While there is a place for exclusive patent licensing (but why not just assign?), the university screws over its public mission by involving itself in exclusive deals. Just because those deals aren’t obvious to the public unless they make big money for the university and it brags it up doesn’t mean that the deals are healthy for the university. My observation goes further–merely the attempt to do exclusive deals, merely leaving the lingering expectation that a university might attempt to do an exclusive deal, is damaging to a university’s public role, to the public’s sense that a university is doing what it ought.
And that damage–from the expectation a university might deal a patent exclusively, might try to make money on the value of suppressing use, suppressing improvements, suppressing applications, might set up some single company to troll industry, to set up that company to sue on behalf of the university, to shake down those that would otherwise benefit from access to the invention–that damage runs through all the inventions that the university holds.
The damage takes the form of lost relationships, lost goodwill, lost gifting and sponsored research income, a stench of public betrayal and betrayal of university claims to ethical practice, disruption of industries rather than service to those industries, withering of rainmakracketeering using patents, ineffective technology transfer, and perhaps worser of all, motivating companies that do not expect or want an exclusive license to design around university inventions, or avoid those inventions, to exclude those inventions from industry roadmaps, to delay adoption. And those behaviors render university research and billions of federal research dollars (treated as pork) irrelevant, useless–at least until the patents lapse.
Institutions never apologize. Universities say technology transfer is hard, but they don’t bother to consider how their own stupid policies (no, really, I’ve read hundreds of those policies–most of them are stupidly written, just mind bendingly stupid–and they are so stupid, Dunning-Kruger style, that they can’t even see it) and the stupid ineffective practices they use following those policies (policies may expect money-making from licensing, but I haven’t seen a policy yet that fixes the default position to be exclusive licensing even though that is, everywhere, the default university practice). Yes, their stupid choices for policy and practice make technology transfer all that much more difficult. But to a bureaucracy that’s dumb, life getting harder means better pay, bigger budgets (to comply!), more empire, more status. If technology transfer appeared easy, why then you wouldn’t need to spend a few million a year on staffing the office.
My argument is that if you got rid of your patent and invention policy altogether, then you could cut your technology transfer budget by over half, run the office as a voluntary service if anyone still wants it (there are reasons to have folks who can help with IP when it makes sense for the university to serve as curator or escrow or aggregator for a commons or consortium). Getting rid of a policy that claims everything, demands disclosure and assignment of everything, has to document and database all it has claimed, and then with all that noise and bad expectations tries to find exclusive licenses while pissing off everyone else with the threats that are necessarily implied in that attempt–getting rid of that policy is like, well, introducing easiness where now you have a paperwork blizzard, process rules taking the place of clear thinking, and turning everyone in the university into a potential criminal (stealing future income from the university, from the *public* no less, by failing to disclose inventions and just publishing them, or starting companies, or consulting, or helping students do these things–without leaving that to the university office which can’t do all that, not simply because it lacks the capability but because it is genuinely impossible to work every new thing that might emerge in a university for the opportunities it may have in the moment. Certainly doing things with a single process makes no sense. That way is stupid. No policy and no process is way, way better than what universities have got now.
Back in the run up to the Bayh-Dole Act, its advocates made a big thing about a claim–undocumented–that the federal government held 20,000 patents, mostly unlicensed. This claim was used to smear the federal government as ineffective in placing inventions made in federal work into public use. Bayh-Dole, it was argued, would reverse the “presumption of ownership” and by doing so would spark a wonderful renaissance of innovation based on inventions made in federally supported research.
The 20,000 patents claim was not only undocumented–merely asserted by Howard Foreman–but also pure deception. I know, it’s politics, but it is also material to policy about how organizations should go about dealing with invention made within their opportunity to act. At some point, folks have got to work with ground truths rather than happy illusions spun out to warp legislation. I mean, don’t you get tired of incessantly being asked to act based on hopelessly delusional or fake or disingenuous claims put forward as basic facts?
Here’s the deal with the 20,000 patents mostly not licensed claim. In the federal policy regime at the time, working with David Lloyd Kreeger’s 1947 Attorney General’s report on government patents and the 1963 Kennedy policy (modified by Nixon in 1971), there was no need to license most inventions assigned to the federal government–the government made these inventions available non-exclusively, royalty-free. Licensing was not a matter of promising not to enforce patent rights but rather to ensure public safety and accurate representations of efficacy. The 20,000 patents claim exploits the idea that somehow the federal government’s patents were withheld from public use but for the negotiation of a license (or licenses). It just wasn’t so.
