Over at the GAIN group on LinkedIn, Laura Schoppe has asked a good question about “decentralization” of university licensing efforts. She appears to advocate for the efficiency of central IP offices. Peter Schuerman from UC Merced has already provided a solid response. I’ve commented as well, but since there’s a 4000 character limit there, I am posting here my full response.
Peter makes a great point. Technology transfer means movement of technology from one group who has it to other groups that don’t. The term “technology transfer” was popularized in the 1970s by Research Corporation, which used it to encourage the formation of campus offices that would identify inventions and help faculty inventors present those inventions to RC for possible management. That is, the transfer was from lab to invention management agent.
The genius in the approach was that there were two voluntary filters in play: first, faculty identified inventions for which patenting made sense (in terms of academics, collaboration, and industry practice); second, RC (and other invention management organizations) decided whether to take on the invention and the patent work. If RC agreed to manage the invention, inventors signed their patent rights to RC (or, in some cases, a university research foundation, or rarely, a university), and RC took on the expense, liability, complications, and requirements to seek commercialization partners for the invention. The double filter focused efforts on willing inventors, important inventions, and targeted expertise. Such “de-institutionalization” of commercializable inventions greatly reduced the need for worries about “efficiency.” If a university wanted a financial share, it made deals with the invention management organizations for a share of their take, or if a university had equitable interest in an invention through exceptional support, perhaps a share of the inventor’s royalties. A university did not have to own to benefit.
I was one of a team brought into the UC system to decentralize patent management. By that time, most campuses had local offices, but the Office of the President still controlled all sorts of policies and delegations of authority. But even with UC’s present decentralization, UC is still stuck with a patent policy that assumes central control. That policy still demands ownership of all inventions, and demands that those inventions get managed by a central licensing office. Whether that office is in Oakland or in Merced doesn’t make much difference, other than for volume. The same system-wide policy still controls. To take equity in a startup still requires a 10+ page form to be completed and multiple system-level reviews. The system-mandated template patent license runs to 30+ pages and assumes exclusivity. The system still worries about double licensing and racing to the bottom: what one campus does affects all campuses. The system also worries that it is “unfair” to inventors at Merced, say, or Santa Cruz, that they don’t have an office that files patent applications on every invention like a rich, well-staffed central office presumably would.
Actual de-centralization would push inventions out of UC, so that each campus, or even research group, could deal without worrying about commitments made by other campuses or research teams. Background rights and double licensing issues would also be greatly reduced.
So Peter is spot on–patents should not be the primary driver in university innovation. Creating relationships is–as Andrew Hargadon points out in How Breakthroughs Happen. The questions then are what relationships, and between what parties? Those questions are lost if the first issue is whether an organization has a multiple offices or a single office to handle patent rights. If one wants to see the strength of a campus licensing program, make assignment of IP to the institution voluntary, as it was at most universities prior to the 1970s and especially before the Bayh-Dole Act destroyed much of the existing infrastructure. If inventors still assign, that’s something. If they don’t, it likely means they have better opportunities than working through an administrative office.
The “efficiencies” of central control for universities are illusory. University research happens across a wide range of disciplines and industries. It happens without a core line of business, products in the market, customers to serve. All those things suggest central control for a corporation (and even there, central control of company research does not result in widespread adoption of invention and discovery–consider the cases of Xerox PARC or Microsoft Research).
In universities, the smarts are on the periphery, the key talent is free to explore, and there is (or ought to be) no “competition” from whom to prevent disclosure of discovery. If a university wants its inventors to have an impact, then it needs to get out of focusing on efficiency.
Efficiency is a symptom of volume, and that in turn arises from requiring ownership of every invention–which means losing the best in the mass of the rest, trying to master all areas when that’s clearly impossible, and suppressing many research findings in favor of a tiny few that appear lucrative. UC has historically made about 75% of its licensing income from 25 inventions and 50% from 5. That would be impressive if its portfolio was 250 inventions, but the UC portfolio is over 5,000 patents and thousands more inventions. UC has estimated that only 0.5% of its inventions ever get as far as a first commercial sale. Efficiency clearly is not the issue. Suppressing the movement of ideas is. Creating a licensing environment fixated on offering an exclusive patent license to speculative monopolists who then may well attack your research partners is. Finding ways to be helpful rather than fussing about risk, volume, money, getting paid, compliance, or deference to rules is.
Let inventors control. If they want to commercialize, help them move their commercial efforts out of the academic area, which is for research and instruction. If they don’t want to commercialize, there are often good reasons. If a federal agency wants to hold patent rights, that’s the agency’s business, not the university’s. As Steven Johnson documents in Where Good Ideas Come From, most major innovations have come through networked, non-market approaches. Universities would do well to re-connect with the networked, non-market world for the vast majority of their research findings.