IP Management

Innovation is a challenging thing.  It is often unpredictable, especially for incumbents.  Institutional processes and systems meant to “optimize” efforts often end up doing more harm than good.   But institutions have a role, and not everything about innovation is subject to random chance.   The continuing question, which must be renewed as conditions change, is how to develop institutional approaches for a better future, one in which research plays a meaningful role, discoveries are used to advance our quality of life, and people find value in the work that they do.  And sometimes those approaches mean doing less, rather than more.

Below are some areas in which I, and others that I work with, can help you and your organization navigate IP policy and practice, economic development, and innovation.  If you have an interest in following up, feel free to contact me at:

Gerald Barnett
gerald.barnett at gmail.com

1.  IP Policy. I have read a lot of university IP policies.  And, truly, a  lot of these IP policies are terrible.  Badly conceived, poorly drafted, alternating between bombast and piddly micromanagement, getting IP confused with intangible and even tangible assets, overreaching claims, impossible processes, and strangely fixated on money.  One would think after a century of debate, universities would have their act together on IP policy, but it hasn’t happened.

I take an agnostic view toward university claims of ownership.  If that’s what a faculty wants, then I can help them do it well.  If the purpose of policy is to cut the university in on big bucks from innovation, then there are ways to do that as well, and not all of those ways involve starting with an ownership position in faculty IP.  Personally, I tend to prefer institutional approaches that start with freedom, and position the university as mediator and steward of IP, rather than first claimant.  But there is room for diversity of approaches, and it may be that some universities are well positioned with their claims to ownership.   Whatever approach one takes, it would be good to establish that approach with solid concepts, drafting, and implementation.

I can provide policy review, showing where there are defects in definitions, consistency, claims, and processes; I can discuss alternatives both in concept and drafting, and point out matters that have been left out or are overly constrained.

2.  Bayh-Dole implementation and assignments. Universities still have not got Bayh-Dole implemented correctly.  The Stanford v Roche decision in June 2011 made that point emphatically, over the objections of a bunch of university administrators and a number of fronting organizations.  Three elements most in need of university attention are (i) implementing the agreement required at 37 CFR 401.14(a)(f)(2); (ii) reforming policy to recognize Bayh-Dole as a pre-approved agent statute, not a first right to claim title statute; and (iii) establishing a public reporting of Bayh-Dole subject invention utilization, which will allow university and federal policy makers to gain a clearer understanding of what is going on.

There is a lot of misinformation around about Bayh-Dole.  Following Stanford v Roche, a coterie of writers has worked to prevent folks from understanding the significance of the decision and the actual structure of the Bayh-Dole Act and the standard patent rights clauses that it authorizes. Research Enterprise has taken on these folks and argued that claims for Bayh-Dole should be accurate, documented in context, and supported by a careful reading of the law.  What matters is how administrative actions advance research and creative initiatives, and for that, Bayh-Dole has much more to offer as a law that promotes diversity than one that secures institutional control for profit-making of key findings of scholarship.

As for present assignments, which are now all the rage in university IP policy circles, a present assignment aims to secure assignment of title to intellectual property before that property is created.   After the Stanford v Roche decision, some vocal commentators decided that the message of the decision was that universities failed to use present assignments in their employment agreements.  This is a deeply flawed and damaging reading of the Stanford v Roche ruling.  There is a use for present assignments in university settings, where a particular piece of work is well defined and the scope of the obligation is agreed to by all involved.  Agreeing to author a work for the institution, such as a departmental web site, for instance, might be advanced by a present assignment.  It can be problematic, however, to attempt to make present assignments apply where the scope of employment is not well established, such as is the case, often, with faculty.

I can help faculty and administrators come to understand the Bayh-Dole Act as it is written and how it operates, and can assist in efforts to restore Bayh-Dole implementation to the forms it that are available to universities.

