IP Finance is delighted to bring you this piece from our friend Suleman Ali (Holly IP), which touches on a sensitive topic:
Are Commercial Pressures Undermining the Ethics of University Tech Transfer Offices?
The Bayh-Dole Act of 1980 made it possible for US universities to benefit financially from government funded research. It allowed universities to own the patents that resulted from their research, rather than having to assign them to the government. Since then many US universities have done well in commercialising their research. The Association of University Technology Managers (AUTM) in the US reports that last year US universities and research institutes executed 5,130 licenses, formed 705 start-ups, filed 22,750 US patent applications and made $2.6billion from licensing income. UK universities have also done well from commercialising research, making £61 million in licensing income in 2010/11. Most would agree that commercialising university research is beneficial for the economy of a country, and in particular helps the increasingly important hi-tech industries.
The hub of the system is the university tech transfer office. Such offices are now well established in many top universities, and are finding their feet in the less prestigious universities. However tech transfer offices have a difficult task. They have to persuade academics to commercialise their research, educating and pushing the reluctant ones and keeping in check the powerful and pushy ones. They have to defend the university’s interests when collaborations are set up, and are sometimes accused of being too aggressive in doing so. Most importantly they have to decide on which research they’re going to commercialise. That is usually based on two main factors, patentability and commercial worth. Patentability is complex, but usually possible to decide on -- but assessing commercial worth can be close to impossible, and inevitably tech transfer offices get it wrong a lot of the time. That means many university patents are never licensed or commercialised in any way as a commercial partner is never found.
Questions can be asked about the do’s and don’ts of commercialising publically funded research. While it seems acceptable for tech transfer offices to license or sell patent to companies that are going to develop the relevant technology, is it equally acceptable for them to monetise their patents through PAEs? US universities are aware of the issues raised by turning to PAEs. A memo that resulted from a meeting of top US universities in 2006
One wonders about the long term consequences on university research now that the option to license to PAEs is available. Academics are under increasing pressure to focus their research on areas which will have commercial interest. While it could be argued this harms blue-sky thinking it would still lead to innovative, and hopefully round-breaking, work. However the PAE model relies on having patents that cover what is being done by companies. That may cause academics and tech transfer offices to simply focus on producing patents that PAEs would be interested in having.
Perhaps now is the time for broader questions to be asked about how publicly funded research should be used. Governments seem increasingly in favour of open innovation, where the results of university research should be freely available to all, allowing as many organisations as possible to benefit from it. Allowing PAEs to license and assert patents resulting from university research seems a backward step in that process, hurting not only the most innovative sectors of the economy, but arguably also being detrimental to university research itself.