NSF IPA Metrics 1974-78–Two tech transfer programs

Universities participating in the NSF’s IPA program operated two technology transfer programs. One program–the one endorsed by the IPA program–focused on patents and licensing. Of the 645 inventions reported by universities (and other nonprofits) made in work receiving NSF support between 1974 and 1978, universities claimed ownership of 223 and obtained 106 patents. Those 106 inventions, then, become the subject of the IPA program’s success metrics. As we have seen, of those 106 patents, 28 were licensed and 13 generated “royalties”–but nothing that approaches royalties from actual sales of commercial product for any significant time or scale. Instead, the royalties appear to be mostly patenting cost reimbursements and license issue fees–things that run up the cost of acquiring rights and have little to do (other than cost) with developing inventions into commercial products.

But that’s only the overt technology transfer program endorsed by the IPA program. The other program, the tacit one, involves the other 422 inventions that were not claimed by universities as inventions–but nonetheless, universities were aware of these inventions (and reported them in detail to the NSF) and personnel at these universities were in possession of the inventions (even if the NSF claimed ownership of them and released the rights to them open access). This tacit program of technology transfer makes use of a wide range of opportunities, including the use of the patent system. It differs from the IPA program in that the institution hosting the research does not demand an ownership position in patents for the purpose of dealing in exclusive licenses for a share of the money that might be made in suppressing all other practice of the invention. An inventor in the tacit system may use patenting resources made available by the host institution, but that is a choice of the inventor, on the inventor’s terms–which is, in practice, a huge difference.

These two programs are in competition. The IPA program aims to suppress inventor use of the patent system (the host institution must have this opportunity), presents inventor publication of inventions as the destruction of valuable public property (the patent right), and argues that inventor consulting to assist others in the practice of an invention denies the host institution its “right” to money from licensing the patent–in which case, the consulting is included at no charge (and therefore for no personal income to the inventor) as part of the licensing transaction. Any income beyond salary for the inventor comes when the license produces payments greater than the costs of obtaining the patent and enforcing the license and patent rights.

The IPA program, then, is the antagonist to the tacit program of technology transfer, denying inventors and research teams the use of open access and the patent system both, while suppressing accounts of how the tacit system has operated. The tacit program then operates covertly, without institutional resources, and often with institutional opposition. One might say that prior to the IPA program–which required institutional ownership and patenting of IPA inventions–institutional patenting resources co-existed with the tacit program of technology transfer. While the federal government might choose as policy the suppression of nonprofit tacit technology transfer programs, it is not clear at all why university administrators chose to align their institutions with such a policy. It does not result in “more” technology transfer, nor “more rapid” technology development, nor greater “commercialization” of inventions, nor more significant “financial return” to universities (a handful of lucrative exclusive patent license deals per decade not withstanding).

There’s more. Of the 223 inventions claimed by universities, only 106 received patents. That means another 117 inventions were the subject of patent applications but failed to be granted patents. Those inventions, then, also fell into the tacit technology transfer program, but only after a delay of some years while the patent applications were being prosecuted. That brings the total inventions in the tacit program to 539 inventions. All of these inventions were in the possession of the universities’ personnel. All then also had the prospect to be “transferred.” But we have no information about them. The tracking goes dark. It is as if the IPA program, in shining a light on those inventions for which patents were obtained, casts into darkness all the other inventions–not only the ones that contractors declined to own but also the ones the contractors did demand ownership of (or having obtained ownership, begged the NSF to allow them to keep that ownership) but failed to patent.

The vast majority of the inventive output of NSF funded research moved through the tacit technology transfer program, did not involve exclusive patent licensing–or, for that matter, any licensing at all. But the operation of the IPA program had the effect of burying the tacit program, as if the two programs were in competition and the NSF sought to suppress information regarding the inventions that did not enter the patent-based program. If we were to see “success” stories about NSF research resulting in inventions, it would appear that we would read about exclusively licensed patents leading to the development of commercial products. Apparently, however, there were no such success stories–out of 645 inventions, 106 patents, and 28 licenses, next to nothing comes about other than universities spent on the order of $50,000 on patenting and 13 inventions managed to at least recover patenting costs (and a bit more for some, but nothing approaching even a modest commercial success).

