5. Bad advice abounds.
There is plenty of bad advice abounding. This stuff is not nearly as interesting to work through. And it takes some time to chase down the implications of the advice. But if you hang with all this, we learn something about the experts out there who are determined to show universities how to make money from IP positions. So I will wade through some of it. Any web search for Stanford v. Roche will now come up with tons of this sort of bad advice. I won’t quote it or link to it. Bluck.
The short form: advice that administrators should tighten controls on IP leads to the ruination of those attributes that distinguish university research. Research innovation runs against tighter administrative controls. Is that so difficult an idea?
One claim out there is that the case emphasizes the need to read all agreements and understand their implications. This is hardly relevant. In Stanford v. Roche, it appears folks did read agreements and knew what they meant, but the university didn’t accept the conclusions. In any event, no one claimed that the researchers were snookered into something, or that they didn’t report their activities to the university, or that the university administrators did not realize the import, or that somehow this was all backdoor and unauthorized under policy. None of that.
The advice to read contracts is fine, but it is one of those kinds of advice machines that takes in *any input* and spits out *the same advice*–gosh, guess we better read those contracts. Worse, the “advice” obscures the lessons that could be learned, makes researchers out to be naïve, and makes it sound like the remedy is more administrative second-guessing–er, first-guessing– of researcher decisions.
Another bit of advice is that universities have to redo their employment and patent agreements to “tighten them up” with stronger claims on IP and more administrative control and review. At least reading contracts before signing them is generally advisable. But “tightening up” university IP policies and agreements is not. It is bad juju.
The effect of tightening advice is that university administrators should control researchers’ external commitments. This is not how universities operate. The advice is that this should change. Universities generally operate with open research, academic freedom, investigator-initiated and directed projects, with institutional resources paid for, largely, by sponsors through indirect cost charges and allocated to support the work the researchers do, whatever that turns out to be. These are distinguishing characteristics of university research. This is a huge engine for innovation, permitting exploration without becoming invested in entrenching the status quo or working only on stuff supported by consensus thinking.
Researchers can disclose, publish, receive, visit, invite, collaborate, subcontract, and consult on pretty much anything with anyone. Putting administrators in charge of external commitments means shutting all this down in favor of a management system that ends the system. The advice is either very bad or maliciously dislikes the idea of independent research as a cornerstone of national science and innovation policy. Either way, university faculty and research policy makers alike should vigorously oppose such advice.
Another suggestion, along the lines of tightening but with added appeal for the legal technicalities involved, is that universities must replace promises to assign with present assignments of future inventions. This also is not what Stanford v. Roche was about. Yes, there was a present assignment, and yes the courts did find that it operated, but that is hardly the point. The issue was not a prior university promise to assign being trumped by a later present assignment. The university effectively waived its claims on future inventions when it permitted the postdoc with the present assignment deal with the company to return to the university and participate in sponsored research. It did so within its IP policy, a perfectly workable IP policy, if not exemplary for a university.
It is the university’s later attempt to obtain an assignment from the post doc that was in dispute. The courts said, the later attempt by Stanford to get an assignment from the post-doc was preempted by the assignment made to the company by the post-doc. It does not matter how that assignment was made. It happened to be a present assignment of future inventions. That bothers some folks. It could have been a promise to assign followed up by a confirming assignment. The fact is, the company obtained a valid assignment, that assignment was permitted by university policy, and the university knew about it. The university could not, therefore, be a later purchaser under 35 USC 261. So the university tried to find some way to void the contract under which the assignment was made by invoking Bayh-Dole. The mere fact of federal funding should void invention deals made by university researchers with others. That was the argument, and one the Supreme Court rejected.
Nor does it matter whether the university had a “tighter” IP policy. As long as the university allowed the consulting deal, which was essential to there even being the thought of federal funding, let alone an invention, then the work that followed was out of scope of the university’s policy and agreements, and within the scope of the company’s agreements.
