Finding reasons for ownership of inventions is especially important for organizations. Organizations do not have impulses. Organizations are not passionate. Organizations are fictional persons, golems, creatures of legal incorporation. They may own, act, and carry liability, but they don’t think and don’t do anything on their own urge. Those with executive authority take actions for the organization. They are the ones with passions, urges, thoughts, and concerns. If an organization is not to invest its executives with following their urges, then it is rather necessary for there to be reasons for an organization to act.
If things aren’t thought out, then the reasons take the form of a later rationale–anything that sounds good will do. If things are thought out, then the reasons represent the motives and purposes and logic that give rise to the organization’s action. That is, policies are based on reasoning such that if the reasoning changes, then the policy should also change to reflect the reasoning. Sounds reasonable enough, though we all know that this is not how policy in organizations generally works. Once a policy is in place, whatever the motivation, those who draw their authority from the policy aren’t disposed to see things undone or changed in a way that would diminish their standing.
If we look at an organization’s innovation policies, we can expect that reasons will be one of these two forms–justifications or reasons. For justifications, we have a problem, because the purpose of a justification is to stand down the discussion. Defending a policy in this way is merely a way of indicating that one wants to keep the policy. That’s all.
With this as a preamble, we can ask the question, Why do university administrators (or in some instances faculty, or even students) require university ownership of inventions made by university personnel? Again, we are not looking for justifications for the position. Those are a dime a dozen. Instead, we are looking for insight into how such a claim advances economic development, innovation, quality of life, research, science, and community support for university work. How does university ownership contribute to such goals? Or do we find that there are other purposes at work?
I don’t have a magic ball to inspect the true motivations of administrators, so for now we will have to do with some conjecture. See what you think. Let’s dispense with some justifications and then dig deeper.
1. Bayh-Dole requires university ownership. No, doesn’t. Read the law. Same for other sponsored research agreements. If these contain provisions that the university will own inventions, it is almost always university administrators who put these clauses in the contracts, not the faculty investigators or the sponsors. Why? And even then, why claim ownership for the non-Bayh-Dole inventions?
2. University administrators can manage inventions better than university inventors can. This misses the issue of whether university administrators can manage inventions better than any other administrators. It also misses the question of whether university inventors would do a better job if they had access to the same funds, legal counsel, and policy leverage that university administrators have.
3. University ownership is necessary before the university can devote resources to develop an invention. This also is generally not true, since university personnel work on inventions owned by *others* all the time in their research programs, without any problem at all. Apparently the problem is when the inventors are other university personnel. Further, even if university ownership were necessary, what creates the requirement that a university *must* be the organization that devotes resources? Why do university administrators insist on having the option to devote resources?
4. The university must have ownership of inventions to protect the public from inventors’ indifference, incompetence, greed, or other bad behaviors. This justification is more interesting, as it points to a fundamental disregard by administrators for faculty in general and inventors in particular. One might ask, who protects the public from the administrators, then? One might also ask, are these bad behaviors widespread? If so, perhaps that’s something to pay attention to. For now, I haven’t seen any indication that inventors are bad people, or that even if some few are, the rest should have their rights stripped as a precaution.
5. Most university inventors end up assigning to the university anyway, and having a policy that requires this merely speeds up the inevitable. To save everyone time and bother in re-inventing the wheel, we just get on with it and folks figure out in time how much better this is than repeating the questions and fuss each time about what we will do, how royalties will be shared, and what level of inventor involvement is permitted. This is the inevitability by denial of liberty argument. What is there to say? We have this policy because we imagine it is the only or best alternative for inventors. Since most people live in the city, it’s no big deal to require them to live in the city. The roots are love of order through the exercise of power. Generally, this kind of thing works against innovation.
I’m going through these rationalizations to try to sort out where the actual reasoning lies. I think of these exercises as cascades of reasoning. First there are the easy to say things–it’s just the way it is, it’s policy, stuff like that. Then there are the first justifications–it’s the best way, contracts require it, because we can we do. Then we try to get down into it and start to get at the heart of it.
It may be that administrators (or even other faculty) think that inventors are bad people and the public and even the university has to be protected from them. That’s sort of interesting. What makes inventing so sullied compared to, say, writing a textbook or discovering some new thing?
It may also be that administrators (or even other faculty) want to make money. In this, the argument would be: the university wants to make money from inventions made in its programs, and to achieve this end, requires ownership. We might pull this apart as well, since making money and ownership of inventions are not necessarily all that closely linked. Yes, one can obtain patents and license them (or now, it appears, sue industry) to make money. But it doesn’t happen all the time, and it’s not the only way for a university to make money, and there are ways to circumvent the whole process. For industry, one way is to simply ignore the patented research invention, design around it, and make the *whole line of research* a waste of resource.