We might put it this way. The tacit technology transfer program–open access with regard to patent rights, but perhaps asserting control over other assets (for instance, copyright, willingness to share data or details of experimental procedures, or access to prototypes)–remained the primary approach to university technology transfer. The NSF IPA program then induced universities to delay open access for all 645 by the time required to disclose the inventions to the government–maybe only a few months for most, but that delay may be significant, not trivial.

Then the IPA program further delayed 223 of these inventions for patent applications to be prepared. Of these delayed inventions, the IPA program delayed 117 of them by the two or three years trying to get patents to issue that never did issue. Why would anyone adopt such an invention without some assurance that when a patent did issue, a non-exclusive license would be granted? No–only a company (or speculative investor) that expected the exclusive license would adopt anything.

It gets even worse. Of those 106 inventions that got patented, only 28 were licensed. That means 78 inventions were stuck behind a patent paywall but were not licensed (at least during the five years of the NSF IPA program–who knows what happened later?). If a university does not license an invention within a few years of a patent issuing, expect that it will never get licensed. It will be lost amid the constant stream of new inventions that must be disclosed, patented, and marketed for licensing. Assuming a university is fool enough to pay patent maintenance fees to keep its patents in effect for the full term of each patent, the IPA program delays these 78 inventions from entering the tacit transfer program for 17 years.

We aren’t done. Of the 28 inventions that were licensed, only 13 resulted in payments. What do we make of that? The suggestion is that 15 inventions went nowhere–were not “developed,” did not become “commercial products,” and did not “benefit the public.” These inventions, too, were delayed entering the tacit technology transfer program by the IPA program for up to 17 years.

We are left with 13 inventions for which universities received licensing payments. Let’s assume these inventions were licensed exclusively–since there is no compelling reason for an IPA program at all but for exclusive licensing of patent rights. It’s clear that none of these inventions resulted in meaningful commercial products. So it goes. That’s not the problem, however. The exclusive licensing means that the licensee (actually, new owner of the invention) works on perhaps a single product–and even if the licensee succeeds with this product, all other applications, improvements, and developments are withheld from the tacit technology transfer program for the term of the exclusive license or the life of the patent.

Thus, the IPA program delays by months to years to decades the entry into the tacit technology transfer program what are taken to be the most important results of NSF-funded research at universities. The more important the result is determined to be, the longer the delay. And where a delay of even a few months can be fatal to any uptake at all, delaying access by even the time it takes to prepare a patent application or receive an issued patent means the IPA program worked to suppress many important results of NSF research.

Not only that, but the IPA program, in promoting its own importance, downplays the activities of the tacit technology transfer program–of publication and conference presentations, of visiting scientists and business folk, of graduating students placed in industry positions, of data sharing, of collaborative development, shared research and technology platforms. The NSF IPA program in effect buried nearly all the significant inventive output of NSF funding in the hopes that a few exclusive licenses would result in commercially successful products–and it appears those hoped-for  products didn’t happen.

Delayed open access under the tacit technology transfer program.

Delayed access at a critical point in which to initiate transfers.

Delayed longer for the most important NSF findings.

Motivated potential recipients who did not need or expect an exclusive license not to adopt.

Motivated others to seek alternatives–design around, obsolesce, block, undermine, invalidate.

Suppressed public reporting of the tacit, open access technology transfer program.

It may be that the IPA program sounded good to NSF officials. (It sounds horrible to me, but then I spent over 15 years in university licensing practice, so I’m not so ignorant that stuff like this even sounds good–don’t ask me about university Bayh-Dole practice, then). Given the outcomes of the NSF IPA program–nada–even government officials ought to have stepped back and recognized that all that glisters is not gold.

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