This is a guest blog post by Jim Farmer, Coordinator, Scholarly Systems Group at Georgetown University and editor at the eReSS project, University of Hull.
At the December 2006 Sakai Conference in Atlanta many expressed the view that patents inhibit collaboration and innovation in teaching and learning. But that was not the view expressed by higher education representatives in last month’s Congressional hearing.
Since the passage of the The Bayh-Dole Act (P.L. 96-517, Amendments to the Patent and Trademark Act of 1980) universities have been able to patent and receive license revenue from federally funded university research. Oregon First District Representative David Wu opened the July 17th hearings saying: “The impact of Bayh-Dole can be measured in terms of technology innovation (patent disclosures and application), licenses granted, and new company spin-offs. It can also be measured in financial returns to the university to support further research and new jobs created in the region.” Patents are the valid measure of innovation.
Arundeep S. Pradhan, Oregon Health and Science University, quickly agreed testifying: “Since 1980, American universities have spun off more than 5,000 companies, which have been responsible for the introduction of 1.25 products per day into the marketplace and have contributed to the creation of over 260,000 jobs. The result has been a contribution of over $40 billion dollars annually to the American economy.” He implied that university patents were the sole cause of these economic benefits.
Georgia Tech professor Mark Allen said “In a number of circumstances, the competitive advantage afforded through exclusivity [that is, patent monopoly] may be absolutely critical to justify the risk undertaken by a company in developing a product from a promising early-stage university technology, as it was in the case of Cardiomems.” Professor Allen, also Chief Technology Officer at Cariomems, did not reveal his compensation from privately-held Cardiomems using the patented technology from his Georgia Tech research.
Susan B. Butts, Dow Chemical Company, had a different perspective: “Although the Bayh-Dole Act has enabled the transfer of technology developed with federal funds from US universities to industry it has also contributed to a contentious climate around the issue of intellectual property (IP) rights which discourages research collaborations between industry and US universities. Second, most foreign universities, which do not have the IP expectations created by Bayh-Dole, allow industry research sponsors to own or control inventions resulting from the research that they fund. This much more favorable treatment of IP is causing companies to do more of their sponsored research abroad [emphasis added].”
Wayne Johnson, Hewlett-Packard Company, focused on information technology patents. ‘We in the information technology (“IT”) industry do not believe in ‘Home-Run’ Patents. Today’s products are sophisticated, complex aggregations of software, systems and services (such as the personal computer, PDA or cell phone). Each one contains literally hundreds of patented concepts and implementations. Yet no one concept or implementation ‘makes or breaks’ the success of the product. ‘Home-Run’ patents do not drive innovation in the IT industry.”
He concluded: “One of the key, original goals of the Bayh-Dole legislation was …to promote collaboration between industry and universities… Unfortunately, it has had just the opposite effect of what was intended. While intellectual property (IP) rights, patents, and a strong IP position have been critical to our success in past, It is innovation, collaboration, and strong relationships and interactions between US universities and industry that will drive our future success. “And Bayh-Dole, in its present form, does not address the particular issues of interaction, collaborations, and strong relationships.”
Fortunately Stanford University Law School’s Mark Lemley brought his thoughtful, reasoned, and well-researched perspective to the discussion. He observed: “Bayh-Dole fundamentally changed the way universities approach technology transfer. Universities obtain 16 times as many patents today as they did in 1980, and their share of all patents is five times greater than it was before Bayh-Dole. They license those patents for upwards of $1 billion a year in revenue.”
“The effects of this surge in university patenting have been both good and bad. On the positive side, it seems clear that the Act has achieved its goal of encouraging university inventors to patent those inventions and to license those patents to private companies that can make use of them. Particularly in the biomedical area, these university-private partnerships have been responsible for a number of significant breakthroughs.
“On the negative side, universities have too often looked to the short-run bottom line in setting their licensing priorities, granting exclusive rights to breakthrough technologies to businesses that may not be best suited to exploit them for the benefit of society as a whole. Particularly in the information technology (IT) industries, there is a sense that university patents are interfering with rather than promoting the dissemination of technical knowledge to the world at large. The growing number of university-filed and university-sponsored patent lawsuits in the IT industries, many in association with non-practicing entities (or so-called “patent trolls”), has added to the sense in those industries that universities are often adversaries, not partners, in the deployment of technology.”
