Managing University Intellectual Property in the Public Interest (2011) / Chapter Skim
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4 Findings and Recommendations
4 Findings and Recommendations
Pages 59-82
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From page 59... ...
Thirty years ago, after considerable debate, this policy underwent a major change with passage of the Bayh-Dole Act, accelerating this activity and bringing about greater uniformity in the way research agencies treat inventions arising from the work they sponsor. The change also led many universities for the first time to organize how they handle IP stemming from both publicly and privately sponsored research.
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From page 60... ...
personal individual faculty and student consulting arrangements with individual private firms; 7. entrepreneurial activity of faculty and students occurring outside the university without involving university-owned intellectual property; and 8.
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From page 61... ...
And where research performers had the possibility of persuading federal agencies to transfer rights to them, the uncertainty of success and the complexities of obtaining waivers of government ownership under different agency rules were often high. Most institutions had no reason to hire specialized personnel and create administrative units to handle these matters.
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From page 62... ...
3. Empirical research on universities' patenting and licensing activity has relied almost entirely on what we consider to be a seriously deficient set of criteria represented by the metrics used in the annual survey of technology transfer offices by the Association of University Technology Managers (AUTM)
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From page 63... ...
comparative study suggests that faculty ownership and exercise of IP is not more effective in commercializing academic research results.124 The relevant question that we considered is whether claims that faculty ownership is superior to the status quo are at this point sufficiently persuasive to consider changing the current system, a step perhaps requiring changes to the Bayh-Dole Act and certainly to its implementing regulations. Those arguments revolve around the alleged superior faculty knowledge of critical elements of the technology transfer process and stronger faculty incentives relative to those of technology transfer personnel.
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From page 64... ...
Previous research together with research supported by this committee strongly suggests that expertise and experience in the multiple diverse sets of expertise involved in formal technology transfer transactions vary greatly across university technology transfer offices. One can presume that the same is true of faculty inventors, although they have been less studied.
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From page 65... ...
Aside from these practical considerations, the committee has strong public policy reservations about any proposal to assign IP to inventors: • Compliance with the Bayh-Dole Act's limitations and conditions on publicly funded inventions, including the requirement that a share of any resulting revenue be directed back into support of research, may be harder to monitor and achieve from individual inventors than from research institutions accustomed to ensuring compliance with the variety of federal requirements associated with research funding. • Similarly, with inventor ownership it could become much more difficult to encourage observance of the good licensing practices evolved by members of the university community and supported by AUTM and by this committee.
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From page 66... ...
research universities is certainly not immutable and in many ways could be improved. The committee's findings point in particular to the need for greater • clarity and balance in what goals are to be served and how performance is judged; • flexibility in how technology transfer offices are organized and conduct their business; • observance of community-generated "good practice" guidelines, such as the Nine Points to Consider in Licensing University Technology; • flexibility in the terms of research sponsorship, licensing agreements, and exchanges of research tools and materials; • recognition of the limited role of university-owned IP in transferring technology to established firms; • development and use of broader measures of performance and new modes of evaluation of technology transfer; and • transparency and accountability to the public.
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From page 67... ...
The licensing of technology to the private sector can yield financial returns to the university and faculty in many forms, including opportunities for faculty involvement in further development of the technology; follow-on corporatesponsored research agreements with the institution; donations to the institution from successful entrepreneurs; and direct revenues from licenses, infringement litigation, and sale of IP rights. Although it is reasonable to seek to defray the cost of technology transfer operations, patenting and licensing policies and practices should not be predicated on the goal of directly raising substantial, positive net revenue for the institution.
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From page 68... ...
Finally, anticipating that disputes will arise between inventors and their institutions' administrations over patenting and licensing matters, the university should establish a fair and transparent process for appealing technology transfer office decisions,126 as well as consulting with the funding agency that has residual rights before the inventor. Recommendation 2: Universities with sizable research portfolios should consider creating a standing advisory committee composed of members of the faculty and administration; representatives of other business development units in or affiliated with the institution such as business incubators, research parks, proof-of-concept centers, and entrepreneurial education programs; members of the relevant business and investment communities; and, if appropriate, local economic development officials.
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From page 69... ...
Whether technology transfer and research administration functions are formally combined is less important than whether technology transfer personnel carry out the fundamental purpose of maximizing transfer for productive use for societal benefit and understand that their responsibility is first and foremost to serve the institution's core missions, perceive the institution's stake in productive long-term relationships with private and public research sponsors, and cultivate fair and open relationships with faculty and staff who generate the inventions being managed. The principle of university ownership does not mean that the responsible unit must perform internally all of the functions typically associated with current technology transfer offices.127 Indeed, some of these must be conducted cooperatively within the institution -- with faculty, other administrative offices, and academic units–and may be more effective if shared with or outsourced to entities outside the institution, for example, contract consultants, local economic development agencies, and even other universities or groupings of institutions.
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From page 70... ...
Typical technology transfer office functions that may be amenable to sharing or outsourcing to specialized contractors are the following • invention disclosure evaluation and market assessment; • patent filing strategy, application preparation, and prosecution; • licensing versus start-up selection; • licensing strategy and negotiation; • marketing and business plan development; • ongoing management of contracts and licenses; and • database and financial management. Functions that may be inappropriate or less amenable (in whole or in part)
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From page 71... ...
