The Dumbest Possible Model

It’s hard to describe how devastating the Stanford v Roche decision is to autocracy-minded university bureaucrats.  They claimed Bayh-Dole requires university ownership. So they instituted policies that require university ownership, “to comply with Bayh-Dole”. Then they argued in Stanford v Roche that Bayh-Dole vests title with universities, so they don’t really have to have ownership policies in place at all.  But the Supreme Court rejects their arguments and rules that Bayh-Dole is about relationships between universities and agencies, not a secret change in patent law regarding initial ownership of inventions.   Anyone who works through the law, the implementing regulations, the standard patent rights clauses, and the regulatory framework for federal grants to universities will see that the Supreme Court got things pretty close to perfect with their reading of Bayh-Dole.

Now the bureaucrats are trying to salvage the policy architecture they have created—terribly flawed and unreasoned as it is– and are seeking any way they can to pin down institutional ownership of inventions.

How did this situation develop?  The present American university technology transfer architecture is based on a deep, consistent, and entirely wrong premise–that federal law requires university ownership of federally supported inventions.  This wrong premise has all but destroyed the previously flourishing, diverse agent-based approach to university inventions.  That agent approach is what Bayh-Dole was built for, what it anticipated, and why it is so darned sophisticated.   Instead, we got from university administrators the build-out of one of the dumbest innovation models possible–a corporate research model affixed to an institution-as-agent model, aiming to serve as a welfare system for wealthy investors struggling with their speculative risk exposure.  This the administrators call seeking the “public benefit”.  The university ends up serving technology speculators or becoming a patent troll.   The model is a jumble of “best practices” that combined make one of the worst possible practices.   The Dumbest Possible Model.

It is this Dumbest Possible Model that university bureaucrats in the retrenchment movement are now trying to save.   The opening gesture, some years ago, was, “Gosh, we wouldn’t take all your inventions if we had the choice, but we don’t, it’s that darned federal law what makes us do it.”  Now we all know it isn’t the darned federal law, so there’s no reason from that direction to take ownership of federally supported inventions.  But instead of going “Whew!  we sure are glad that’s over”, they are going, “No, institutional ownership is a really great idea–we’re sure glad we thought of it.”

What has changed in the 30 years or so since Bayh-Dole came into effect?  First, we have a change in the nature of university resources:  the idea that university facilities are not for faculty to serve the public and students to learn, but rather for faculty and students alike to make things to be owned by the university, for its profit-making activities.   Any personal benefit is construed as simply immoral, a kind of corruption.  It is as if “working for the public good” means “working for the good of administrators who wish to make money by putting your work behind a paywall”.  Something has closed in the retrenched administrative mind, that it can no longer grasp the concept of a commons, a place open to all like, like a public park, in which wonderful things can be accomplished on personal initiative, and not be for the immediate benefit of the proprietors of the commons.

The retrenchment argument based on the use of university facilities claims that somehow faculty work for administrators, and that administrators have a better grasp of public benefit than faculty do, as if faculty aren’t part–the core–of a university, but merely work for it, and aren’t authorized to decide how to use facilities, but must wait for administrators to approve every use.  I’ve dismantled the idea that faculty are merely employees of administrators.  But that doesn’t stop helpful lawyers from working up fine arguments that show how faculty can be transmogrified into mere employees, and that the university administration, as the employer, should then have every right to take all the IP from them that it can.  “Oh, oh, oh” say the lawyers, “and we will help you do that–try present assignments.”   It’s not like anyone stops and asks what might be good for university scholarship, instruction, research, collaboration, innovation, or economic development.   The assumption is that all these things will just trot on merry as pie if the institution claims everything it can, releasing only what becomes worthless to it.

This is the Dumbest Possible Model for research innovation:  own everything, release what becomes worthless.   It is an engine for making things worthless, destroying opportunities before they even form, and making things more difficult for everyone involved.  It is no wonder that folks working the Dumbest Possible Model are such self-promoters of success stories.  Each one represents a minor miracle of surviving even the Dumbest Possible Model!

A university, to own everything, has to impose such controls such that it is gradually becomes no longer a university, no longer has an independent faculty, no longer values informal interactions.   Such interactions become threats, with the potential to cause loss of rights. Collaboration becomes administration-speak for institutionally vetted agreements.  “You may dance, but first we must pour concrete.  Check back in a few months.”

A university, furthermore, in owning everything, cannot possibly manage everything for public access.  The corporate model of IP that the Dumbest Possible Model tries to imitate aims to accumulate and use IP to puff the company up and scare off competitors—or trade with them to redefine what the basis of competition will be—services, say, rather than infringement litigation expenditures.   In a company, new work is typically considered with regard to being directed toward a company purpose–such as making and selling product and services.   In a university, there is no such focus.  Whatever the invention happens to be, the university designates someone to try to make money on it–even if that is merely selling it back to the faculty inventors!  In the Dumbest Possible Model, classically, it’s impossible for administrators to know what is worthless.  Certainly if an inventor says her invention is worthless, that must be just a ruse to entice the university not to claim it, meaning the invention must be worth something.

