1962 University of Arizona patent policy allowed inventors to choose their agent

In Neal Stephenson’s Anathem, in an earth-history parallel but someways upside downed from our own, there is an order of “avouts” or knowledge-monks called Lorites. A Lorite is “A member of a Order founded by Saunt Lora, who believed that all of the ideas that the human mind was capable of coming up with had already been come up with. Lorites are, therefore, historians of thought who assist other avout in their work by making them aware of others who have thought similar things in the past, and thereby preventing them from re-inventing the wheel.”

Here is a bit of lore from the patent policy of the University of Arizona, circa 1962.  It contemplates  patent decisions made by a Coordinator of Research who reports to the President of the University. I would guess that would be like a Vice Provost for Research these days. Disclosures of inventions are sent to the Coordinator via department heads and deans. In turn, what does the Coordinator do?

(c) The Coordinator of Research will forward the invention to the Arizona Research Foundation, the University of Arizona Foundation, the Battelle Development Corporation, the Research Corporation of New York or other authorized organizations, as selected by the inventor; or if the President of the University considers that the idea is of insufficient value for consideration, he may release any University interest in the idea to the inventor.

The Arizona policy identifies four possible invention management agents, two state-based and two with national interests. While the university may claim ownership of the invention, the university delegates to the inventor the choice of management agent. Well, now. This is essentially what the Kauffman Foundation proposed in the Harvard Business Journal, which ran the idea as #6 among the top ten “breakthrough” ideas for 2010. It appears that Arizona was so far ahead of its time that it managed to forget what it had going.

As late as the 1990s, the University of Washington patent policy listed multiple possible agents–the university’s new Technology Transfer Office, the Washington Research Foundation, the Washington Technologies Center, Battelle Development Corporation, and Research Corporation. But the Washington policy did not give the inventor the outright choice, though for a while invention disclosures could go directly to the WTC, and there was an expectation that the WRF would see all the disclosures that the OTT received, and get its pick of the pot.

These sorts of policies show the distinction between ownership and control, two of the big five elements of an IP relationship (the others being money, attribution, and risk). This distinction is obvious in invention management when it comes to licensing. In licensing an owner of a patent distributes permissions, that is control, by means of licenses. The permissions are, really, promises not to sue for infringement, but in effect they transfer (or share) control of the invention from the owner to the licensees. It’s a fundamental concept. Similarly, simply owning a patent does not necessarily give one control over the invention, since the invention may be an improvement to an invention patented by someone else, in which the owner’s invention, if practiced, will infringe the prior patent owner’s rights. Ownership, but not full control.

This same distinction is at work in dealing with the relationship between an inventor and the university. An invention may be owned by the university, but there’s still the question of who should make the management decisions about its handling. In a world unsullied by a single vision of what must be done with a patent, there are actually a number of concerns, beyond ownership and filing a patent application. There are decisions about the drafting strategy to use, the claim construction, the filing strategy (provisional then utility with concurrent PCT? direct to PCT and come back around to a US national phase? multiple provisionals to be combined into one or more US utility applications?). There are even decisions about what law firm to use, and what attorney. It can make all the difference to match an attorney experienced in the art of the invention with inventors that get along with the attorney.

For licensing strategy, too, there are choices. In the old days, like in the 1960s, universities still talked about taking patent positions to dedicate inventions to the public, or to use patents to prevent folks in industry from blocking research by grabbing a patent position in an improvement and forcing all development roads through their monopoly. Now of course universities desperately want to find just exactly this sort of monopolist, if not be that monopolist themselves. Some universities appear to thrive on this sort of thing.  Read about some findings of fundamental research, then mobilize to do all sorts of engineery or sciency things with the ideas, taking advantage of their inside track with government funding and file a bunch of patent applications on whatever appears to be the directions things would go to get in the hands of industry. In other words, see where things are headed, and get there first, with a patent right, to disrupt the flow of information and collect a toll–but call it “technology transfer” and swear that without such actions, simply nothing would ever get done. It is not quite the same thing as discovering stuff and looking for help to develop it.

The choice of patent strategy often matters to more than just the inventor. Other investigators also have a stake in what happens. So do graduate students working in the lab. If a patent is licensed exclusively to a company, then that exclusive licensee is the only place beyond the university that the grad students can practice this invention that they have learned, and even may have contributed to. The principal investigator, who leads the sponsored project, may have objectives that have to do with future research, or building industry relationships, or establishing standards. All this can go down the tubes if a licensing operation operates on a patent portfolio model where everything is shopped for big bucks on exclusive licenses, and a few lucrative deals pay for a lot that has no play in such a model and is left to rot. It is not so much “winners pay for losers” as it is “a lot of these become losers because they are so poorly matched to the effort to make big bucks from exclusive licensing.”

Merely putting the invention into a “commercialization” office that demands a product for sale or startup company (to be flipped from gullible investor to gullible investor until it is bought to get it out of circulation) from every invention is certain death. Even for those offices that plead that they are willing to try all sorts of things, the reality is that the exclusive royalty bearing license or an equity deal with a startup are the priorities, and nothing will be readily positioned for anything else until these options have been exhausted. By that time, a lot more than options are typically exhausted–such as the opportunity itself.

