When the discussion of “free agency” comes up in technology transfer, it is easy to get diverted into rather narrow formulations. In previous essays, I’ve pointed out that inventor ownership is the default in US patent law, and it takes substantial effort for an employer to change this outcome. One would think the standard–and effort to obtain assignment–would have to be even *greater* where the employer is a university and those involved are faculty, who for their research generally are not working for the benefit of their employer in assigned tasks–in essence, for their scholarship they are *not employees*. And this is by design. For public universities, the design is even more critical, as institutional control of scholarship means also government control of scholarship. What’s the point of academic freedom and an independent faculty if the state is going to step in and take control of what it considers the critical pieces of scholarship whenever it wants? Institutional control of scholarship is adverse enough for creativity and innovation; state control opens up prospects for abuse of authority and disruption of personal initiative that are even greater than in situations involving a private institutional claim.
I’ve also pointed out that ownership and control are only two of five key elements that figure in any intellectual property relationship. The others are money, attribution, and risk. Discussions that focus solely on ownership often distort the full relationship and end up in strange, murky territory that sounds good but that’s about the end of it.
Because US law starts invention ownership with inventors, universities have to address the question of how it comes about (1) that a faculty inventor might transfer invention ownership or rights to others, and (2) in particular why that ownership or control should pass to university administrators, and (3) why that transaction should be compulsory for faculty–(4) with particular reference to *innovation*–that is, for the use by others of inventions made in university research.
Use of Facilities. For instance, an argument drawn from “use of facilities” has nothing to do with innovation–it has to do with an implied arrangement involving “facilities”, for which the arrangement is, “you cannot use facilities to do your work unless you give up ownership of scholarship deemed valuable by administrators.” But that is not an argument directed at innovation, but at conditions on institutional allocation of resources. We might ask *why* some people advocate for those conditions to be placed on allocation of resources. Then we are back to asking whether resources are allocated to spark innovation from research, or to ensure that university administrators have their thumb in every pie–which is essentially the argument from employment–that an employer has the right to inventions made by employees, regardless of the impact on, say, innovation, and even (as in the case of faculty) the employer is not the employer for creative work.
Better at Patent Management. Similarly, if one wants to argue that administrators are uniformly better at patent management than are faculty inventors, then that is worth discussing. But even that discussion is not about whether specialists in filing patent applications or marketing patents for speculative investment are better at what they do than are faculty investigators or inventions–the discussion is about whether those administrative specialists–of which I have been one for much of two decades–and in particular just the ones that happen to work at a university where an invention is made–are better than anyone else that faculty investigators and inventors might draw upon to work with. For that matter, we can also discuss whether marketing patents for speculative investment is all that great as an approach to innovation for the vast majority of faculty inventions. Those are good discussions that we should be having, but generally are not. Such is the dismal state of university administrative thinking on technology transfer.
The Many Faces of Commercialization. “Commercialization” is a third frequent argument in favor of institutional control. Commercialization, however, is deeply ambiguous. For university administrators embedded in technology licensing office, “commercialization” generally means “find a speculative monopolist willing to take an exclusive patent license and pay royalties, preferably on sales of product.” That is, commercialization is conceived as a product-making activity that results in payments to a patent owner. Why else, goes the thinking, would anyone have a patent otherwise? Well, there are lots of reasons otherwise, but they are not ones of much interest to university licensing offices. Even more broadly, commercialization does not necessarily depend on (a) patent rights (b) products developed from university research results or (c) licensing activities, especially of an exclusive nature. Commercial use does not necessarily require a product to be produced first, especially when the invention is a method rather than a machine or material. And commercial use is also a form of “commercialization”. Further, commercial products can be created without an exclusive position–for instance, products built on open standards–and may even benefit from interoperability and multiple manufacturers stimulating competition and speeding up conservative purchase decisions. Finally, activity leading to commercialization can be viewed as an activity of industry. Universities don’t “commercialize” much of anything. For that matter, “licensing” doesn’t “commercialize” anything.
