University Patent Policy for Effective Technology Transfer, 5: Transfer relationships and leading assets

We are working on university patent policies for effective technology transfer. I have described the Eat and Fart model that dominates university patent practice: eat everything, fart a lot, and drop a financial turd once every decade or two to fund the whole crapfest. Declare success.

Now let’s settle down a bit and consider some scenarios to stink things through from a technology transfer practice perspective. In effective technology transfer, one leads with assets that form relationships that then move along (and also form and change) a technology. A technology is not a single thing. It is a “they.” It is a “thing” in its Old Icelandic sense, of a gathering. A technology transfers and reassembles in pieces, bit by bit. As a technology requires skill, or new instruments or machines, or special materials, or new methods, it takes time, effort, and money for these bits to be learned, built, acquired, configured to practice the technology. The transfer takes place effectively when there is a working relationship to do so between those providing access and those wanting access.

Lots of technology that is part of adjacent possibles–things that most anyone can do next once they have gained the capability to do what they are doing–does not require transfer. People can do what they need to do on their own. Transfer relationships then compete for attention–why use a transfer relationship when one can dink around and get there as effectively and with fewer hassles? An effective technology transfer relationship then offers the prospect of acquiring a technology faster, more effectively, than dinking around oneself.

As a matter of effective university patent policy, then, getting patents on stuff that is merely adjacent possibles is counter-helpful. All one is doing is racing ahead a step from where everyone else appears to be and digging a huge pay hole for anyone to fall into. It’s rather like Piglet’s reasoning about how to catch a Heffalump:

The best place would be somewhere where a Heffalump was, just before he fell into it, only about a foot further on.

Only in fantasy worlds visited by university patent administrators is this use of patenting a Really Good Idea for federal research policy. And if federal policy has been drafted to enable such plotting against users of technology, then effective university patent policy for technology transfer must disallow it. A university might acquire patents on adjacent possibles, but only to release such inventions non-exclusively, royalty-free. There is no public purpose served in holding such patents for exclusive licensing, which may never happen and if it does, serves patent trolls and undermines developing technology platforms and standards. A university patent on an adjacent possible isolates that development, excludes it from practice even if developed by independent dinking around like the university research team had just done, and creates real incentives for people not to use the university’s claimed invention.

Researchers dinking around hit adjacent possibles all the time. These inventions are not suitable for patenting by anyone engaged in research or technology development. If university patent offices demand ownership and disclosure of all these inventions, as if these inventions are all huge jumps rather than next reasonable steps, then much of the “growth” in university patenting has to do with patenting stuff that’s not helpful to patent and certainly not meaningful to hold for exclusive licensing or “commercialization” or even to make money. Even companies in industry are not such a-holes about it–when they patent adjacent possibles, they expect to contribute to a standard or cross-license to settle down the lawyers on both sides, or license non-exclusively to the rest of the industry because they would rather have other companies follow their adjacent possible than build out a competing adjacent possible. They learned, as it were, from Sony’s efforts with Betamax video technology. Thus, effective university patent policy forbids the university from holding patent positions for exclusive licensing on adjacent possibles. (See Stuart Kauffman’s Investigations for more on adjacent possibles.)

One aspect of technology that’s transferred, compared to a technology that is, as it were, independently re-dinked, is that a transferred technology may help to establish a working standard–coordinating the dinking so that minor, inconsequential differences can be negotiated so that local instances all perform in a common way, allowing for scale, for data exchange, for common training, common sourcing of materials and services, for network externalities. Working standards are not an unqualified public good. There’s no reason to impose working standards on widespread re-dinking. There are times in the development of new technology when widespread, independent dinking around is important, if not crucial, in exploring what is possible before anyone lands on something to be a platform let alone stakes out patents so no one else can land there, too.

One might see, then, how a patent right–claiming to exclude all independent practice within the claims of an invention–might then be used to suppress independent dinking around and force people to accept a transfer relationship in order to practice a given invention–even if those people made the invention. It’s just that they did not make it first, or rather, did not get to the patent office with it first. They then find out that a university got to the patent office first, has got a patent that suppresses all other dinking, and the university intends to practice the Eat and Fart model of technology transfer and offers an exclusive license that will then provide for one transfer relationship and everyone else can go pound sand.

For university patent policy, then, we want provisions that promote forming transfer relationships when such relationships would result in more effective technology transfer than otherwise. And we want policy to preclude using patent rights to force transfer relationships where none are needed–that is, university-held patents cannot be used to suppress independent development (making an invention independently, practice of an invention without a transfer relationship). The patent policy conclusion, then, is that transfer relationships must be voluntary, not coerced. That policy means, in turn, that a university cannot use a patent to suppress use of the invention. A university cannot use patent law to sue for infringement. If someone is infringing, they are using the invention. If they are using the invention, that’s success. If they did not need a transfer relationship, so much the better. If university administrators spends money on patenting inventions that do not benefit from a transfer relationship, so much the fools they. A transfer effective university patent policy forbids the university from attempting to recover its patenting costs by coercing transfer relationships or by trolling–requiring invention users to pay to avoid a lawsuit.

