Discovery and Discovery Management, 2

University administrators, too, have oriented their institutions to take advantage of federal funding. Somehow, federal funding increases (to the administrative mind) a university’s prestige, and that prestige then can support raising tuition or getting more funding from state sources and donors (after all, having a lot of money ought to inspire people to give the university even more money). But what’s not reported is that most universities lose money on their federal research programs. That is, they have to spend more money than they receive in order to spend the money they do receive. That other money comes from somewhere in a university’s budget–but generally not as an “allocation to make up for the losses in federally supported research.” In a recent year, the University of California’s loss in its research program was on the order of 20%–over $600m on a $3b budget that had to come from other sources, not from the research sponsors.

Technology transfer comes into this account, too. To the extent that IP management marks discoveries and inventions and new materials and data sets and software, it serves as an index into the outputs of research (and sometimes other creative activities). The measure of these outputs–distinct from publications, students with training, faculty and staff with training, and the like–is that they get used. Not that they are patented or “protected”; not that they are licensed or commercialized; not that anyone makes money or earns a royalty or attracts investment money–but that the outcomes get used, whether for an intended purpose or otherwise, whether for further research or DIY activity or industrial work or preparation of consumer product.

Technology transfer serves a political function as well, signalling to the general public that the outputs of all this institutional research are about to become important, or at least that people are trying really hard with all sorts of complicated and sophisticated efforts to place research outputs for use–even if that is by creating monopolies behind institutional paywalls and then selling these paywalls to companies on the condition they prepare and sell commercial products (or at least sue anyone else who tries to use inventions covered by the monopoly). That so few such products have emerged is rationalized as a sign that technology transfer is so very difficult or that industry refuses to cooperate or that the people hired aren’t sufficiently well trained, or that the office they work in has the wrong name or the wrong organizational structure or lacks adequate funding or needs to expand to include the latest trend in entrepreneurship or securitization of royalty streams, or university people just don’t have rich or powerful enough friends. One problem is how universities handle invention, discovery, software and other “research assets.” That’s been a recurring theme here at Research Enterprise.

But it may be that the lack of outputs managed by institutional technology transfer offices is a symptom of a syndrome of behaviors. Certainly the dual monopoly approach to institutional IP management is one of those contributing behaviors. Especially, institutional insistence to own and control research assets.  But another is the dominance of federally funded competed projects when it comes to allocating space and devoting institutional attention. As one university sponsored projects director quipped, “I wish the industry funding would just go away.” Having all funding coming from the federal government would make his work life easier, and that’s what mattered most, at least when it came to wishing. Yet another behavior involves the expectations on the work of faculty to advance their careers–publication even without consequence, amount of grant money brought in, awards. Faculty before tenure have to survive, and that means federal grants and publications, not so much exceptional teaching or working on a project that might take ten years–one only has five or six years. After tenure, then there’s another effort to make full professor and to keep the stream of federal grants coming and the publications. One can step away from all this, but it takes a tremendous commitment to do so–one that will appear to administrators and even to other faculty as lack of effort or non-competitive ideas or unproductive work.

It’s not that everyone should be expected to invent, or even produce things useful to industry or to speculative investors. It’s rather that a university might be a more productive place in general if it–administrators, faculty–were not so fixated on the importance of obtaining federal funds in response to competed proposals for research. In my experience, the university work that most benefits from IP management was i) voluntarily presented; ii) not supported by federal funding; iii) not the result of a formal proposal for funding; and made available through multiple channels, generally non-exclusively. Where someone wants to develop something on their own, the most effective response is to waive any institutional claim to the work and get out of the way. It’s just that most university administrators cannot accept this idea. They fixate on a single policy, on control, on process, on virtue signalling, on efficiency, on treating every situation with the same tools (because doing anything else would be inequitable). Their metrics of success measure effort–number of patents issued, licenses under management, money received. They don’t report whether stuff gets used and if so how. Probably because the truth is that only a tiny bit of patented stuff does ever get used, especially as commercial product.

The idea, then, is to de-institutionalize discovery activities. Universities at one point (say, when Vannevar Bush proposed a National Research Foundation fund faculty work) were viewed for the independence of their faculty. Faculty could stand outside corporate priorities and government priorities both and work on projects that might come to have importance to the public quite apart from whether a company could sell product for maximum profit or the government could claim credit for funding the work.

In parallel with Bush, Archie Palmer led an effort to get universities to write formal IP policies. Palmer recognized the diversity of debate in universities regarding patents and did not advocate one way or another regarding university ownership of inventions, but he did argue that having a policy was better than not having a policy. In not having a policy on IP, however, universities relied on the defaults of IP law and the promises made in contracts. In its way, that reliance was a good thing for innovation and for administrative effectiveness. Early university IP policies aimed to separate institutional claims on IP from the defaults, set up committees to decide border cases, and created apparatus when the institution did claim an invention. Some universities disclaimed patents altogether and others claimed only those inventions made in institutes they established for the purpose of inventing.

But the problem with policy was that by the 1960s, there were just enough patents generating royalties that university administrators got it into their heads that if the institution owned inventions, then administrators could push more inventions through a licensing system (as was advertised) and make even more money (or make money where before there was none). Even more money could be retained if the licensing system was brought in-house (as MIT, UC, and Stanford did)–cutting out the “middleman” invention management organizations such as Research Corporation and Battelle–and even the university’s own quasi-independent research foundation. From there, it was easy to expand policy claims to include non-inventive inventions (like software and research materials) and inventions (broadly) made outside the scope of employment but within one’s “field of expertise” or “discipline” or even “relating to” such fields and disciplines. Thus, inventions came to include non-inventions, intellectual property came to include non-property (know how, expertise), and employee came to include non-employee (student, visitor, volunteer, collaborator). And thus universities stumbled down a common path, copying each others’ policies, believing the advertising about the latest office to report a big hit deal or that huge revenues were just around the corner if only investors would buy all the startups being spun up by university administrators.

And so here we are, with IP policies stacked pages high, piles of issued, unlicensed patents, exclusively licensed but unproductive and unused inventions (even where there’s money made in license fees and realized equity), and advertising claiming this approach is virtuous, wildly successful, and in the public interest. When by all objective standards, it is none of these things.

What are we going to do about it? Are we ready to discover alternatives? Are we prepared to innovate when it comes to innovation? These are the questions.

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