It does not matter whether a university’s initial claim to ownership is in the form of a promise to assign or a present assignment. What matters is the scope of the claim to which the commitment attaches. For universities running open research programs, that scope will necessarily be conditional. Even better if there is *no claim at all*. There is no good reason for making a claim at all.
The university base IP policy is not merely everything you do which the university could legally claim under any theory of ownership—patent, copyright, trademark, trade secret, data, chattels, whatever. It is what individuals involved in research decide to bring within the scope of the university claim. This is the freedom to associate, to collaborate, to publish, to consult. University administrators do not control this freedom. It is what makes university research unlike corporate research or federal lab research. A university researcher can call anyone, visit anyone, choose what research he or she will do with the university, and what research outside the university, what will be published as an idea and what will be published later, as invented and validated in university facilities.
There is no comprehensive IP ownership claims at universities by design, and advice that says universities should make such claims is terribly wrong-headed. If universities become another version of corporate research labs, but more bureaucratic and less selective about what matters, run by administrators not by the researchers, then universities will be transformed from being a flagship of innovation to being an antagonist of innovation.
Further bad advice is to make sure that university administrators read and approve all external consulting deals. Behind this advice is a vision of orderliness backed by authority. Neither is suited to university or research or innovation. Stewart Kauffman thinks of life as being “in the ordered domain, on the edge of chaos”. But we don’t find administrators or their would-be advisers suggesting that policies get closer to the chaos. No, we find them trying to bury the living in more order and control in the hope of creating desired outcomes involving money.
Among administrators, it is a bad administrator who fails to show order, which indicated by having processes backed by policies with record keeping and metrics for each, showing the creation of a technical machine that takes the place of individual judgment and personal action. If an IP policy is not “working” then the bureaucratic response is to gain more power, and impose more order.
An actually useful response might be to reduce power and relax badly drafted, over-claiming policies and processes, and move away from the idea that the most important thing for researchers is that they show a respect for authority even when that authority takes the form of petty and inept rules about innovation and the future. Move closer to the chaos. That’s where innovation is going to be, in the chaos, not trapped in an indifferent bureaucratic system designed to be orderly, consistent, compliant, risk averse, and uniformly “fair” to all. What such a policy is, is adverse to innovation.
University review of consulting agreements is only the tip of the iceberg. There may be disclosure by informal communications. Such disclosure can blow patent rights (perhaps a good thing), can create joint-inventor (and joint ownership) positions, and can transfer cool ideas from the university to a company where inventions may be made entirely by company personnel. The bad advice says—end this practice. Go for the gusto of monopoly positions. That will teach industry to mess with you. Put administrators and lawyers in charge of reviewing each possible interaction, because valuable IP could “get away”, as if the purpose of university is to keep such a thing from happening—until, of course, someone is willing to pay for it.
This advice represents something more than just locking everything researchers do up until one can find someone to pay for it. The reality is, university administrators cannot find people to pay for *most* of the IP they claim. By refusing to release such IP, they effectively work against adoption of research results. People who do not want to pay either ignore or design around. Same for the people who do not want the pain of negotiating a license with a bureaucratic organization, or being exposed to the indemnifications and possible losses of rights typically built into such agreements.
“Claim, license, pay” is not a recipe for university research innovation. It is a recipe for destroying the role for universities in innovation.
Beyond orderliness and the desire for money for everything, what is the purpose of university administrator review of personal agreements? It amounts to a claim that administrators can see the future better than researches can. We can go a couple of ways with this. First, with regard to innovation, it is really difficult to see the future. Administrators have no special perch where they can do it better than others. The Stanford v. Roche case does not teach us that administrators can see the future better than researchers, nor does it teach us that administrators are better prepared for the future. Researchers made the connections with the company, found a way to collaborate and learn the company’s technology, and apply that technology to an area that got them federal funding. The researchers were creating the future as they took each action.
What could an administrator do but caution researchers on “risks”, or if armed with more power, forbid the researchers from doing any more collaborating—resign from the advisory board, stop visiting the company, refuse to sign any deals on confidential information or future inventions—that is, shift the decisions about the future from the researchers to non-researchers, make those decisions “institutional”, company to company, rather than personal? The advice is to make many potential personal decisions become entirely subordinate to institutional “goals”.