We might ask, given all the other ways to make money, why licensing or litigating patent rights? One answer, superficially, is “because we think we can.” That is, it’s just a power play. A kind of administrative realpolitik. If this were the case, I don’t see how it fits into the existing national research or innovation policies, though it makes sense that such policies ought to take into account the idea that university administrators want to make money more than they want to help the public. Or, another way, the administrators want it to be the case that the public is helped most when the university makes money from licensing and litigating inventions.
I cannot help but believe there are not many members of the public that would agree with that. Perhaps I’m wrong. What do you think? Is the public best served by a university seeking to make money from licensing and litigating inventions made in its programs? Is that the primary purpose of federal research and innovation policy with regard to universities? Is that the key element in university innovation policy? I’m not going for it.
As we work through money issues, though, we seem to get close to a working hypothesis. It is this: university administrators require ownership of inventions because they want a piece of the action. They cannot tolerate anyone making money from inventions without the university getting some, and they cannot bear the idea that someone would publish an invention without making the attempt to make money. Thus, they come to equate ownership and making money. Is it that simplistic?
If it is this easy, then university ownership claims don’t have much at all to do with national research and innovation objectives, unless of course those objectives have to do with motivating university administrators to get ownership of inventions and make money from those inventions. This line of conjecture is supported by many university patent policies that stipulate that the university takes ownership only if there is “commercial potential” for the invention. “Commercial potential” is administrative speak for “a prospect of making money for the university.” That is, the university only takes ownership of stuff that is not worthless with regard to making money. The big problem then for university technology transfer offices is trying to find someone who wants to prove them right–that the university will indeed make money on the invention, whether anyone else does or not.
If this is the case, in the very act of claiming ownership of a research invention a university makes it clear to everyone that it is attempting to make money somehow on the invention. From an industry perspective, the claim is: we will find a way to get *your* money or make you regret it. Well now, that would be just the thing to spur university-industry collaborations, wouldn’t it?
There is are two other reasons that may lie behind a compulsory ownership policy. One has to do with the T-Rex problem. In Toy Story, the T-Rex cannot handle disputes. I’ve heard administrators say that the reason for ownership is to prevent inventors from fighting with each other, disagreements over use of resources, or to preclude disagreements between the inventors and the university over such things as ownership and money. This is another version of the precautionary principle–because we can imagine inventors squabbling with each other and us, we end all that by taking ownership and telling them what they will get. This is the role of innovation policy–not to promote innovation but rather to make life easier for administrators in dealing with squabbles over innovation.
A related reason is that if individuals were to own invention rights, then research inventions would be fragmented into many bits of private ownership. Co-inventors would have to work together, and later inventors would have to deal with the ownership positions of earlier inventors. Faculty might have to negotiate permissions from their own graduate students, and industry would have to navigate a complicated tangle of private ownership positions. Who could possibly end up with a well paying monopoly position if this is the case?
When universities advocated for Bayh-Dole, one of their arguments was that they could do better deals than government agencies could because they could do exclusive licenses. For some university administrators, it is this interest in creating monopoly positions from university inventions that is the founding reason for university technology transfer offices at all. Without exclusive licenses, everything is dull and boring. I’ve heard university licensing officers say they would not accept for management inventions if they were required to make them available non-exclusively. In this light, fragmenting patent rights would be the worst thing. Folks would have to work non-exclusively, or would have to work things out on their own to create a climate that allowed for patents to be filed and for industry to adopt. This all can be done without university ownership, but perhaps it becomes clearer why university administrators want total ownership. Without it, no monopoly licensing and much lower motivation to spend $15K or so to file a patent application, and thus no prospect to make a lot of money (at least, not from a monopoly licensing model).
Fragmentation is indeed a problem. But it is not restricted to individual claims. It is becoming apparent that nanotechnology development has been hampered by university ownership fragmentation. Universities have obtained many patents in nanotech, but have not worked out a lot of agreements to coordinate or pool availability. Where there have been licenses, they are generally exclusive deals, and when the company on the other end loses interest or funding, the invention falls into limbo, unavailable.
While fragmentation is a problem in an active area of research, as it was for the US aerospace industry in the early days of the airplane, compulsory university ownership is not a workable answer until universities show they are able to do business with one another.