But look at things now. Universities have gone and got north of 140,000 U.S. patents. And unlike the federal patents, these patents have sat behind institutional paywalls. Rather than make the inventions available without formalities (and even without patents), universities and their allied foundations hold out, typically for an exclusive–single–licensee. If no exclusive licensee shows up immediately, university licensing officers would rather exclude all use than opening up the invention to everyone. Rationalize it any way you like, folks, but the bottom line (which you apparently care about) is that holding things back ain’t technology transfer, and holding things back because your exclusive hopes approach mostly fails ain’t technology transfer either.
The scale of the university hold-back boggles the mind. We are looking at north of two billion dollars spent just on patent applications and filing fees for the patents that actually issue. Even more if one looks at the cost of all the failed patent applications–maybe 30% or more of applications. And the cost of filing PCT applications, and even going national phase (which can run upwards of $20,000 per country) sometimes without any licensee in sight–just some strange hope and the joy of spending someone else’s money.
Again–the feds were bogusly accused of failing to license 20,000 patents–political theater–even though the government made the inventions available royalty-free, mostly without formalities. In the remedy for this bogus claim, universities have gotten 7 times more patents–and withheld most of them. Isn’t that enough of a basis to end the disaster of Bayh-Dole? And end the change in university practices that were made in response to the misrepresentation and non-compliant practice of Bayh-Dole? If 20,000 federal patents spun deceptively was a key basis to flip things around, isn’t 140,000 university patents keeping research findings from open use by all for 20 years but for an exclusive license (that mostly never comes and when it does come mostly never achieves practical application, and in the rare instances in which there is significant commercial use, often (especially with drugs) that use fails to meet the standard of practical application in Bayh-Dole–available to the public on reasonable terms (with reasonable meaning competitive, or as if there were competition)– an even better basis to flip things at least to *nothing*?
It’s just more bogusness to claim that the present university system just needs to be improved by spending more money, by staffing up with more people, claiming ownership of even more assets under the guise of “invention” (to include non-patentable stuff, to include non-inventive stuff, any stuff that may have “commercial value,” any stuff made with one’s academic expertise).
As it is, university exclusive licensing exploits the threat to exclude all others as the fundamental source of value–that’s why there are all those upfront licensing fees, milestone fees (a disincentive to make progress in development if there are alternatives to be explored), license maintenance fees. If the value of the license was in utility, licenses would ride on earned royalties on sales only–and even there, universities would build in incentives for exclusive licensees to price as if there were competition.
Think about it, the universities exploit the value of exclusion as their primary value point. They seek companies willing to pay to have the right to exclude competition–just as UCLA did with its less than patentable nicotine patch technology, licensing exclusively so that one company could disrupt another company getting to market first–and the company taking license didn’t even have a need for the UCLA patent, but for using it to fire a shot at its competitor. That’s not tech transfer, it’s (technical term here) crap. But UCLA got away with it–until eventually its patent was invalidated (prior art sads), but not after some heavy carnage spun as “success” for the licensing program.
Nothing is better than what has happened. The Dubilier defaults are workable. Voluntary participation is better than compulsory participation. Allowing university-based inventors to decide whether to use the patent system is better than forcing them to use the patent system. Better to help inventors to hook up with good people who might help them is better than demanding to always be that help, regardless of capability, capacity, expertise, or folks better positioned around. Going voluntary means that the people who request your help actually want your help. Less bitterness, less hopelessness, less noise and more signal. Focusing on patent rights and leaving everything else is also better. The non-IP intangible assets (NIPIA) may be more important than those patent rights, but if a university wants to help manage those, it doesn’t require a policy and doesn’t require a fixation on exclusive licensing (and the implicit push to receive money for helping to suppress competition and to share in monopoly pricing if it ever gets that far).
And if one is going to focus on patent rights as a subject for university management, then that management practice ought to start with non-exclusive access. “If you want to work with the university office, if we choose to help, we will start with non-exclusive access. If you want to start with exclusive dealing, then have at it, but you are on your own. Here are some law firms you might work with.”
You not like that, my VP of Research friends? It is way, way better than what’s happening now on your watch.