If the goal is public benefit, then what mandates that to get there, all research decisions must be institutional? If the goal is finding IP positions to support “claim, license, pay”, then obviously it is more important to claim everything, prevent any private activity, and wait for folks to show up to pay for licenses (that is, pay to avoid being attacked with IP). The “risks” that can be imagined are those under which someone would *not have to pay* or that the institution *would have to pay* because *it had screwed up* with its claiming and licensing. Administrators cannot imagine the “risks” of disrupting personal relationships, delaying action on opportunity, exploring the unknown, or developing things as they happen.
Administrators apparently do not imagine the risks of preventing good things from happening—good things that cannot be imagined in advance because they are of the form of discovery, epiphany, invention, friendship. If you can plan for it, then you already know it. If you already know it, then what is going on isn’t research but merely play-acting. If you don’t already know it, but are pretending you do, then it is a kind of intellectual fraud. One might think, this advice to control researchers’ relationships is a call to double down on administrative intellectual fraud. But we don’t talk that way about it in public. We just say something along the lines that the future sure does seem uncertain and it may be less than advantageous to expend additional effort to control research relationships by policy and non-negotiable upfront employment and patent agreements.
This notion of administrative control also sets up the idea that administrators know better than researchers about relationships and contracting. Or, another way, researchers are inept, selfish, and gullible and must be controlled to maintain institutional order, to prevent institutional liability, and more importantly, so that the institution can make money on their IP positions, and all of this is *in the public interest*. That is: administrators defend the public from the nasty researchers, who are little more than a step away from crimes and accidents. In this form, the advice amounts to an attack on researchers. A form of inventor-loathing.
Is it so subtle, the difference between on the one hand an institution asserting ownership of everything a researcher may discover or invent and on the other a given researcher asking for assistance with a particular cluster of relationships, areas of inquiry, and research assets? It’s the difference between a prison and a hotel. Perhaps those giving out the advice don’t get it. Perhaps they happen to like prisons.
The bad advice for university researchers is this: you should fear not getting a lot of money every time you visit a company or collaborate on research more than you should fear not getting invited back or included in cool stuff in the future. That is: be a prig but make money. This is neat advice for folks who have chosen to work at universities, doing research, especially with public money. What sort of folks do administrators and lawyers want working at universities?
I hear calls to “change the culture” at universities. That was loudly sounded a few years ago around the University of Washington. The idea was, stop doing this world class research and become petty money-grubbers by handing everything you make to the university, and then help those diligent and courageous and expert administrators be successful in shaking down industry for money, for which you get a reward of the share of the loot. It’s not a culture change I want to see.
The bad advice can go yet one further direction as well. Let’s say administrators really *can* predict the future in a clever sort of way. They can see that a collaboration might help researchers learn what a company is doing, and then the university folks can get funding to go out and beat the company to this result, and file a patent and then cross the company later for a share of its income (not even profits—it might not have any!). In that, the administrators are using a government right (patent) to claim money from companies to permit them to practice what they were working toward. The university did not teach the invention, there was no technology transfer, there is no practical application arising from the university activity, no collaboration with industry. It’s a shakedown, pure and simple. Is that the advice for universities—be sure you are better positioned for the shakedown next time? Bah. Dolts.
In Stanford v. Roche, there was a collaboration that resulted in inventions, federal grants for research, and product on the market, with benefits to patients with HIV. Stanford sought to disrupt this outcome. Why would reading the agreements to anticipate the future mean except that “you should have included a way to disrupt success so you get paid more than the offer that was previously accepted”. What kind of advice is that?
Or take it further still. People should not accept deals to collaborate unless they have some deal to get paid a lot if things work out in unanticipated ways. This means, don’t collaborate unless you stand to get a big upside. Pure arrogance, not prudence at all, and certainly not how research or exploration or collaboration operate. Don’t help the kid with his homework unless he splits his salary with you for 20 years, starting in 2031. Don’t volunteer, don’t make things easy, don’t be a patsy–play for the money or don’t play. None of this.