If a university is going to obtain a patent right, then, it has to use that patent right to create voluntary transfer relationships that move technology more effectively to practice than does independent dinking around and practice of inventions not based on a transfer in a relationship. More specifically, then, the university has to promote voluntary transfer relationships that are more effective than university personnel forming relationships individually, as in publishing or giving a conference paper and getting contacted later and helping someone use a given invention, or consulting (getting paid to do so). Universities in the Eat and Fart model may expressly suppress consulting for technology transfer, asserting that university personnel have no standing to convey inventions (or whatever policy calls them) to anyone without university administrative approval.

Such policies suppress effective technology transfer to set up coercive, institutional transfer relationships. If the university’s default position was open access–that is, the university will never sue for infringement of its patents–then there would be no need to suppress individual efforts at transferring inventions or forming relationships in which technology might be transferred. Rather, a university policy for effective technology transfer would promote and assist just such activity.

We are talking effective technology transfer policy here, not policy to bottleneck all research findings of any importance through a bureaucratic office that aims to make money by threatening anyone who might diminish the opportunities to make money. Neither suppressing external practice of an invention by threatening litigation nor suppressing internal transfer relationships by threatening ethics claims or conflict of interest claims–as if university personnel should be conflicted between effective technology transfer and obedience to serve the Eat and Fart model, which is notoriously ineffective at transferring technology even as it is marvelously clever about finding money to survive year after year.

Perhaps now you see the conundrum for a university patent policy. There are good reasons for a university to acquire and manage patents, even for technology transfer. For effective technology transfer, however, there is no good reason to default to exclusive licensing, to hold back inventions in the hope of obtaining an exclusive license relationship, or to implicitly threaten infringement litigation against anyone who would practice any such invention without first entering into a transfer relationship and paying for the right to practice. For effective technology transfer, a patent has to serve some other purpose than forcing people to enter into agreements to avoid being sued. They have to want the agreement, ask for it. That they will pay then has to do with how they obtain what they desire, not what they must do to avoid getting sued.

The patent right, for effective university technology transfer, is not an attractive asset with which to lead in the effort to create institutional transfer relationships that work better than personal transfer relationships and work better than dinking around. That something has been patented may help a potential user of the invention feel assured that this something is really new and sufficiently significant that a university has spent $15,000 on getting a patent to call attention to the invention, but the patent right itself–the right to exclude all others–is not. That right by default poses a threat to the use of a claimed invention. University patent policy, therefore, to be effective at technology transfer, must disclaim the use of patent litigation as a weapon to force transfer relationships (or to prevent them). There are still uses for patent litigation in effective technology transfer–but not for forcing transfer relationships or preventing them.

This realization about patent enforcement is a tough lesson for university administrators raised on the mantra that a patent not enforced is not worth having, that the whole point of having a patent is to be able to exclude all others, and that it is this right to exclude all others that is the distinctive incentive offered by patents so that wealthy people who otherwise would not put their money at risk will do so, and they do so in expectation that this patent incentive includes monopoly pricing, suppression of competing products, and suppression of any use of the invention other than what the investors choose to develop.

Many university administrators apparently believe this mantra. They see their role to be one of securing patents so that these may be offered to wealthy investors who otherwise would not commit their money to development. But the rationale skates over the realities. True, those wealthy investors–ones naive enough to think that patent “protection” means something crucial AND are still willing to look for inventions they have to license rather than own AND be willing to pay a share of their upside to a university for getting in the way of their deal AND without this deal would not invest in this particular invention otherwise, but that does not mean that other wealthy investors, or not-so-wealthy investors, or just plain ordinary technology-capable folks would not get involved unless they, too, had the only exclusive license on offer. To demonstrate that no one else would get involved with a new invention made in work hosted by a university, the university would have to offer the invention to everyone on some fair, reasonable, non-discriminatory terms, and then, if after three years or so, or a year after a patent issues so everyone could see the claims and know whether they even needed a license, and no one has obtained a license or otherwise was using the invention, and no nonprofit or government agency was willing to fund further research or development of the invention, well then maybe the university would have a basis to offer an exclusive license to those wealthy investors–the ones motivated only by the hope of excluding all others so they could develop the invention without competition and if they ever created a product, they could sell it at monopoly prices and have the added incentive of a better (by some fantasy projection of the power of patent rights) prospect for recovering their investment.

The Eat and Fart model asserts that the wealthy investors of choice are just the ones that require the incentives of monopoly pricing, suppression of products, and suppression of other uses. These are the investors that university administrators patent for and await the arrival of. But this is not effective technology transfer. It is patent speculation. Technology transfer indeed does take place in such relationships, but these relationships are difficult to find, take a long time to negotiate, and generally do not result in broad adoption or development of inventions. Even when, rarely, a new product does emerge, such as in pharmaceuticals, it is priced at monopoly rates rather than to make it broadly available to the public.

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