3.  Intellectual property in research settings. I can develop and provide training and public talks on the forms of statutory intellectual property–patent, copyright, and trademark–as well as other forms of intangible assets often associated with intellectual property, such as trade secrets and internet domain names.  While any number of attorneys can provide a legal account of IP, and others can describe the typical uses of IP in corporate licensing settings, there are much fewer who have any experience in developing strategies to use IP in academic research settings.

In academic settings, terms such as “protect” and “infringement” take on strange, ill-suited meanings.   In these settings, IP may play an important role, but it is not the role typically championed by speculative investors and administrators who desire to do business with them.  IP in academic settings may manage first associations, control quality, establish a basis for a contractual relationship, create a commons or standard, and encourage cross licensing and access to technology that otherwise would be withheld from the research and practice communities.  The greatest challenge for universities is not to impose corporate-style, or speculative investor-style thinking on academic activity, but rather to adapt IP to advance academic activity, even if doing so challenges what attorneys are taught in law school about how IP is to be used.

4.  Intangible assets and open innovation. IP is just one form of intangible asset.  A distinguishing characteristic of IP is that it can be owned.  Other forms of intangible asset may be only possessed, or accessed, rather than owned.   Such intangible assets may include research data, expertise, services, awareness of potential or risk or variation, charm, “buzz”, critical mass, externalities, commons, distribution channels, centrality in a network, strength of weak ties opportunity referrals, and even network congestion.

Open innovation methods are often built around intangible assets other than IP.   Or, put another way, IP is used to create other intangible assets, and it is the value derived from these assets that provides the reward for the use of IP.  Rather than seeking a monetary return from the licensing of a patent or copyright, one seeks to use that IP to create a community of practice that then looks to the university for support, workshops, updates, and the next round of innovation.  From such interactions there are any number of ways individuals and the institution generally may benefit, from research grants to attraction of talent, to donations, services agreements, and leadership positions.

I have built open innovation approaches in university settings, know open source software and open hardware methods, and can assist folks wanting to develop their broader intangible asset profile while keeping a handle on the IP in the process.

5. New ways to get ideas and funding. University research funding has been compartmentalized into sponsored projects, donations, and licensing income.  These compartments are enforced by robust policy statements and often through operational practice “silos”–offices that may not work well together and may indeed see the others as competitive if not harmful.  I have sat unrecognized in development office presentations to industry in which technology transfer and sponsored projects are presented as bureaucratic red tape which the development office can cut through, and I have listened as sponsored project officers complain that development officers would violate law and policy to book income as a gift rather than a grant.

There are ways to navigate these matters, using concepts such as designated funds, and building “projects” that are organized around a public service rather than “research”.   Such approaches allow broader participation by practitioners (as distinct from from corporations), and among companies, allow for decisions to collaborate to be made at the level of the workgroup rather than in the higher reaches of CxO management.

For this stuff to work, however, IP practice has to be repositioned, and within working relationships, IP may be subordinated to other patterns of exchange.  Thus, an invited workshop can carry with it a license to practice the technology under management at the university that is presented in the workshop.  Thus, a broad-based non-exclusive licensing program can be transformed into a micro-consortium to fuel continuing outreach and development.  Thus, a frame agreement can be used to allow a host of variations in relationship, each no more than a page or two of documenting text.  These sorts of arrangements can lead to new sources of support for research and development of new technology, and the cultivation of goodwill and talent for future endeavors.

I can help develop these sorts of arrangements to build new ways to engage the broader community in university work, and in turn to bring community interests into university work.

6.  Licensing practice. A license is release that an IP owner will not sue for infringement.  A license agreement makes that release contractually enforceable.  In the big shape of things in academic IP management, it is the recipient of technology that is naturally more interested in a license becoming contractual.   For there to be a binding contract, there must be offer, acceptance, and consideration.  If a company wants a license agreement, then the company has already decided to pay.  The questions then are, for what? and in what format?