Universities as litigious “patent trolls?”
The University of Texas and the University of Washington, via their proxies, are current major litigators claiming the concept of predicting text based on what has been entered-“Typing ahead”-and the Bluetooth wireless technology were invented by university researchers or, in the case of Bluetooth, a university student.
The Association of University Technology Managers’ 2003-2004 survey compiled data from 164 U.S. universities. In the previous year the AUTM Survey represented 86.9% of research expenditures reported in the National Science Foundation’s survey. The 164 universities reported legal fees of $189 million with $80 million reimbursed by losing parties. This is in additional to the 691 full-time equivalent licensing professionals and 727 “other” staff employed by the universities.
Lemley suggested: “Universities should take a broader view of their role in technology transfer. University technology transfer ought to have as its goal maximizing the social impact of technology, not merely maximizing the university’s licensing revenue. Sometimes this will mean patenting an invention and granting an exclusive license. Sometimes it will mean granting nonexclusive licenses to all comers. And sometimes it should mean foregoing patent protection altogether. For Bayh-Dole to work as intended, universities must look beyond their short-run profit and think about what is best for society as a whole.”
The 2004 AUTM Report cited education Boston University and the University of North Carolina Chapel Hill as examples of invention in education. Want to use Boston University’s Team Learning Assistant workbook and software? Students must purchase the workbook and ticket for online service from McGraw Hill; Boston University licensing fee included in the price of the textbook. Want to use a Virtual Microscope? Purchase it from Science Learning Resources, Inc. PayPal accepted. University of North Carolina licensing included.
Writing in “Universities in the Marketplace: The Commercialization of Higher Education” Harvard University President Derek Bok warned of the issues raised by Lemley. Lemley’s suggestion is important for eLearning-a collaborative effort important to the mission of higher education.
Perhaps it is time for college and university presidents to develop a patenting policy, as Lemley suggests. To protect the collaborative environment of colleges and universities, patents should be encouraged only in areas where needed. For example encouraging investment for clinical trials. Patents should never be considered a valid measure of the value of university research.
It is interesting that "technology transfer" and "innovation" is measured as numbers of patents issued, when the debate is about whether universities should be patenting their *faculties* inventions. Obviously the flip side of this debate is that if no one issues patents, no technology transfer occurs.Given those definitions, it is hard to argue with the effect of allowing universities to patent their inventions. However, if all university inventions were licensed using a variant of the common OSS licenses that have proven their worth in terms of technology transfer, we would likely see an exponential increase in the use of university-bred innovations. But this would require a definition of tech transfer that wouldn’t sit well with the patent crowd.It is also interesting to note that at least in the context of Federally funded research, universities seldom actually pay their faculty to do the research. Not only do Federal funds pay the faculty salaries, they also pay exorbitant amounts of indirect costs to cover the bloated administrative costs. This is quite a perversion of the original idea behind patents – to encourage inventors to take risks – universities risk nothing. The grants fund the faculty and armies of administrators whose sole purpose is to invent reasons why they should be on the payroll. Most private technology driven organizations can only have wet dreams over such a deal.
Nice piece! I think that a lot of us are concerned that converting the results of publicly funded research projects into private information assets is so commonly and uncritically accepted. It is more disturbing to see how easily this attitude has become entrenched in university culture. I understand the logic, which is well outlined in Jim’s posting, and question its consistency with the posture that the Federal Government has taken since the Reagan/Thatcher, years relative to financial assistance for study. The government (federal and state-in the US and elsewhere) has justified reductions in student and public university support based on the rationale that the primary beneficiary of university education is the student, so the financial burden should be assigned to the student. This logic does not seem to apply to government investment in research. Perhaps more investment in higher education allowing for enhanced access through lower financial barriers to learners and more open technology transfer allowing for enhanced participation in the use of information assets through the reduction of intellectual property barriers would result in the innovation multiplier effect that we all seek.