Many or most research tools, for example, should be managed in a fashion that is consistent with the broadest possible use and access, for example, by royaltyfree licenses or royalties limited to recouping university direct expenses in acquiring patents and managing the licensing process. There may be several reasons for patenting a technology that is made available without a fee or only a modest fee, including an important one being "defensive," that is, to preclude patenting by another party that would restrict the availability of the technology.
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From page 72... ...
129 The "Nine Points" document points out that licensees often seek guaranteed access to future improvements on licensed inventions and that such access may effectively entangle a faculty member's research program to the company. As such, the "Nine Points" discourage giving exclusive licensees rights to "improvement" or "follow-on" inventions and instead state that licensed rights should be limited to existing patent applications and patents and only to those claims in any continuing patent applications that are (1)
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From page 73... ...
In considering enforcement of their IP, universities should be mindful that their primary mission is to use patents to promote technology development for the benefit of society and that involvement in legal disputes with outside entities can reflect poorly on an institution. Some observers have encouraged universities to see "gold in them thar patents" by enforcing patent rights through litigation and pointing to some lucrative outcomes.130 Others have cautioned that litigation is a two-edged sword, and universities can find themselves on the losing side.131 Caution seems particularly appropriate in enforcement of patents on far upstream basic research discoveries.
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From page 74... ...
Industry sponsors should follow similar practices, encouraging material exchanges and refraining from demanding overly restrictive conditions. University technology transfer and sponsored research offices should discourage investigators from entering into sponsored research agreements where the terms governing material exchanges between nonprofit institutions deviate from this policy.132 LAUNCHING START-UP ENTERPRISES Launching a stand-alone new firm may be the best or only option for commercializing a new technology, particularly when its use would displace existing methods and disrupt established business models.
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From page 75... ...
The capabilities vary from institution to institution but include • on-campus and off-campus incubators and science and technology parks that enable start-ups to access expertise and share facilities and services; • entrepreneurial centers that train students and advise faculty on business plan development; • centers that provide funds for follow-on pre-commercial technology development; and • early-stage investment funds drawing from endowments, alumni, or other university-affiliated sources. When launching a start-up enterprise, the technology transfer office, which is able to acquire IP protection but usually not equipped to develop a business plan or marshal capital and managerial talent, tends to play a subordinate role in the process and sometimes is seen as a regulatory obstacle focused on licensing terms that may or may not reflect the risks and uncertainties entailed in taking an entirely new enterprise from formation to commercial success.
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From page 76... ...
The decision to extend such a license should depend on the existence of a vetted business plan, absence of conflicts of interest, and evidence that the principals, per Recommendation 9, have sought out competent managerial 133 See Jon Fjeld: The Challenges of Creating New Ventures to Commercialize University Technologies, presentation to the Committee on the Management of University Intellectual Property, The National Academies, August 28, 2008. 134 National Research Council.
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From page 77... ...
This recommendation is intended to support venture creation as a vehicle for technology transfer for social good and, to this end, is also intended to encourage staff cooperation with the technology transfer office, facilitate cooperation among elements of the support structure for entrepreneurship, and result in more accurate reporting of entrepreneurial activity. RELATIONS WITH PRIVATE RESEARCH SPONSORS Although privately sponsored research is largely unregulated, most universities have claimed ownership of the inventions derived from it and disclosed by faculty and staff.
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From page 78... ...
• Universities grant corporate sponsors royalty-free nonexclusive licenses to research results where the company pays the full costs of the research in question. Recommendation 11: University technology licensing and sponsored research offices should explore arrangements with private research sponsors that promise to obviate the often protracted process of negotiating licensing terms, the principal source of friction and delay in reaching agreement.
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From page 79... ...
Such measures should extend well beyond number of patents applied for and issued, number of formal licensing agreements, and revenue received. Appropriate process metrics include how long agreements take to negotiate, satisfaction with service among faculty and licensees, how many technologies are being promoted at any time, how well technology transfer personnel qualifications are suited to this diversity, how many contacts are made in the course of marketing the technologies, and whether the technology transfer office is imposing out-of-pocket costs on the institution that are unjustified or unsustainable.
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From page 80... ...
The Bayh-Dole Act is a sound and flexible framework for promoting the commercialization of university-developed inventions resulting from federally sponsored research. The committee has no reason to believe that either governmental retention of title or routine retention of title by individual inventors would yield more commercial applications or achieve a better balance
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From page 81... ...
Recommendation 14: There should be a clear assignment of federal government oversight responsibilities, perhaps by Executive Order, including • ensuring consistent implementation of federal technology transfer laws by all agencies; • reviewing agency diligence and actions with respect to DECs, government use rights, and exercise of march-in rights; • revisiting the Department of Commerce regulations implementing several provisions of the Bayh-Dole Act, including the conditions for access to and use of data gathered about inventions; • heading an interagency committee on technology transfer that would, for example, evaluate and develop a government-wide position on proposed changes to the Act or system; and • reviewing with other agencies and with representatives of research universities and relevant professional groups the data that should be collected from universities. To play an effective role, the oversight unit needs to extend its outreach not only to other federal research agencies but also to the university research community.
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From page 82... ...
These circumstances mean that even once there is a functioning oversight entity, it would be seriously handicapped in carrying out its charge. Recommendation 15: Federal research agencies should reinvigorate the requirement that institutions reliably and consistently provide data to iEdison on the utilization of federally funded inventions, including licensing agreements and efforts to obtain such utilization.
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