The range of strategies available, then, for patent work that is intended for licensing rather than exclusion, can be quite broad. One can license make/use rights non-exclusively, creating a practice commons, and deal the sell rights independently. One can contribute an invention to a standard, using either a public license or a F/RAND strategy. One can slice with field of use, or territory. One can cross-license or allow sublicensing, or even give incentives for lots of sublicensing–use = success and all that. One can use patents to control quality, to establish trademarks, to choose early associations, to gain access to other technology, to bring competitors together, to limit industry monopoly positions  by inserting art into the patent literature. I could go on, but you get the point.

We can see in all this then another effect of Bayh-Dole, or perhaps of the faux Bayh-Dole, or perhaps of the expression of desires by the folks who liked the faux idea of institutional domination of inventors endorsed by federal law because it ran so well alongside the idea that patents were about making money for the institution. That’s why “commercialization” has been appropriated as a term used in university licensing shops–it’s code for “making them pay more because they sell a product.” The royalty that’s big is from a product that is selling. To make new knowledge merely accessible so that it gets used is so ho-hum in comparison.

The challenge for universities from the start of all this interest in inventions and patenting has been how to deal with the base expectations of the users of the patent system: to make money by excluding others. These two virtues of the patent system are opposed to the purposes of university life. Or were. Archie Palmer points out that some universities refused to take on research if there was a prospect for making patentable inventions:  the research wouldn’t be fundamental enough. Not these days. See the industry road map, get on it, use government funding to get far enough ahead of industry, wait for the poor fools to show up. Shake ’em down for a patent hit. Threatening infringement is a great way to run up the “value” of the patent but it does nothing for the use of the invention.

The challenge was deepened by Bayh-Dole. Bayh-Dole said, in effect, to the federal agencies: “let inventors and their invention management agents put some of the federally funded inventions into their existing, diverse approach to invention development.” Inventors got to decide–if they didn’t decide, then the federal agency could go back to deciding, or not, and let the inventors do their thing without an invention management agent.  This would have been the grand opportunity for universities to think broadly about how universities ought to use the patent system to advance research, education, industry involvement in research and education both, and the like. How might a system about money and exclusion be re-purposed to promote the use of inventions so that their benefits were available to the public, and at reasonable price? That is the question.

The faux Bah!-Doelers though couldn’t tolerate this sort of thing. Instead they proceeded to attack the very system that had been pointed to as the basis for Bayh-Dole.  Take all inventions, manage them for maximum money and maximum institutional benefit, enlist faculty inventors to this progressive way of thinking by associating it with “entrepreneurship” and “economic development,” and wink at the idea of Porsches in the faculty parking lots, as if the mandate of Bayh-Dole was to exploit greed culture to supply universities with slop funds to gladden administrative budgets.  Oh, but call it “commercialization.”

All of this is not, really, the fault of Bayh-Dole. But university administrators found a ring of power and couldn’t help themselves. They believed their own arguments to get Bayh-Dole passed: there were federally claimed inventions that if university administrators and their patenting friends could just get at them, they could make money, and money is a universal solvent for sticky problems. The administrators worked up a rhetorical model, the little linear model of technology transfer, the mini-me of the great Linear Model that argued that new products come from basic research becoming applied research becoming development. The administrators positioned the mini-me little linear model between basic and applied research and development, and argued that what was missing was a patent license that paid money to the universities.

No one could tolerate the idea that maybe things weren’t related at all–that basic research was just that, and applied, too. There was no great arrow of time from basic to applied, or that by throwing more money at it all, that arrow would appear, or time would move faster.  No one could imagine that inventive stuff might happen in a university shop, not a university laboratory, and that research might straggle along to find out why, later, often decades later. Or that there might be applied research first, then some mistake and an epiphany, then some development, that fails, leading to some basic research that runs in parallel with a restart on the original applied research, that along the way hits on something entirely different, which allows the adaption of an existing product to a new use. Yeah. Simple. The mini-me rhetoric is:  it doesn’t have to be this way. We can straighten it out so that for every jump from applied research to development, there is a tax to be paid to a university for a patent. This idea apparently seemed really keen.  University licensing offices would be essential to the commercialization process.

The challenge is still there: how should universities use the patent system to promote the use of inventions, and not necessarily, the financial value of holding patents? That is the discussion that folks were having in the 1930s, and in the 1950s, and in the 1960s. That’s the discussion that should have taken place in the 1980s and beyond, and didn’t. People turned to the faux Bayh-Dole, which ended the discussion with the claim of institutional ownership and control. Investigators and inventors and independent invention management agents became things of the past, known only to the Lorites.

The Stanford v Roche decision does more than just expose the faux Bayh-Dole rhetoric for what it is–a chronic, unjustified taking of faculty scholarship for no good reason. Stanford v Roche provides the possibility for faculty–and those administrators who are up to it–to renew the discussions of the past, and ask, How, given where the patent system is now, and where universities are now, all steroided out on patent licensing operations, should universities approach the use of the patent system to promote the use of faculty scholarship? Perhaps allowing inventors to choose the management agent, and therefore the objectives, would be a great first thing to consider. For those discussions, some Lorites would be most helpful.

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