Similarly, while combining ownership is one approach to fragmentation, another is to be much more selective about ownership. Where an individual may not be willing to put $15K at risk for a patent without a good prospect for a return on that investment, a university with a $1m+ patenting budget can file a lot of applications without worrying too much about it. The university in its efforts to find things that make money may end up being much less selective about what things wind up with patents. Working this way, one would want to see in university innovation policies a statement with guidance about selectivity in filing patent applications to ensure there is a robust public domain from which everyone may draw to develop their next ideas. I’ve never seen anything like that. It’s always about strengthening the requirements to assign and getting more funding to file.
Another route to go with fragmentation is to establish more robust research standards–greater effort to create libraries, platforms, and exchanges on standard terms, creating a re-mix culture, if you will, for research findings. This sort of thing is being done for open source software and for some research tools such as cell lines developed with federal support. This sort of open innovation is so alien to monopoly intending licensing officers that they cannot conceive of how they would participate, let alone *make money*. This, quite apart from the apparent effectiveness of open strategies to permit broad access while shaping sustainable if not commercially profitable operations. In these initiatives, however, the profits are not from licenses, generally, but rather from other activities, such as services and specialty applications that the licensing at little or no cost enables.
Open strategies do not depend on transfer ownership so much as on permissions. Open source software licenses are based on copyright, for instance. It is not who owns a particular piece of code, but the arrangements on which the code is made available. Similarly with inventions. The university does not need to own an invention but only to have permissions to practice the invention in its programs. Having a clear record of permissions enables fragmented IP environments to become sufficiently ordered to encourage practice. Universities could play a role as stewards of such permissions without requiring ownership. It is just an instance of the limits of the ownership argument.
The dispute and IP fragmentation discussions lead to an observation. By scattering research funding across many universities and research teams, and then emphasizing the importance of patents as a way of marking the research event called “invention”, the government has created a higher potential for fragmentation and increased the non-selectivity of patenting at universities. While Bayh-Dole invites universities to explore a wide range of uses of the patent system to promote use of inventions, collaboration with industry, and support for small companies, university administrators have instead adopted a monopoly licensing philosophy, and with it a mandate to make money under the rubric of “commercialization”. It is an open question whether such widespread efforts at monopoly at ever earlier stages of research led by patent officers rather than inventors serves national research or innovation goals. It is also an open question whether such behaviors enhance the fragmentation already given potential by federal funding strategies.
My own thought on it is that early monopoly positions work in some few settings, but generally harm research, innovation, and science. A university inventor, embedded in research work, is in a better position to decide what to do than a university administrator. Indeed, if the university has a policy that uniformly suppresses the researcher’s thought on the matter, the university effectively shuts off this line of thinking. The university administrators all but argue–don’t bother thinking about the effects on your research and that of your colleagues or on industry–just hand over the invention to professionals working for us and we will find the best way to make money on it, and if we do, we will share our money with you. What a great deal! And for some, it has been. But for many others, not. And for all, the worst of it is, they are not encouraged to think about the effect of a monopoly position on research–certainly not as they would if the invention were their own to manage. “No thinking required–this is innovation after all.”
It is this sort of “efficiency” by which researchers are invited not to think about the consequences of what they do, beyond the expectation that there may be money to be made from patent licensing. What is the point of an innovation policy that suggests that inventors be less engaged, focused on money, and compelled to be dependent on others. It would seem that such a policy diminishes collaboration, disempowers those doing the creative work, and puts the emphasis in the wrong place (money, ownership) at the wrong time (in publicly funded research).
While it is still fine to emphasize the value of inventions in research, and even the role of patents in the deployment of inventions, a policy does not have to go the next step and require university ownership. Such a requirement changes things entirely. One gets an entirely different social discipline going. Rather than one of working toward a share of influence over decisions, such as in an arena, instead inventors are required to be part of a presumptive input-output operation, that takes their work and may, or generally may not, produce anything in the big wide world besides the cost and uncertainty of a patent owned and controlled by administrators. It is this transformation of the social discipline by means of a compulsory policy statement on ownership that dramatically changes the conditions under which university-catalyzed innovation can come to play an active and distinctive role–in research, in the community, and in industry.
At the end of this cascade, I don’t have a good reason for why university administrators are working to make ownership of inventions ever more compulsory. I don’t see how it serves anything other than their desire to make money from monopoly positions with monopoly investors. I don’t see how that desire should count for a whole lot in federal research and innovation policy, and I also don’t see how universities making money from patent licensing and litigation means much at all to the broader community. It all seems such a distortion and damage to the research environment. I suppose, as long as one doesn’t think about it, it all seems, well, so very natural.