When you clear away the BS, you may as easily get mystery as clarity. For innovation management, mystery is acceptable.
I’ve been trying to get at what is going on with the present assignment push in universities. It appears to be this: for 30 years, with increasing confidence, university patent managers have told everyone that Bayh-Dole gave ownership of inventions made with federal support to the universities. The Supreme Court in Stanford v Roche said, very clearly, that this was not the case. Rather than going, “Gosh, we’ve been wrong all this time about the law and federal research policy, perhaps we should study up and figure out how this all works”, these folks have doubled down and now are trying to do privately, through policy changes (“these aren’t policy changes!” yar, yar) what they never had through federal law. Rather than correcting policy and guidance statements to reflect the Supreme Court’s ruling, the universities are rushing to change their employment agreements, patent agreements, and other instruments to give them the ownership leverage they *claimed* to have but actually never did.
It’s rather sad. It amounts to a 30 year lie, a 30 year fuster-cluck. 30 years of lost opportunity. Instead of building innovation capacity, diversifying and exploring new ways to connect research and private initiative, universities have dedicated themselves to establishing compulsory schemes focused narrowly on money making, if not from patent licensing then from startup company investment, and if that investment can’t come from the private sector, then get state governments to create seed funds to do it, and if those funds can’t do it, at least issue press releases and reports that make it look like they are, at least imitate an innovation economy to keep the money coming.
There is nothing wrong with government seed funds, done well (but there is a wonderful risk of malinvestment rather than risk investment–c.f., Solyndra). There is nothing wrong with technology licensing offices. Fine and dandy. Nothing wrong in celebrating successes. But universities in particular have a responsibility to show the whole story and not be shills for any particular ideology of “innovation”–even the one that they have allowed to settle in to their own operations, the ideology of “administrator-directed commercialization”.
There is something hugely wrong with making these university licensing offices into little monopolies, making a virtue of self-interested university money-making, asking faculty to be complicit in these narrow interests and limited operating models (and some take that bait), and making the whole system a matter of compulsory ownership, conditioned on employment, use of facilities, and participation in sponsored research–those very things that a university should be making available openly, to advance a broad range of interests–a “public” interest–by independent, not beholden, members of the public–the faculty and students, along with the staff they hire to work for and with them. The commitment these people make is to the public in its various forms, not to the university administration or to a technology transfer office with a “commercialization” model and a money-grubbing attitude that gets in the way of most everything that faculty might think to do by way of collaboration, publication, sponsored research, volunteering, consulting, or teaching.
I know, this sounds so opposed to the aspirational rhetoric used by tech transfer offices–innovation from research, licensing in the public interest, economic growth through start ups, star faculty and entrepreneurs changing our lives. I’m not opposed to these things. I hate to be the grump. In much else of my time, I’m off trying to do useful things with IP, research collaborations, and innovation. But doing those things won’t stop what is happening with the grifters. It’s not even their rhetoric that aspires to everything good. It’s what underlies the rhetoric, and how it is used to obscure and distract from what is being cut off, suppressed, ignored, the effort to maintain power even when the foundations of that power are shown to be wrong–as is the case with misconstruing Bayh-Dole to give ownership to universities, and then taking that to the extreme of arguing that Bayh-Dole is a vesting statute, that ownership of inventions vests initially in universities, not with the inventors.
Bayh-Dole happened in an environment in which universities largely did not claim ownership of inventions. For federal inventions they did not do so because faculty agreed to assign inventions to the government, and universities had no reason to object. When a faculty inventor thought there might be some opportunity to develop an invention directly, they went to an organization that could pitch the case to the agency and folks might work something out. Hence, patent administration agreements. Bayh-Dole made this sort of deal uniform. It didn’t say that universities had to own, or that faculty had to want to make money on their inventions, or even that it was the university administrators’ decision about what inventions to handle. All that was left to the universities.
And what did the universities do? They accepted the view that Bayh-Dole gave ownership to the universities, and this was the cornerstone for building technology transfer offices, changing policies to demand disclosure of inventions and to demand ownership, and rigging management for “commercialization” rather than, say, “protecting the public from abuse of the patent system” or “stimulating free competition” or “reducing the administrative overhead”. Again, there is nothing wrong with commercialization. It’s something that folks do. It gives us products where we didn’t have them before. And products can be a good thing. But making “commercialization” the anchor for science, for university research, for the university role in innovation–that’s horribly narrow and subverts a lot of what university work does for science, the economy, the public.
We have this sequence–Bayh-Dole normalizes patent agreements between federal agencies and universities, and between federal agencies and inventors. The university patent administrators misconstrue and misreport the law in self-serving ways to build a “technology transfer industry”. That’s what the AUTM licensing survey statistics are designed to support–the growth of “the industry” or “the cause”. It’s aspirational, it uses all the right words, but it’s built on a grifter’s deception. The finishing touch is to extend the deception to all university inventions–whether or not patentable, whether by employees or not, whether in federal funding or consulting–make it all a unified process, in nice easy steps, that appears orderly, under administrator control, and successful.