Thus, much of the problem in the discussion around freedom to innovate or free agency is that university administrators use “commercialization” in public discussions as if it means a general public good, but in practice their version of commercialization means an effort to turn all substantive bits of scholarship into properties offered to speculative monopolists from which to create products to be sold, who pay for the privilege. Speculation, on its own, also is not “commercialization”, as it often never leads to a product that is sold in a marketplace–even if there is payment to the university patent owner as part of the speculative jockeying. Commercialization means use in commercial settings and/or such use in the form of product sold commercially. Licensing to speculative investors may indeed be a “first step” toward commercialization, but the speculative investors still have to execute on a program of development for that commercialization to take place. One step out of bed does mean one has got around the world.
If we eliminate as rationales flawed arguments such as “use of facilities otherwise already provided for use,” “better than some at doing something narrow”, and “commercializing meaning offering patent licenses to speculative investors”, then we can get down to looking at how faculty inventors (and faculty investigators before they other others in their work group invent) might manage their inventions, and what sort of argument might justify requiring them to assign ownership to their university and not to, say, a non-profit or a national patent management organization or a specialty invention support firm, or a big corporation, or their own startup company–or letting the invention go into the public domain.
Two Lines of Thinking. There are two main lines of thinking. In one, faculty inventors own their inventions and make invention management decisions consistent with the commitments they have made to research sponsors, the public, and their colleagues. This can be called “freedom to innovate”. This was the classic model under which university-led inventions flourished. That approach created Research Corporation, WARF, many university-affiliated research foundations, informed the model for the National Science Foundation, and led to the Bayh-Dole Act. This approach is “invention in the context of institutions” rather than “invention taken over by institutions”–thus, leaving the freedom to innovate free from early claims of institutional control–even if institutions soon enough will find a way to gain access, and draw benefit from, inventions.
In the other, faculty inventors are required to assign their inventions to the university at which the invention was made, but the university in turn delegates to them the authority to identify the agent that will manage the invention rights. This might be called “assignment/agent choice”. In assignment/agent choice, the question is: why is an administrative “specialist” in obtaining and/or licensing patents delegated with the authority regarding which agent a faculty inventor must use, rather than the faculty inventor, who is also a member of the university, as well as an employee, too? That is, in an assignment/agent-choice model, the rights go to the university, but the inventor decides whether the university also will be the agent for any patent work, or whether the university will direct that work to an outside agent. The assignment/agent choice approach aims to manage innovation in the context of institutions from within a given institution by seeking to keep the delegation for creative oversight with the creative talent rather than shift it to administrators aiming to serve institutional values over innovation values.
The Conflict of Interest Conflict. Indeed, this tension between service to the institution and decisions favoring innovation is critical. Universities craft policy statements that demand institutional loyalty. The University of California has a policy statement that makes it unethical for employees to do anything “for a higher purpose”. The highest purpose is that stated by university policy. The University of Washington has a policy statement that “The first obligation of the faculty and staff is the preparation for and carrying out of official university duties” (See Executive Order 57). There’s still a bunch of ambiguity about what those “official duties” are, but administrators are adamant that those duties come first.
One of those duties, apparently, is to assign inventions to the university, to be placed at the disposal of the technology licensing operation. It’s just that such a duty does not arise from employment of faculty, and is certainly not “official” in the sense of “within the duties of being a member of the faculty” at the university. I’ve worked through the problems of the “condition of employment” argument elsewhere. Here, the point is that universities as institutions establish policies that tend to identify an institutional benefit as the highest calling for employees. But why should that be, especially for universities, especially for faculty at universities? Why is the highest calling institutional self-interest? If the highest calling is indeed institutional self-interest–preserve and advance the institution at all costs first–then perhaps, yes, universities should be run as if they were private corporations, especially that kind of private corporation that makes it a matter of policy to look out for itself first, and not for, say, a benefit for its customers. But if the highest calling is elsewhere than institutional self-interest, well, then the policy is rot.
