Nine Points to Consider in Licensing University Technology - A nicer way to patent Answered
Earlier this month, a group of 11 research institutions signed a pledge to take a different approach to licensing intellectual property, titled "Nine Points to Consider in Licensing University Technology". My read of the whitepaper amounts to this: Universities are realizing that their aggressive licensing behavior comes at a cost, and they're toning it down.
However, of the nine points, absent in my mind is consideration of the students involved in any licensing deal. For many, graduate school gives the first meaningful introduction to the patent system, and often the first introduction to the system of licensing intellectual property. When a research project turns into a patent, and a patent turns into a startup company with a student in a founding position, the alignment between the student and the university, particularly with what's often called the technology licensing or transfer office (TLO or TTO), ends. Knowing the high failure rate of startups, it's the TLO's job to immediately extract as much value from the startup as possible.
During my time there, MIT was no different in this regard, and I went through this process personally with a company based on some of my research as well as seeing the same thing happen to friends. The TLO would approach the negotiations in the same way it would approach negotiations with an established IP giant, like IBM or Intel. The burdens placed on nascent companies were incredible, and included things such as direct cash payments -- things that can increase the chance of failure or require the founders to give up more control to VCs into return for badly needed cash.
So, while the whitepaper discusses costs that are, in general, more societal, the aggressive behavior I've witnesses also comes at a cost. My propensity to give to the endowment has been severely impacted. The licensing offices must know that second-time entrepreneurs have a higher success rate, so maximizing the TLO's return comes at an overall cost to the university.
My choices in what projects Squid Labs pursued were also impacted. Colin, Saul, and I were all in the same research group while at MIT, so one might think Squid Labs would have pursued projects in printed electronics -- something we spent a combined nine years working on. Not so. Knowing the roadblocks that the TLO would put in front of getting access to those patents, we intentionally went after ideas out of MIT's control.
Good thing we did, otherwise I might not have a place to share these thoughts with you!
Here's the original article, forwarded to me by my Mom, that brought this to my attention:
A Nicer Way to Patent
By Eliot Marshall
ScienceNOW Daily News
7 March 2007
Universities have plumbed a rich source of cash in recent years by aggressively patenting and licensing faculty inventions, but some schools now want to set limits on the practice. An elite group--11 top research institutions and the Association of American Medical Colleges (AAMC)--have signed a pledge to take a kinder, gentler approach to licensing intellectual property. Yesterday, they released principles on the sharing of patented discoveries, urging other universities to follow their lead.
The manifesto, drafted at a meeting last year at Stanford University in Palo Alto, California, makes nine key points. First on the list is that universities should not agree to deals that would curtail access to new technology by researchers at nonprofit institutions. In the past, for example, biologists complained that Harvard University granted a company too much control over its patented "oncomouse," an animal designed to be cancer-prone (Science, 17 May 2002, p. 1212). This impeded its use in research, some claimed. In other points, the guidelines say that universities should steer clear of deals that give one licensee highly exclusive control of a discovery; that they should avoid making claims on "future improvements" of a discovery; and that they should take into consideration the special needs of "neglected patient populations or geographic areas."
The specific issue that led to the drafting of these principles, according to physicist Arthur Bienenstock, former dean of research at Stanford and an organizer of the Palo Alto meeting, was a flurry of concerns about license restrictions on the use of human embryonic stem cells from the University of Wisconsin, Madison. The university's technology manger, the Wisconsin Alumni Research Foundation (WARF) initially required some university-based researchers to take out a restrictive commercial license. After many objected, WARF dropped the policy (Science, 26 January 2007, p. 449).
WARF's director, Carl Gulbrandsen, acknowledges that the stem cell licensing requirements caused a backlash. But he says Wisconsin has never sued a university or a researcher over a patent license disagreement. And he praises the new Palo Alto licensing guidelines--which WARF itself has endorsed--although he notes they are "very broad" and nonbinding. Gulbrandsen adds: "We have been following most if not all of these policies" for many years.
What impact will the new document have? AAMC Senior Vice President David Korn, who helped draft it, concedes that the guidelines are "a bit arcane" but hopes they create "a buzz" among university patent officers at their annual meeting in San Francisco this week. Korn says the position statement will remind everyone that university licensing deals should "always be guided by the public interest."