University patent ownership is parasitic on the startup ecosystem – it creates a poison pill that destroys investment and makes it impossible to get off the ground

[Gerald, “Inventors would own more, were it not for noncompliant Bayh-Dole practice,” Research Enterprise, 3/10/23, https://researchenterprise.org/2023/03/10/inventors-would-own-more-were-it-not-for-noncompliant-bayh-dole-practice/, accessed 7/17/24, GDI-JCR]

As for startups, university practice is mostly parasitic, not catalytic. Universities make inventors assign to the university and then make them beg–through proxies for “ethics” appearances–for rights back. In these cases, nothing *transferred*. The inventors know their inventions. They are not transferring anything to themselves. What they lack is a bureaucrats’ approval to practice what they have invented in any context other than at the university. Seems like a restraint of trade, or a non-compete requirement disguised as a patent policy. The university takes ownership so that it can use that ownership to demand a piece of whatever pie the startup might get, and in demanding ownership, and insisting that the startup take an exclusive license, the university makes it all that much more difficult for the startup to start.

When a university intervenes in a startup effort, it creates a poison pilled license agreement that puts off investors and is set up to require payment of the university’s patent work, which is often more expensive than if the startup did its own patent work. As one director of patenting at a major university told me–we don’t care how much the patent work costs. The licensee will just have to pay it. Their patenting work ran easily 50% higher than it needed to be. Missed deadlines, requests for extensions, defective first drafts, fussing through office actions. Whatever. The startup gets what amounts to a forced loan on its patenting costs (since the university pays but then demands direct repayment rather than recover its expenses from a royalty on sales)–but those payment terms are often a crappy deal for the startup.