For innovation involving research expertise and findings, it’s difficult to see how institutional self-interest coming first is a good starting point. The problem, then, is stark: if faculty investigators and inventors see opportunities to advance innovation and these opportunities do not run through institutional self-interest as defined by patent managing administrators, then the faculty folk are asserted to be in a conflict of commitment. They are supposed to be loyal to the institution first, and only then think of other things, such as public service. If a faculty inventor pursues a personal opportunity, that’s even worse–if there’s payment involved, that’s a conflict of interest. If the faculty member does not charge, then that’s causing a loss to the institution where it could have charged for the service or for related intellectual property. Administrators define institutional self-interest as the highest duty, and wrap “ethics” policies around this definition, and then view any other activity as a violation. If a faculty inventor pursues a private opportunity, why that is self-interest ahead of institutional interest. Violation.
From another angle, of course, the claim of institutional self-interest as the highest duty for faculty is itself fundamentally flawed. The university as an institution, it can be argued, exists to serve the faculty rather than own them. In this view, it is what faculty choose to do within the context of their scholarship and instruction that defines the directions a university as an institution goes. The faculty do not exist to serve the institution, but rather they are how the institution changes and adapts to the events and conditions around it. The highest calling, in this view, of faculty is to do what faculty do–and that doing is personal and independent of institutional claims, even as individuals make commitments to one another, to their community, and to faculty values–that is, to institutional values. The institution’s values arise as a consequence of individual commitment: those values are not imposed by the institution on otherwise mindless and perverse masses of faculty who would not otherwise comprehend what is expected.
If every decision a faculty member may make has to favor the institution in some overt way, then there is no hope for most innovation activities. The idea that administrative staff have greater loyalty to the institution–to following protocols, to making money for the institution, to making the institution the focus of activity–has next to nothing to do with how innovation comes about in the big, wide world. Yes, there is a pathway by which new ideas and discoveries can move through administrative hands and come to matter. But it is only a superhighway in the mouths of administrative apologists; in real life it is a tiny pathway that serves less than 1% of the inventions that move through it. In essence, the institutional claim to manage faculty inventions selects for success those inventions that are of sufficient strength that they become something *despite* the institutional involvement! That is, these are successes not because the administrative system is there, but they are the *only* successes because the administrative system nearly successfully suppresses all others–including those that would follow a similar course to the “successes” but through different pathways and connections, and including also those that would follow very different courses, demonstrating possibilities, establishing platforms and standards, sparking variations and open development, gaining critical mass before any thoughts of “commercialization”, and adding to the public domain library of resources.
Three Pathways. We may then recognize three general pathways:
(a) The speculative investor pathway via an institution-dedicated agent.
(b) The speculative investor pathway via other agents.
(c) The great range of pathways that do not involve speculative investors.
The opposition to “free agency”–meaning, the assignment/agent choice model–argues that the advocacy of free agents is for the faculty inventor to act as his or her own agent, attempting to manage invention rights, file patent applications, market inventions to speculative investors, and negotiate and draft licensing deals. One can see that argument against is against a tiny bit of pathway (b), but then making that tiny bit stand for *all of (b)*. The argument is: if we can find a defect in any member of the class, then the whole class fails. Of course, if that same argument were used on (a), then basically AUTM would cease to exist in a matter of hours.
The argument for free agency is not that faculty can outgreed their institutions by doing deals personally without assistance. Nor is it that faculty can handle personally the 50+ technical subsystems that it takes to run a full service university IP office. Nor is it that faculty can do “better” what a technology licensing office commits itself to do. The argument is not interested in these things–even where, assuredly, it is true that faculty could do any or all of these things individually better than the resident administrators assigned to make the institutional attempt. No. The free agency argument is interested in how breakthrough networks form, and in particular how they are extended and activated when a key research event such as a discovery or epiphany or invention is made.
