In the current Businessweek there’s a short interview by Tom Keen with John Taft about the idea of stewardship in the banking industry. The parallels with university IP are striking:
[T]he leaders of our financial institutions lost touch with their stewardship values.
It is quaint, but it’s a core principle. When money managers, broker dealers, investment bankers, etc., do what they’re supposed to do, they match up investors with people who need capital. So financial institutions serve—or should serve—an agent’s or intermediary’s role. What we’ve seen, though—going into the financial crisis, and we still see it today—is that financial institutions have moved away from that agent’s role to a principal role. That’s what’s gotten us in trouble.
Are you behaving every day in a way that is good for your clients, or are you thinking about how to make money yourself? Client service—that’s what stewardship is.
Yes, “stewardship” is not at the top of the trendy lists of things that spark innovation–but perhaps it should be there, along with self-sacrifice, service, altruism, good faith, even love. Francis Bacon, laying the foundations for the Royal Society and the scientific revolution, could talk about caritas as a scientific motivation. These are also institutional virtues, constructed to address deep-seated issues in Western thought. When was the last IP policy that wasn’t fixated instead on duty, ownership, regulation, and money as the core virtues of the institution? How are such things the virtues of discovery, initiative, and innovation?
We find stewardship in the core federal funding agreement for university grants (2 CF$ 215.37), where universities are to act as trustees with regard to any IP they acquire or improve with the use of federal funds–they are not to be in it for themselves, but for the beneficiaries of the research. Check the statement of work or the RFP. Do you see the university called out as the beneficiary? Generally not.
If we turn to Bayh-Dole, we see the same move as in 2 CFR 215. Universities are to act as agents, or intermediaries, for the benefit of those they serve–and institutionally, when it comes to research, universities serve their students, their faculty, and the broader community of individuals, nonprofits, governments, and for-profits. Bayh-Dole lays out an agent model for the management of invention rights that starts with the inventors, not with the institutions. The inventors make a commitment to the government. The inventors report their inventions. The inventors choose their agent, and the university has the role of confirming that choice and enabling it. If the inventors don’t choose an agent acceptable to the university, then the funding agency may choose itself as the agent, or may choose the inventors as a small business contractor agent.
The stewardship decision is not how much money the university might make, or how much envy administrators might have if anyone else makes money, but rather how best to use the patent system, if it is to be used at all, to promote the use of discoveries and inventions made with federal support. Folks have got to get this distinction, or they are going to get in trouble the way the banking industry has done. Yes, one can behave “more like a business” and screw up, if the aim is to abandon the core values of the business itself. If university administrators and faculty think core values is sissy talk, and stewardship doesn’t matter, then they are going to screw up. They won’t even see it coming, because their noses will be too deep in the trough to care.
It is this distinction that decides what side of the discussion an administrator is going to be on. If this is about an employer taking ownership of inventions to make money (no matter the attempts at justification), then the administrator has abandoned the guidance of federal grants to universities and renounced the core values of Bayh-Dole. It is all very rational, of course, because making money is rational. But as John Taft might put it, this means moving away from an “agent’s role to a principal role.” It got the banking industry into trouble, and it is what is getting university research enterprise into trouble.
The warning signs are all around. The desire to be the principal has been repeatedly and clearly expressed by a host of university administrators. They have baked it–wrongly–into policy, employment agreements, “educational” documents, workshops, and public statements. The Stanford v Roche litigation is a trail of such demands, claims, assertions, and justifications. No matter that the university administrators’ claims were wrong, badly argued, superficial, and dismissed by the highest court in the land. The impulse is still there, alive and well, now channeled into expansive and botched IP policies, outrageous demands in consulting and conflict of interest policies, and pernicious and sloppily implemented present assignments. [Note to university deans, provosts, and presidents: these are your people–either you side with them and they are your minions or you get them in line or get rid of them. You are responsible. Get up some courage and do your jobs.]
Those advocating for universities to be the principals claim that Bayh-Dole puts universities first in line to take IP rights, and then the universities are then free to use to make money any way they can–licensing to industry, licensing to startups, litigation against infringers. The claim is not true. Bayh-Dole does nothing of the sort. Bayh-Dole, by offers freedom of choice, refrains from stipulating private transactions, and replaces case-by-case agency review with a general set of expectations. Bayh-Dole is fundamentally optimistic: that universities of all organizations in America should find within themselves the self-discipline to work with and on behalf of inventors without the daily oversight of federal agencies. The work of a liberal government, Bayh-Dole is therefore broad enough to let universities set themselves on paths of success or self-destruction.
Bayh-Dole relaxes agency oversight of university IP behaviors, and that has given misguided and impulsive university administrators the room they need to demand ownership rather than to allow inventors to choose university IP services. Making ever tighter and more comprehensive demands on IP sets the universities up to play the role of principals, and in doing so creates huge organizational conflicts of interest, disrupts scholarly exchange that is the university’s great contribution to research and discovery, frustrates rather than advances “technology transfer”, and undermines the value of universities in the public eye. Why fund public universities that are grubbing for cash, claiming to make millions from licensing, accusing their own faculty and students of greed and corruption?
This distinction is fundamental. Universities are asked to be stewards of IP–and yet they would be lords of IP. And in doing so they undermine the core values by which they hold public trust for research activities, and receive public funding. Research enterprise is not sustained by entitlement or reputation. It is sustained by a primary, dedicated, unshakable commitment to the welfare of the community. That commitment is not of the form of “if the university owns all IP and so gets rich from IP licensing, then it can better serve the public.” Folks are the root of the problem who think that, for such an ancient form of social institution as the university, IP stewardship is idealistic or silly.