The Dumbest Possible Model works against the diversity of models in place when Bayh-Dole was passed.  Those models were selective, moved IP out of the institution immediately, and used agents to assist faculty and student inventors.  The Dumbest Possible Model shows no clue that non-operating institutional ownership of inventions has a poor record of strong development or transfer of inventions.  That was the problem with federal agencies holding patents.  That’s now the problem with university administrators holding patents.  The Dumbest Possible Model scales claims and costs, not relationships and outputs.  It is, in the end an expression of institutional self-interest at the expense of scholarship, collaboration, and innovation, all the while claiming it is about these things.

From the Dumbest Possible Model we have seen emerge a new idea of personal conflict of interest that amounts to little more than an attack on scholarship.  In this new pernicious approach to conflict of interest, if one creates inventions or works of authorship, the institution should have first shot at making money with them.  Any other disposition is clearly operating against institutional benefit, and by pernicious extension, public benefit. Thus, to give something away is denying the institution of the chance to make money on it. It is even worse to license something privately for money, since the institution (so administrators will claim—even if not true) could have licensed that same something and made money.  Even choosing to work on something outside the university–in consulting, for instance, or simply not in sponsored research and not with university facilities–suggests a premeditated effort to deny the university the chance to benefit.

In response, university IP policies have moved from ones that emphasize “technology transfer” to ones that emphasize “ownership” and “commercialization”.  Technology transfer was simple:  move a capability for doing something new from the originating labs to others who want to use that capability.  Academic publication often does not do that–one needs also access to data and software and tools and experimental setups and expertise and qualifications.  One may also need assurances with regard to provenance of new technology–what is it based on?  What arrangements are presently in place?  What IP exists and who controls it?

A simple–and smart–university IP policy is “The university doesn’t own anyone’s IP unless someone requests that we do so and our faculty agree, and we agree.”

But that’s not the Dumbest Possible Model.   The Dumbest Possible Model uses buzzwords–“commercialization” and “economic development” and “public benefit”.   Trendy abstractions as goals.   Actual transfer of capability doesn’t really matter if one can profit from a speculative deal on the potential of a technology.  How much did gullible investors put in?  Har! Har!  How was the reputation of the university used to lead them on?  Tee! Hee!  The Dumbest Possible Model says–own everything, make money on what you can, make it all sound wonderful.  That is why “present assignments” are so appealing, and what is meant by “title certainty.”  If it is not so wonderful, then compulsion would appear to be the best alternative to choice.  It’s not a matter of title certainty at all, but rather institutional bureauklepticism–an urge to own someone else’s property, without any compelling argument for doing so.

Even when one dismantles the main arguments that are put forward–scope of employment, use of facilities, permission to participate in extramural research–no one in the retrenchment movement goes–“Oh, my, yes I see that we will have to do something different.”  Instead, they go, “But compulsory, comprehensive institutional ownership is a good thing.  Look at all the technology transfer offices and the thousands of patents they have taken from inventors–you can’t just let this all wither away. America depends on us.”

The same arguments were made, no doubt, for the slave trade.  “Look at all the ships–what will become of the captains and crews and their families if we cannot run our commercialization offices with title certainty, taking all the inventions we find?”  Or perhaps, less melodramatically, but more sad comedy, this is just more of the bozonet–which does not have a regard for the truth and therefore can never really lie.  It uses words, statistics, and “success stories” to preserve its social status, not to reason about things like technology transfer or innovation.  It would make some sense if a bozonet is behind the Dumbest Possible Model.  The Dumbest Possible Model is ideally suited for a bozonet.  Perhaps they have co-evolved in the niche created by the misinterpretation of Bayh-Dole.

There is no point in trying to fix up the Dumbest Possible Model, improve it in any way, support it with more funding.  It is such a flawed IP architecture that there’s no prospect for progressive process improvements.  It is actually not even worth the energy to dismantle it.  Just snip the requirement that faculty inventors must assign ownership of inventions as a condition of employment or use of facilities or participation in extramural research or whenever something has “commercial potential”.

Make assignment voluntary, or conditioned on choices that faculty make in their commitments to the university, to sponsors and donors, and to the public.  Let faculty decide the IP terms of sponsored research, or if the sponsor won’t negotiate, then the faculty investigators can decide whether or not to take the sponsor’s terms.  By not taking ownership of everything, the university greatly reduces its exposure to contract compliance issues having to do with background rights and improvements made by others.  The university is also able to more readily advocate for open licensing protocols—hardware, software, and wetware—just when it is becoming clear how important non-market, networked innovation has become.

Finally, making the little snip, snip that frees IP from comprehensive, compulsory institutional claims of ownership allows a university to act as moderator and steward of creative activity, rather behave as a partisan player intervening in research and collaborations for its own self-interest, or on behalf of beleaguered wealthy investors.  Even beleaguered wealthy investors might find some relief in the change.