Suppress Personal Breakthrough Networks. Here, the anti-free agent argument shows up as a closing off of the discussion: “forget about individual breakthrough networks that may already be in place, or could be readily formed: those networks are no good. The only network that matter is the one that passes through the institution, and the institution sees as its mandate to create a breakthrough network specific to speculative investor licensing for product formation, paying a royalty to the patent owner, for which activity much time, complexity, and expense can be anticipated.” The anti-free agency argument is an argument about ignoring, suppressing, and destroying personal breakthrough networks and substituting a yet-to-be-created-by-“marketing” breakthrough network that is activated by a patent licensing agreement. This substitution only appears “efficient” if one has little regard for the personal breakthrough networks of faculty teams of investigators, and no awareness at all of other methods by which speculative investors might come to take an interest (that is–other than an institutionally offered royalty-bearing exclusive license with diligence demands), and no regard for any other methods by which commercialization might come about downstream–methods that do not have to start with either a pitch of a patent license to speculative investors or any institutional involvement whatsoever.
Inventor Loathing. It is in this way that the argument made against “free-agency” is characterized properly as “inventor-loathing”. The argument against asserts that university faculty are clueless and isolated, unable to recognize their limitations, unable to choose professional services to assist them, unmotivated to act, and incapable of designing new approaches that work for them and their research objectives. One has to accept this cluster of assertions about faculty capabilities before the anti-free agency argument even begins to make any sense–and even then, one has to ask–even if faculty lacked breakthrough networks, would the appropriate response be to *ensure that they never could form such networks in deference to institutionally directed patent licensing*? Or might it be to provide resources and administration that allowed faculty to form such networks, experiment with them, and validate those that advance their interests–and with that advance the interests of the university as the supporting institution. The sports coach does not demand that all players work to advance the interests of the coach. No–the coach’s interests advance when the players learn to advance their own interests through the success of the team. The team is the social reality. The institution that formalizes the team and hires the coaches comes after. The former is sport. The later is sport business. The business without the sport becomes a fraud, then a parody of itself, then dies.
The Burden of Institutional Contracting. The argument against free agency stipulates that a contract with an institution is required for any faculty invention to be used or developed. Contracts with universities, especially public universities, tend to be some of the most difficult and convoluted ones to negotiate. Two public universities in different states can easily descend into bickering over which state’s governing law will control–can’t be yours, since we are the state of Washington. Can’t be yours, though, because we are Florida. Yeah, right: the institutional baggage around the contract more than outweighs the fundamentals of the relationship. Personally based transactions–involving the inventors, or their research project and not the institution–are often much more direct, carrying less institutional baggage, and able to transact in a timely manner. Done with an expert agent–or even a team of such agents–such deals can stand up every bit as well to the contingencies of the marketplace as ones done through institutional processes, with institutional policies, with institutional counsel looking out for “the institution” and often preferring nothing happen at all than that anyone take a risk.
An institutional contract also has to consider the impact of the transaction across the institution. That means dealing with background and improvement rights in other labs (or even on other campuses in the same university system), what researchers in other labs and departments can do once an exclusive arrangement is in place, and how those researchers interact with the counterparts at other universities, in government, and in industry. The effect of moving ownership, by policy, to the institution creates a huge bundle of problems that then have to be resolved–and many simply cannot be resolved without abandoning academic freedom, independent scholarship, and open laboratories–the very things that make university research what it is. The remedy for such a move to institutional ownership is not to create a shop staffed by expensive professionals needed to understand the complexities of the *problem created by policy*–but rather to assign the invention to another agent–outboard as it were–that does not have the overhead necessarily carried by the institution.
Of course it is true that most faculty could not fathom the nuances of the problems created by institutional policies that are themselves ill conceived and often poorly drafted and implemented–the lingering question, writ large on the wall, is “Why would anyone *want* to aspire to such knowledge?” In this way, the anti-free agency argument is really one aimed at preserving ghastly university intellectual property policies and the practical problems they create, casting the whole thing as a need for specialization that faculty cannot achieve. All true, at the expense of institutional flexibility, policy development to meet emerging opportunities, and changes in licensing practices and administration. The “carefully crafted scheme” of US university technology transfer offices is one that has no chance to change. It is boxed in by the very policies that its advocates have created, defended with arguments that are increasingly shown to be invalid, such as those in Stanford v Roche, and supported with what can only be described as vanity metrics. It may be that one needs to measure some things one intends to manage–but the vanity metrics produced by AUTM are not used to manage anything other than a public perception of “success” even where there is vast fields of disaster.