The bad advice is: work so that the university gets leverage on people and can use that leverage to get money, so only deal where there is big money to be made and handle every situation as if it is a big money situation—and if everyone at a university does this (is forced to do this), and every university does this, then eventually universities will force people to pay for patent rights, whether by speculative license or litigation. And those few deals a decade will constitute “success” for the entire national university technology transfer program.
That success is made possible by the “success” of claiming everything, preventing independent collaboration, and restricting the application of anything that has not been paid for.
But why would this playing for the big upside, courtesy of institutional administrators and lawyers, be what we expect of university faculty? Why is this a lesson for them? Why should we say, gosh, faculty are such morons because they are willing to collaborate without going for a big upside and making sure they have got a loaded gun in every relationship. No, that won’t do. It’s not good advice. It’s bad advice. It’s crap advice.
So the bad advice proposes that the lesson of Stanford v. Roche is that university administrators should prevent faculty collaborations any time there could be future money. If the faculty won’t put clauses in to take a big upside, well then the university should step in and insist on that upside *and* take that potential for upside for itself, offering to share some bit back with the possible inventors to be, but only if there ever is an upside, which there usually isn’t, but just in case, it would be better not to consult at all than to lose the prospect somewhere, somehow of such an upside.
That’s not the end of the consequences of such bad advice. If the goal of university research is that the university gets a big upside, and doing so is for the public good, then it’s simply unethical for faculty to cut private deals. They are end-running the system put in place to ensure that university administrators have the rights they need to make money from licensing and litigation. Cutting any private deal stands to diminish the financial prospects for the university, could chase away speculative monopoly investors, and therefore would leave inventions undeveloped and unused. The lesson proposed is, private deals are immoral and against the public interest. Universities lose a lot of money that way, and this can be stopped by more authority and oversight of university researchers. That’s the proposed lesson. And these people pose as experts on the matter.
In the Stanford v Roche case, folks knew about the agreements. They read and understood them. The university was on notice with regard to them. The university administrators, however, apparently did not think that it was a problem for post doc to return to the university and participate in federally sponsored research using just what he had learned and worked on at the company. And it wasn’t a problem, and isn’t now a problem—except that university administrators made it into a problem. The university has rights (via co-inventors’ assignments), the government has rights (via the university’s license to the government), the company has product on the market (through its own efforts, no help apparently from the university), and the public has the benefit of the results of research. Other than university administrators not having a position to shake down a company for money, the situation was a wild success.
There was nothing in the Stanford lawsuit about public benefit, quality control, cheating on a deal, disrupting other collaborations, or anything that might give us pause. This case was purely about university control of technology for the purposes of making money from the work of others. This was not about technology transfer, not about public benefit from the results of research, not about collaboration with industry, not about protecting the public from non-use or misuse of federally supported inventions. This was entirely about using a patent position to go after money, not to attract investment, not to create product, none of that.
So what advice is to be had that isn’t aboundingly bad? Universities should expect, when they do manage IP, to have non-exclusive or partial positions, should expect to receive IP only when researchers have decided that the university should manage IP. If there is money to be made, it is because entrepreneurs, investors, companies, and communities want the university to receive money in recognition for what it is doing to promote invention, encourage development and use, and provide resources for its researchers to get on with things—that is, discovery, invention, epiphany, collaboration. Tighter policies on administrative review will not do this. Finding leverage positions to set up future litigation will not do this. Even tighter policies *on administrators* won’t do this.
We now need more research freedom, less imposed order and process, and less administrative concern with making money, with leverage points for future shakedowns, and with more control. Good advice for universities would be to stand down on IP, relax administrative controls, make a virtue of open research and private transactions, and take IP stuff as it comes. When researchers ask for assistance, then be prepared to provide it, or refer the researchers to folks who can provide it, and be reticent to create institutional controls—whether policy, employment agreements, or contracts with others—that reduce the opportunities for researchers to make their own way forward, as individuals and as teams and as extended networks.