When a university instead demands payment, and in a particular form–as is often the case in a template university-drafted patent license–then the great incentive for the licensee is to find ways to mitigate what is owed, or to design around the patent, or to challenge the validity of the patent at a later date.  For this, the issue is not the royalty rate, but the royalty base, and not all the bad things the licensor university can do in breach, but the motivations for the company to support the university via payments in the patent license.  Moving from the bully-troll model, which is at times lucrative, to a mutually established framework for licensing runs a different path, generally, from the conventional instruction on licensing practice at universities.

I can help develop alternative licensing practices for universities and affiliated foundations seeking to create strong working relationships with industry, with the practice community, and with entrepreneurs and their speculative investor backers.  As well, I can review existing license agreement templates for practice limitations and problems in the context of exclusive licenses (especially reservation of rights), startup licenses (which often take the form of implicit assignments), non-exclusive licenses (in the context of sponsored research, and F/RAND practices), hybrid licenses (multiple forms of IP, and extended over time), and public licenses (such as open source licenses and Creative Commons).

7.   Tech transfer office management. There are a number of ways to build a technology transfer office in a university setting.    The current conventional approach has been to create a licensing office on the model of MIT and Stanford.    In this approach, the university owns and seeks to license patents derived from research undertaken within the institution.   A recent trend is to focus the licensing efforts on startup company formation.  Doing so may result in paper companies holding a license, while changing the fundamental from finding one or more qualified companies to finding investors willing to float the startup and its license obligations to the university.

But there are other approaches that have worked in the past and are in many ways better aligned with academic practice.  The use of an invention management agent has had a 100 year run.  Research Corporation was established in 1912 and is in many ways the model for the university-affiliated research foundations such as at Wisconsin, Purdue, Washington State, and Kansas State.   In this model, a university’s “technology transfer” office serves to identify possible inventions and to refer these to one or more agents for review and possible management.  The university stays out of the patenting and licensing, but the inventors may choose an agent based on their public commitments, their personal interests, and other factors.  The university plays a supporting and mediating role, demanding solid metrics, reporting to the public, and protecting the integrity of academic research and instruction.

Beyond these models, which tend to isolate IP from research and practice, are ones that do a much better job integrating research relationships and IP.   These models bring IP and research together, and put pressure on conventional formulations of the “sponsored research project”.   The agricultural extension office is historically such a technology transfer model, where the benefit intended was for the practicing local farmers, rather than for, say, a major corporate interest or someone hoping to make money selling a product to the farmers at a huge mark up over what they could provide for themselves (such as saving seed).   Other approaches emphasize the growth of industry relationships, the combination of assets from multiple organizations to form a library of assets or pool or commons.  These sorts of approaches may be of great value for practice areas and industries that are just emerging, or derive their value from early adoption rather than blocking IP positions to support massive proprietary investment.

I can help a university develop alternative models–ones that do not necessarily displace a patent-for-exclusive-license approach, but rather run alongside such an approach, tailored for the needs of, say, an Engineering School rather than the pharmaceutical industry.

8.  Innovation. Innovation is introduced change in the established political, social, religious, scientific, or technological order of things.  While some innovation is desired by incumbents–improvements, efficiencies, and mitigations of badness like pollution and layoffs–other innovation challenges the incumbents and won’t figure in the roadmaps of industry leaders, blue-ribbon panels, and the work of leading economists.   The university has always been expected both to serve the status quo, and to challenge it.   IP management practice also must follow in this effort.

Disruptive innovation may introduce technology that upends market leaders and their operating models.  Shanzhai innovation may look at first like piracy or infringement but also provides low-cost, locally produced goods to those unserved by upmarket profit schemes.  Traditional knowledge and knowledge change offers yet another way of thinking about the status quo, creativity, and change.  Academic research is often much more strongly aligned with these sorts of approaches to innovation than it is to a proprietary, institutionally operated patent-first approach.