It is little wonder that an organization like the Kauffman Foundation or the American Association of University Professors or IP Advocate might be horrified at what it discovers is happening under the hood of that “carefully crafted scheme”. And these organizations are friends of innovation–they are working for better approaches, and they are informed, and recognize the challenges in innovation dynamics. And what do they get for their efforts from organizations like AUTM? Big public smackdowns–not smackdowns with any substance, mind you, but ones aimed at disparaging the messengers rather than accepting that their message is timely and necessary. There should be a much more forthright discussion of the conditions under which institutional licensing programs now operate. Then some of these matters regarding free agency would show up in a much different light.
Isolation for Alternatives. The argument against free agency also isolates the university faculty from the wide range of alternatives available in (c) above–the networked, non-market approaches, open business models that start with use and interoperability and reciprocal competition, lean startup strategies, and working the variations before determining a course of product development. The strategies of requiring both institutional ownership and an institutional agent for licensing necessarily–and we might add dramatically–reduce the diversity of approaches available to inventors. For innovation–those changes in practice, technology, and organizations that come from previously unknown or unpracticed stuff–a reduction in diversity, for all the purported “efficiency” of focusing on whatever it is that administrative staff want to do (or are ready to do, even if they don’t really want to), is devastating. Here, perhaps, is where Walter of Chatton has the advantage over William of Ockham: the diversity of things should not be unnecessarily reduced.
Where we don’t know in advance what might arise, and we must deal with changing conditions, our innovation management will do well to choose diverse, responsive, engaging approaches over those that are anchored in policies, processes, and singular focus on institutional self-interest.
A Great Relief. The assignment/agent choice model accepts that in a university, for whatever reason, the faculty may choose to commit their inventions to university ownership. The assignment/agent choice model decouples that decision regarding ownership from a second decision involving the agents that might facilitate breakthrough networks and innovation–regardless of whether the institution makes money first and foremost through exclusive patent licenses. This separation of choice of agent from ownership is crucial. Whatever the terms of employment, and the commitments to assign ownership, who are the best people to move forward innovation activities that will result in the practical application or development of new stuff, assisted by the stuff that gets done in university research? The thrust of the assignment/agent choice model is to keep the inventors and their breakthrough networks front and center, especially in the critical time from the realization of a significant research event to the time that the next stage of a breakthrough network is identified and activated.
The anti-free agent argument can only imagine such an agent as a proxy for the institution’s own patent licensing shop. The implication that the folks opposed don’t care for is that the institution’s own patent licensing shop isn’t up to doing the work. Stanford and MIT get trotted out as instances of great licensing shops, and there’s no questioning that bit. But once one gets past maybe 20 such shops, there are another 180 or so universities that have to deal with inventions. For those, pretending to be Stanford or MIT, flush with royalty income from doing a tremendous deal maybe once a decade, just won’t cut it. The rich programs built their reputations and practices on the strength of a few deals–the money came first–and those licensing offices that haven’t simply cannot use the same strategies that a Stanford or MIT uses now. They have to use other strategies, suited to their local conditions. The blunt reality is that most such licensing shops have no way to deal with the majority of the inventions they see. This is not a criticism. This is something of a great relief.