The misconstruing runs deep. The law is cited as if it controls university actions, rather than citing the patent rights clauses in funding agreements. The law is cited as if it offers benefits to universities rather than imposing restrictions on them. Changes then are made to university policy and employment agreements rather than to the conditions pertaining to federal funding agreements carrying the standard patent rights clause. The changes are justified as “required by the law” and to “be in compliance” with the law. The universities demand reporting of inventions as a condition of employment rather than implement the (f)(2) agreement that requires reporting as a condition of the funding agreement, to protect the government’s interest, not the university’s interest. The universities construe “of the contractor” in the definition of “subject invention” to mean “by anyone working for the contractor or with the contractor’s employees” and construe “elect to retain title” to mean “confirm that you have already obtained title by magical means through the operation of the law”. The universities ignored the property trust relationship clause in the federal regulations governing federal grants to universities, and taught themselves to believe that they were the owners of all federally supported inventions, not merely to serve, at times, as the stewards of those inventions.
Senior university administrators, through the sincere efforts of certain patent administrators, helped by willing campus attorneys, have come to believe that they were entitled to all such inventions, that faculty were inventing for the university, and that it was their administrative role, so the rationalization has evolved, to protect the public from selfish, indifferent, gullible, and inept faculty and student inventors. What a reversal 30 years has brought, from faculty inventors being given a huge degree of freedom to work out what inventions might be developed privately to a situation in which the very same law has been used to claim that it is federal policy that faculty inventors should never be allowed to own or exploit what they have invented.
This deception has gone so far that it is construed by some universities now to be a conflict of interest for faculty to release inventions to the public domain, as this causes a “public loss” (meaning, the university loses the chance to make money from licensing) at a “private gain” (meaning, the faculty inventors will no doubt find some way to benefit from everyone having access to their invention, such as consulting opportunities). One major university argued this was the case with open source software. Another is trying to make all uncompensated interactions with the public be subject to approval as compensated activities, because in any activity there may be a change in expertise, and that’s compensation.
The grifter folk believe that Bayh-Dole was inspired legislation because, according to them, it gave universities ownership of faculty inventions made with federal support. That was so smart that university administrators have done one step better and extended the idea, wrong as it is, to everything inventive that faculty may do, whether supported by federal funding or not. The University of Colorado, dropping to new lows, even tries to claim ownership of inventions made by “collaborators” of its employees, as if a policy statement can form a contract, or become its own little private statement of law, with people who have made no commitment to the university regarding patents.
In a way, it is a land rush. The territory is invention rights. The opportunity is to make money by holding rights until someone pays. The more desirable the rights, the more folks will have to pay. It’s not technology transfer–it’s arbitrage, a kind of speculation in buying low (for nothing, really, condition of employment and all) and selling high (anything will do, over the costs of patenting). The effect of Bayh-Dole has been to open up a huge opportunity for a kind of public grifter, that university patent administator pundit who represents Bayh-Dole as a vesting statute, advocates for compulsory ownership policies and limiting the freedom of research inventors, and aims to expand ownership claims while reducing reporting and accountability of the operations accumulating the patents. The grifters sell this position to senior university administrators as a new source of revenue, to the faculty as a get-rich-quick scheme, and to the public as a key contribution to the “innovation economy”.
And it’s true–there is money in licensing, some faculty and staff and students do get rich, and there are inventions that contribute to the economy. It’s just that these things are mostly not true in the system that the grifters have created. They don’t know the law (or they are deliberately, even sincerely happy to ignore it), they haven’t implemented the law, they have subverted the policy statements of their universities, and have built for themselves a little nest of nice pay and a robust set of explanations why the system isn’t working–you know, “funding gap” and “innovation capacity” and “faculty naivety” and “uncooperative companies”. Again, there’s some bit of truth in all this, but what isn’t being told is that a lot of this comes from the operating model itself–compulsory, centralized, narrow, bureaucratized, self-serving, blustering, and defensive. No wonder it takes a lot of money, and folks don’t believe it when the next “vista of potential” is claimed.
Stanford v Roche gives us the chance to reboot the franchise, to try a second time, this time aiming for freedom rather than control, diversity rather than narrow monopoly, and benefit for a lot of folks, not just for university licensing operations. This is not an argument to get rid of licensing operations, or to fix them up so they are better, kinder, more capable, or more efficient monopolies. Leave them as they are, just make them one option among many.
The first university that has the courage to adopt an open invention policy–to restore its invention policy to an open one–will be the envy of faculty everywhere. We can clear away the BS around Bayh-Dole and university tech transfer. Doing so may give us clarity, but it also likely will give us the unknown, mystery, new stuff to do. We can keep the tech transfer offices, the awareness of patents, the engagement with entrepreneurs and companies over inventive stuff, but we must put it into a new context that feeds innovation in all its facets, not simply to reward the grifters for constructing a system that routes everything through the hands of bureaucrats for the benefit of university administrations, all in the name of “public service”.
This is am excellent opportunity for faculty to speak out, to challenge the grifter line, and take back control of inventions. A patent is a form of publication, and the faculty should control that publication like any other–and not be compelled to hand over all rights to university administrators any more than handing over all rights to a university press. The grifters have done great damage along with their little good. It’s time to rebuild, open up university activity to realize the full potential of Bayh-Dole, and to get on with substantive research, demanding (and skeptical) science, collaboration with all sorts of folks who can contribute, direct, and motivate, and compete like crazy to develop new ideas, new technology, new practices that make for a better life.