To lay it out in bullet points, the now dominant university patent-based approach to research inventions defaulting to exclusive licenses:
- fragments invention platforms with no way to restore them
- attracts speculative investors while pushing away companies
- raises barriers to early adoption and variation on new technology
- induces companies to work to undermine the invention rather than build on it
- constricts the value of new technology to an institutional licensing relationship
None of this “protects” research inventions. None of this facilitates technology transfer. Quite the opposite. There’s enough money supporting this approach, however, that all that’s needed is one big financial outcome every two decades or every 5,000 inventions per university to make it all appear profitable–a patent license, a startup is acquired, an infringement judgment, a financial settlement in a contract dispute. All the other inventions in the university’s “portfolio” then become the grist for the successful deal, and the practice perpetuates itself for another couple of decades.
University administrators in response to the increased volume of inventions, selectivity of external agents, and a perception that they could make better money if they did the licensing themselves, turned their technology transfer offices into licensing offices and largely shut down the external agent model. If external agents were going to be selective, then university administrators would do the work themselves. University licensing offices, therefore, were programmed as it were to receive and not to allow inventions to leave–at least not easily, not without a fight, not without burdens. The basic logic for not waiving inventions was this: if the invention had no “value” in licensing, then it was not worth anyone’s time to bother with the paperwork of waiving the university’s interest. If the invention did have “value,” then the university should keep working to license the invention. If an inventor wanted an invention waived, that meant that the invention must have “value” and so should not be waived. Catch-22.
An inventor wanting an invention waived therefore implied that the inventor had secret knowledge of the invention’s “value” and had kept that knowledge from the university–a potential ethics violation. University administrators passed the Fenn case around to each other to persuade themselves they were right. As a result, university licensing offices would waive inventions only when they were truly persuaded an invention was dead, no longer of any “value,” and that the inventor had no secret knowledge by which the invention could be developed or licensed. Even then, university administrators added burdens–payment of the university’s past patenting costs, maybe requiring a share of the inventor’s income going forward, and a stipulation that if any university resources were used in subsequent research or development involving the invention, of the invention then the waiver was off and the university would reassert its claims to the invention and to any new inventive work.
As a consequence of this “reasoning,” university patent portfolios expanded rapidly. Observers not in touch with all this meaninglessness attributed the growth in university patents to “research innovation” and evidence of how important federal funding was to the US economy and its citizens’ hope for future quality of life. But that was spin. In reality, a less meaningless statement is that the growth in university patenting reflected a wholesale abandoment of selectivity in what was worth patenting. Anything that could be patented ought to be patented–at least as far as a patent application–and shopped for licensing income–at least enough to cover the cost of the patent application.
Only fools with access to money would patent something just because it is patentable. Only deeply confused fools at universities would do so to prevent inventors from owning their own inventions or to prevent broad public access to the inventions where patenting would make no difference in use and development. But these folks weren’t fools–their livelihoods depended on producing income from patent positions, and since they weren’t spending their own money on patenting, any invention that sat or got up and left was a lost opportunity to make that money. So, like tragic heroes that never make it to Act III, they never have owned up to the foolishness of the endeavor as a matter of ethics or public policy or even as a matter of money-making. It’s enough that someone strikes it rich every few years to spin the entire endeavor as in the public interest, if not full of crazy complexities and difficulties dealing with such “early-stage technologies” in “high risk, high return” situations. For which, since we are being meaningless here, one can read “we have created our own problems by being unable to be selective about what to take on for management at the university and what to let go of, either for a reasonable deal where we continue to help in exchange for some benefit, or entirely.”
A university that was selective would say “no” to most inventions, would not even require inventions to be offered to it, and would be as happy with the “success” of those inventions not accepted for management as for the ones that were. The effort–the complexity, difficulty–would be in what to accept–not in trying to make back one’s expenses after having said yes so often that one has broken the systems that did (sort of) work. It turns out that it is easier–for many reasons, most meaningless–to require ownership of inventions and then try to make money on some few of them to pay for the effort on all the rest than it is to try to sort out inventions at the time they are presented and accept only a few–one or two a year, say–enough for focused effort, perhaps even with an emphasis on non-exclusive licensing, even royalty-free licensing (you know, in the public interest, like the federal government’s once default practice, but with greater proximity to the inventor to facilitate adoption by industry).
When the invention agents said “no,” university administrators brought the licensing work in-house. When they couldn’t say “no,” they tried to license stuff themselves. When they found that they couldn’t find companies to take exclusive, royalty-bearing licenses, they set about to creating those companies themselves, as paper corporations if they couldn’t find investors foolish or speculative enough to finance the companies. When venture capital firms said “no,” the administrators sought out seed funding and angel funding. When those folks said “no,” the administrators got states and their own universities to create the investment funds. Thus, look at the count of startups at universities, all with licenses. Except many of them are paper companies–corporate shells into which to stuff licensed technology. Others are merely research repackaged as a company with “faculty entrepreneurs” running the company and the university research projects that the company covers for. And a few are real, bona fides. But lost in the statistics and spin, and so not supported any differently from the others, and stuck with the same bureaucratic burdens that come when a nonprofit must enter into a license contract, passing over all risk and demanding payments, insurance, audits, and legal leverage.