These offices do not have to posture that they can do more than they really can. They do not benefit by IP policies copied from UC or Stanford or MIT that set expectations impossibly high and demand “full service” morning to midnight even when only a decent continental breakfast is all that’s going to get provided. It is impossible for a small office of licensing professionals to handle the range of research conducted at even a modestly-sized research university–trotting out three or four people for $100m/yr of research spread across perhaps 500 or more discrete projects–and multiplied by six or seven to provide the envelope of currency–so perhaps 3000 projects in play and perhaps 100 inventions spread across fields of study, industries, and positioning within industries, played among professional practice, corporate use, and investment in product–and there is just no way for four people to deal with the scale and the range. There is nothing in the anti-free agency argument for them, other than the banal warning that expecting an outside party to try to do what is impossible internally is not the answer.
Assignment/Agent Choice Scenarios. Given all this, how does the assignment/agent choice model operate? That is, rather than fixate on trying to find a clownish way for the model to operate, and then criticize that way as if it is the only way, how does it work in good practice?
Consider this situation: a university A through its sponsored projects office and licensing office has formed a working relationship with ten companies in a research consortium. The consortium work has produced some inventions that have been licensed to the consortium member companies under standard terms that everyone has worked out. A research project funded by the government at another university B has made an invention that would greatly benefit the consortium. How should that invention be managed?
The anti-free agency argument is that university B, which hosted the work, should both own and manage patents. That means, B has to work up some sort of commercial potential justification, identify companies that might be interested in taking a speculative exclusive license, and hope to land a deal. In doing so, university B aims to disrupt the collaboration created by university A. But the research team at B already knows about the consortium work at A. If B’s invention were passed over to the consortium via university A’s IP office, as if the invention had be made in the consortium, then it would (a) have a ready audience of companies to review it for potential; (b) have a standard license already worked out for transfer; (c) have a pathway by which benefit could flow back to the inventors and contributing institution. All that’s needed is for this to operate is that A accepts inventions for management from B, and works a deal that rewards B’s research efforts and inventors and shares back some part of the deal with B.
That’s the sort of stuff any agent is prepared to work with. The approach is efficient because it uses a set of relationships already in place. Does it advantage university B? Not in the sense of putting B in a position to make a lot of money by encouraging a company to break from the consortium or one outside the consortium to block further development at university A. But in terms of making things simple–use a standard, already approved license cover, follow existing working relationships (a channel), and share a portion of any earnings in the channel with the proprietor of the channel (something that comes with the territory)–having A work as an agent for B makes a lot of sense.
One can run variations on this situation–University A gets a big government grant and subcontracts out most of it to a “team” of institutions, each doing their piece (and under Bayh-Dole, A cannot demand an interest in the team’s inventions as a condition of the subcontract). Anyone in this ecosystem who gets a deal with one or more companies could then serve as the agent for the rest, piping multiple assets through an existing arrangement, on whatever agent terms that the providing institutions (and their inventors) require.
Or consider: Five investigators at different universities are asked by a nonprofit research organization to work together toward a mitigation for a disease. The investigators designate the non-profit to act as the agent for any inventions they make, to allow coordination and to prevent conflicts among the various universities’ policies, royalty sharing schemes, and licensing preferences. The non-profit in turn could contract with a professional agent–or with one of the university licensing offices–to manage its portfolio if it does not have in house capabilities. Again, another instance where an agent approach makes a lot of sense, and an every university for itself pitching an exclusive license doesn’t.
And we aren’t yet touching decisions regarding interoperability, standards formation, open innovation practices, and other strategies that do not benefit from a default hope for an exclusive product-producing, royalty-paying investment.
Bayh-Dole Pre-approves Agents. In dealing with agents, there are a variety of possible relationships. These, too, get lost in the present disparagement of the idea of the assignment/agent choice model. An agent may act as proxy for an institution–and that certainly will get the worries up among risk advisers and legal counsel. However, agents may also work by taking assignment of an invention and working under a contract that may involve granting a general public license for research uses, or a grant back for specific rights to be managed locally by the university (through its licensing office, or through the investigator’s project). In such a case, the agent acts on its own behalf, and does not represent the institution directly. This, of course, the model that was developed using the once cutting-edge idea of the affiliated research foundation. Bayh-Dole pre-approves the assignment of inventions to the host university. But it also pre-approves the assignment of inventions to any organization with the management of inventions as a primary function. Bayh-Dole really doesn’t care whether the assignment path moves from inventors to university to agent, or directly from inventors to agent. What Bayh-Dole cares about is whether anything inventive gets used, using the patent system as a tool for promoting that use.
