfer operations must do, but what the administrative “goal” of operations should be. And not only that, but that it’s only the “primary” goal that we are to worry–there can be other goals, too, that don’t have to do with advancing the public interest. “Our primary goal is to advance the public interest and our secondary goal is to make as much money as we can.” Or “Our primary goal is to advance the public interest and anything we do, however we do it, should be ascribed to our passion for that goal, and not to any other purpose.” Yeah, right. The task force is given the mandate to wordsmith the idea that whatever university technology transfer operations do, people should think kindly of them and not be so critical. The worrisome criticism–even if apparently goofball criticism–is the product of universities not having better wording in policy statements. Gosh, the AAU can help with that!
To challenge university administrators to undo their IP ownership policies, change their operations, alter their default licensing arrangements, to restore agent approaches, to reconsider equitable interest, to study and engage commons–these sorts of things are entirely outside AAU’s thinking.
Part 2 is here.