Thinking about innovation, then, is much more than commercialization (creation of products for sale) or licensing (granting rights in return for payments).  Innovation thinking takes one to the unlikely, to the out of the way, to things that have no market, and may never have a market (think of internet standards, for instance).   Connecting up the activity of research (and instruction) with broader concepts of innovation offers a revolution in the approaches taking by IP policies and technology licensing offices.  Yes, there can be innovation in innovation practice, as well, disrupting and obsolescing current approaches.

I can help with training and discussion that might broaden a university’s approach to innovation, and situate IP policies and technology transfer practices within a broader context of innovation strategies.

9.  Regional economic development. Universities are recognized for their role in economic development, but there’s a lot to be done to align IP management with such activities.  The current angle is that universities will own patents that are transferred to local startups, and the number of startups (and the amount invested in them) is somehow an indication of economic development.  There is much more going on.  University work is at once more locally bound and more international than the licensed tech startup.  Tech startups move to locations in which they will prosper.  Restricting tech startups to a regional base (such as requiring that they remain in-state) may actually work against regional economic development.

Some of the most important work that stimulates local economic activity may come from work at a far-distant university, or from a long-defunct company in another country.  A university has as much importance as a net importer of valuable technology as it has as a producer.  And in fact the technology imported by a university–coming with new faculty and grad students, identified and acquired for research, reported and contributed by practitioners and by companies using open innovation methods–may be more important for regional economic development than the technology created locally, which may be random in its application to local resources, interests, and capabilities.

There are strategies a university can use, or encourage, that builds a creative class environment in which ideas and technology may move effortlessly across institutional borders, even in the presence of IP.I can help faculty and administrators situation university IP practices in a broader setting of economic development, considering such things as trade enhancement, location of new markets, and management of developed and imported IP to create local opportunities.

10.  Startups, nascent companies, small companies. Companies early in their development can be an important source of new technology, products, and ideas about markets and doing business.  Who would have thought that Facebook, based on college mug books, or Amazon, based on ordering books on the internet, would become world powerhouses?  But getting from a startup to such a situation is not the only purpose in new companies.  Others exist to provide essential craft services, as part of a value chain of suppliers, distributors, and after-sale support.  These companies also are vital to the economy, are sources of innovation, and provide rewarding jobs.

Many of the most interesting companies that might start near a university don’t have anything to do with university-claimed/-managed/-developed inventions.  They don’t need a license.  They need other things, like visibility, or access to equipment, or independent validation of results, or help with a design or engineering problem, or access to talented workers, or to be part of a cluster of such companies sharing and competing with each other in turn.  Working with startups and nascent companies (under five years, and ready to move from owner-control to a delegated company structure, such as 2nd stage companies in Economic Gardening) means taking a broader view than simply what companies have been started with a license from the university, or with the involvement of university faculty and students as founders.

Not all tech startups require venture capital–in fact very few do–and those that do likely will have to move to where that venture capital is robust and their market position much better established.  For a regional university that is not already embedded in a major investment center, the approach to small companies must take a different approach.

Small companies are generally lost in university policy and practice, other than startups taking a license or formed by faculty.  Small companies are not sought for sponsored research or consortia, are not recruited for job fairs, do not have political presence on university advisory boards, and are not the focus of licensing efforts.  Small companies also do not have the legal or administrative resources to joust with university officers from months over contract apparatus.  Something has to change to bring small companies back into focus for university-related innovation.  IP policies and practices–both in technology transfer and sponsored projects–can be part of that change.

I can help the local business community, entrepreneurs, and investors alike work with regional university faculty and administrators to create a startup and nascent support environment in which university IP is not a blocking asset, or a wasting asset.

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Perhaps this list gives you ideas about how to move a discussion about IP policy from such things as how a university can better demand ownership of everything in order to ensure it doesn’t miss out “on the big money” to how a university can provide a top-notch place for talented people to pursue their interests while engaging others, contributing to the public, and drawing on institutional resources for support.  I am available for workshops, reviews, policy development, and practice change.  If you need help, or have an interest in taking up a topic covered at Research Enteprise, please feel free to contact me.

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