In essence, for federal funding, Bayh-Dole embraces an agent model. It does so by pre-approving the use of agents, whether by assignment or under license or by means of an agency agreement (meaning, the agent performs particular services but does not have to itself have a right to practice the invention). The diversity of pre-approved relationships enabled by the Bayh-Dole standard patent rights clause is really quite impressive. Bayh-Dole anticipates and enables diverse forms of free agency. Yet it is university patent administrators that argue against all of this. One might be moved to think that for all the love expressed for Bayh-Dole, the university technology licensing crowd loathes Bayh-Dole and wishes it were something else entirely–such as a vesting statute that simply stripped inventors of ownership told them to get out of the way of institutional interests–just what some federal agencies were doing before Bayh-Dole, and in part why Bayh-Dole was passed.
Freedom to Innovate. In a freedom to innovate approach, universities do not need to take ownership of inventions or get in the way of managing inventions–processing forms, deciding on value, trying to do impossible marketing, always insisting on acting alone, for the self-interest of their own university, and not to help any other university, or any other inventors, or any other companies, unless, of course, there is a paying relationship that privileges the home university. There is no institutional policy on altruism. There are only winners, losers, and patsies–the losers that willingly help the winners and get nothing for it.
However, a freedom to innovate approach does not mean, again, that every inventor is “in it” for his or her own personal interests without regard for commitments made or institutional interests. It is perfectly fine for a university to insist that an agent be chosen or the work taken outside the university and its programs, if the work is going to be of a commercial nature. If the inventors don’t make a decision, then there can be defaults for research sponsors. For federal funding–which is often two-thirds or more a research university’s research funding–it’s easy because the defaults are already mapped out in the standard patent clause and the federal requirements on intangible asset management. If the inventors don’t choose an agent, then the funding agency may obtain title, if it so desires, by calling in the commitments made by inventors under the (f)(2) agreement stipulated by the standard patent rights clause. If the agency doesn’t want title, and the inventors wish to retain title, then 37 CFR 401.9 kicks in, and the agency treats the inventors as if they formed a small business for the purposes of negotiating a deal.
The university does not have to have an IP policy, an IP office, or funding for filing patents to operate under the federal defaults. Again, it should come as something of a relief for most everyone, especially in light of the claims being made that to comply with federal regulations, a university has to have a policy demanding ownership of inventions, or that if universities do not make such policy demands, the technology transfer system itself will come tumbling down, and as a result university research will simply not get used–all of which is bombast. The discussion around freedom to innovate and assignment/agent choice approach is a discussion about getting past such bombast.
The Money Gorilla. Of course, the gorilla in the picture is the money–and in particular, the institution’s portion of the money. Running a TLO gets expensively quickly. Deciding to file patent applications without companies expressing an interest gets even more expensive. That outlay in turn runs up the need for quick money back, and that pushes (though it need not) toward proprietary over open, and speculative investments over planned ones. In a freedom to innovate environment, there’s no demand for institutional ownership, and therefore no expectation that the institution has to do something with what it has demanded. It takes on projects because it is asked to do so, and the project appears to be something worth doing, and within the capability of those who would do it. In an assignment/agent choice model, institutional ownership does not translate into control by the TLO. Of course, there is the cost of filing a patent application, and a need to get that done quickly. But if inventors identify organizations willing to do that, and relieve the university of the obligation of doing so, then so much the better.
