Full investor ownership bad – multiple reasons

[Brenda M. "Preserving the Fruits of Labor: Impediments to University Inventor Mobility," Tennessee Law Review 89, no. 1 (Fall 2021): 1-66 heinonline gdi-tm]

Problematic Proposals to Vest Ownership in Inventors

Some authors have suggested that academic inventors should have greater control over their inventions.389 Unlike employees in industry, academic inventors typically direct their own research programs with little involvement from their university, so they tend to have a better understanding o·f the technology than their parent institutions.390 University inventors may be well-situated to direct development of an invention, given their familiarity with the field and work with early-stage technology.391Providing inventors with greater influence over the licensing process could also decrease transaction costs by allowing inventors to retain control of development activity.392 Inventors might be able to choose more efficient agents than university technology transfer offices, which are sometimes disorganized or ineffective.393 The American Association of University Professors (AAUP) has set forth guidelines that propose providing university inventors with greater control of inventions derived from university research.394 The AAUP is a nonprofit association of academic professionals that seeks to "define fundamental professional values and standards for higher education." 395 The AAUP principles recognize the inventor's "fundamental rights to direct and control" issues related to "invention management, licensing, commercialization, dissemination and public use."396For disputes involving inventor rights, the principles instruct that any resolution should strive to provide the best outcome for the research, the inventors, the institution, and the public interest. 397 Providing inventors with ownership over their inventions, as opposed to merely increased control, would likely create more problems than it would solve. The potential for conflicts of interest is vast. Overinvolvement in commercialization can distract university inventors from their responsibilities to their parent institutions, such as teaching, publishing, programmatic activities, service, and mentoring students. 398 If university inventors were granted sole ownership over their inventions, they might exploit university resources for commercial purposes unrelated to their. academic position. For example, they alone could reap the financial rewards of inventions that benefit from the efforts of graduate students and other academic personnel. 399 Strong financial interests might sway university inventors to report less than completely accurate results in describing their research.400 Vesting ownership in university inventors may impede commercialization. Academic inventors might exclusively license technology to a private company with which they have a prior relationship, even if other companies would be better at 'commercializing the invention or creating a larger social benefit.401 University inventors might lack the experience or financial means to commercialize their inventions. 402 The skill set of a university inventor may not translate well into licensing the technology or becoming an entrepreneur.403 Moreover, many inventions are jointly owned by multiple university inventors. 404 Commercializing inventions that are jointly owned usually entails higher transaction costs compared· with having the university as the sole owner. 405 Universities should also be more likely than inventors to consider the public interest in developing a technology, given their legislative, financial, and reputational foundations described previously.406