Co-marketing IP

Why do so few universities coordinate their patent portfolios? And why is it such news when they do? The demands of “marketing IP” in the patent broker model are such that it’s a huge drain of energy and apparent loss of value to consider co-marketing. Even dealing with the overhead of an inter-institutional agreement where there’s co-invention takes a lot of energy.

Co-marketing comes in various forms–bundling, co-listing, offices informally helping each other out, and formal plans that allow representation by one institution for another. Some such “innovation networks” have been tried in Canada, for instance, where smaller university offices have banded together to try to find complementary skills, or smaller offices have formed a hub with a larger office that then “handles” their technologies. At the core, however, these co-marketing efforts still reflect a fundamental “marketing” approach to IP. That is, the purported aim is to identify a commercialization partner willing to invest sufficient funds to put a royalty-bearing product on the market or to generate sufficient activity that a larger concern is willing to buyout a start up concern.

Oddly, even where there are strong clustering signals across a research enterprise–such as with multi-institutional consortia, or in the case of major initiatives such as the CIRM work in California, the IP rights still fragment by default into each institution without any significant means to coordinate. This represents a total breakdown of management. At best those in the research community work to suppress IP from getting to their local IP office, as that’s the only way to preserve the change to coordinate research with other institutions and with companies interested in early stage, pre-commercial exchange.

Going to any other model for any given dislosure represents something of a failure (“lacks commercial value”, “funding gap”, “unable to find a licensee”) and gives rise to rationalizations and defenses (“the government should fund what no private investor in their right mind would ever fund”, “you didn’t work hard enough to find a partner”, “you wasted all your time on that cruddy technology just to please a politically powerful academic and didn’t do squat with my stuff”, “the inventors were uncooperative and self-interested and arrogant”).

What if the market model was the problem? What if the “independent inventor broker” model has only limited use in university research administration? What if the shift from a largely voluntary, low volume, relatively high quality disclosure practice to a compliance-driven, compulsory, relatively high volume, random quality process has transformed the patent management activity without changing its gross characteristics? That is, instead of working with a few inventors who want the university to succeed, the shift in process makes the primary activity to try to weed the rotten stuff from good stuff, and deal with wild expectations and politics that result. What if the high volume approach of asking for every patentable invention to go through a first filter of the independent inventor broker model creates such an invasion into the research environment and its exchange practices that it creates huge uncertainties, inefficiencies, loss of goodwill, and loss of value capture across a range of intangible assets, including but not limited to IP? Is that too much to contemplate?

Yeah, what if universities have done a generally valiant but mostly rotten job of implementing Bayh-Dole? Not because they haven’t closed enough deals, but because they have tried to use only one deal structure, one that’s largely unsuited to research in general but can play an important role–on the time scale of once a decade or so. Who are those people who set this university policy agenda into play and hold it in place now? What are their anchor documents that lead good unsuspecting folks to this bad habit?

Think of it another way. Why do we have so little time as universities to partner in the public interest on the outputs of our research enterprises? Why do so many of things researchers want to do–and which turn out often to be positive steps–show up as exceptions to IP or research policy, or outside the decision-making power of principal investigators, their department heads, and their deans?

I know the usual explanations based in corporate-style signing authority and the like. I’m talking about why innovation is not the default for most of university research administration, and patent brokering for commercialization is not only a highly specialized subsystem that should operate only a few times a year? Making the claim that patent brokering is the necessary first step for innovation management just on the face of it seems really, really, really misguided. It’s like having an office that sizes up each email for the Pulitzer Prize before it can go out, and then if it is released, it goes out “judged to not have award winning potential.” The absurdity of the review cannot be mitigated by the idea that it was done efficiently. Even if the Pulitzer review was built into your outgoing virus scan, it would still be absurd.

Imagine a default in which a university made available its patent portfolio to all other universities without formalities for all uses except the grant of an exclusive license to sell or the right for licensees to sublicense, and that the patent broker function could only reserve something from this default if it had a pending deal that mattered. Oh wow. I know, the first reaction might be that this is terrible. (A second one might be “it only works for software”–but more increasingly, software is the only thing that works. Folks need to get into the digital age.)

But think of it. Providing access to new technology is a university research success. Internal use by companies is a research success. Whenever an artifact becomes a tool, that’s success.

The piece of success represented by royalty bearing products sold in a market is a tiny piece of the research innovation picture. That tiny piece can be extremely valuable financially. But it happens like once a decade at the biggest and luckiest schools. It’s pretty harsh to hold the entire significant output of a research university to a process with that kind of success rate. It violates a primary element of marketing–do not seek to retain unproductive customers–and worse, it quietly disrespects all of one’s customers. It’s really sad to recite policy apologetically to say that’s the way it has to be done. It’s not enough to say this is a “filtering” system that must take in a broad catchment to find a few successes.

Another reaction might be: there are a number of programs possible that allow universities to partner as quickly over IP as their researchers can partner over shared research and research data exchange. There is good money to be had in doing so, if money is an important asset for your institution. And there are a host of non-monetary, non-IP assets that can be developed that in the long run are hugely valuable to an organization–assets such as goodwill, working relationships, being near the top of a first call list, ready access to talent and facilities, referral of opportunity, centrality and leadership positions, having a seat at the table rather than being a dreamy wanna be or being designed-around because of the uncertainties of intention with regard to the broker model of patent licensing.

If US universities and their TTOs got serious about using the patent system to promote utilization of federally sponsored inventions, they would be actively building alternative programs–science commons, for instance, or open licenses, or cross-licensing pools, or membership based programs, or use of intermediary organizations. Doing so would allow universities to much more quickly support research reciprocity, development of competitive platforms to support research and internal use regardless of the tax standing of the research organization, and collaborate with mission-directed foundations where a cure is more important than whether a university gets its piece of the financial action.

It’s not so much that universities should be doing more co-marketing–it’s that TTOs need to greatly reduce the reliance on the patent brokering model as the primary means by which they earn their keep in the service of innovation. If TTOs did this, there would also be many more reasons to collaborate on IP across institutions–and time and motivation to do it.