Multiple Inventors. Where there are multiple inventors, inventors learn to agree or move on–just as academic collaborators do over authorship in journal articles, just as investigators do in developing grant proposals and deciding on subcontractors. They don’t learn to agree so much where an institution picks their rights and choices away at the outset, with the implication that in addition to being clueless, they are also incapable of working anything out on their own. Where there are prior commitments, participants accept those commitments–to a sponsor, to a public, to each other–as part of making breakthrough networks, as part of the progress of scholarship, as part of the opportunity to hitch a ride on something that might become important, if not valuable, to the community. What an exciting place it can be, where there might be multiple agents available to take on new work–some working with startups, some with open platforms, some with major industry players, and others with small companies that can adopt more readily than the bigs.
Local Invention Prisons. The arguments against free agency regarding local development also fall flat. Breakthrough networks are what they are. There is no indication that university ownership of patents, or restrictions on inventor involvement in the choice of agent–and the operating model that agent uses–has anything to do with where economic benefit lands for a region. Being known as an invention opportunity exporter might be the biggest draw of talent a region could have, and talent flooding into a region might be expected to bring with it economic vitality. In contrast, envisioning each local region around a university as a kind of invention opportunity prison, competing with every other such prison, does not have a taste of vitality to it. It is backassward to force university research findings to local development rather than to build the conditions under which local development competes successfully for attention. Stuff that has to make it Silicon Valley or Toronto or Singapore to succeed is going to have to get there somehow, no matter what someone in Ann Arbor or Pullman or Lincoln wants by way of keeping stuff local. On the flip side, if a Pullman becomes known for developing even one area of technology–technology and talent from all over the world will find its way there, too. One doesn’t have to hold onto everything–just enough to create a real opportunity–and the best way to hold things is those things that choose to stay–that is, by starting with freedom and choice, rather than institutional control and set processes.
Diverse Freedoms to Innovate. The freedoms to innovate that are involved in agent models are diverse. Ownership starts with the inventors. The question that matters is how and when that ownership should change hands. What is the psychology of ownership? What happens when an institution comes to own something, as distinct from serving as a steward on behalf of others? In freedom to innovate environments, these questions are real, and the solution spaces are worth exploring rather than reducing to a policy demand. What then, too, about control, especially early in an invention’s life? For some innovation, losing central control is critical for success. In others, central control is a precondition for establishing consistency and trust in early adopting relationships. There is no instruction manual for how control should be distributed, but if we prevent control from being distributed, we will never learn. We will stuck with a thirty-year old model that doesn’t permit any competition, exploration, or innovation in innovation management.
The freedom to invent approach limits institutional overhead, allows research investigator commitments and insights to take precedence, and develops specialty agents to meet specialized opportunities. The assignment/agent choice model as a variant accommodates institutional ownership decisions, but mitigates the institutional overhead that comes with the attempt to standardize processes while meeting everyone’s needs–which is in general impossible, even at the big university TLOs that swear they would never lift a finger to help researchers at other universities, nor in turn ask for assistance from others. The effective approach starts with expanding the choices that university investigators have in developing their breakthrough networks, adds cautions with regard to the use of university resources for commercial operations by recommending the use of agents, and then focuses on developing relationships with potential agents and opening up one’s own breakthrough network for use by others. It’s a pretty neat approach, blending what we learned through 75 years of freedom to innovate with the things we have learned since.
The Value of Choice. Even the simple difference of having choice makes a world of difference. Choice reveals character. Choice expresses personal initiative. Being chosen to work the IP for project is worlds away from demanding that role. The starting parameters for the relationship are entirely different–down to a discussion of the ground rules on which the relationship will develop. Choice is at the root of innovation, which rubs against a status quo and gets it to change, or changes things out from under it, or obsolesces everything. Universities have a special role in all of this of being institutions that are home to independence–which allows for the choice of tight working relationships with companies in some settings, and challenges to those same companies in a lab two doors down the hall. Even if 90% of inventors choose their resident TLO, it is no small deal to be chosen rather than self-assigned. For the other 10%–that freedom may be essential. There will be failures, and there will be successes in that 10%, but the operating environment for the TLO will be vastly improved, for the vast majority of TLOs, simply by allowing investigator choice to lead the way.