Inventor ownership solves – it improves speed and effectiveness of tech transfer

[Martin, Donald, “Reconsidering the Bayh-Dole Act and the Current University Invention Ownership Model,” Research Policy 38, GDI-JCR]

The inventor ownership model decentralizes the invention dissemination decision to those closest to the knowledge creation process and to the one most likely to have the best information. This model already exists as a default practiced in cases in which universities decline to exploit the invention and the inventor petitions the federal sponsor for the rights (Chew, 1992).30 If inventors owned the rights, then they could choose to use the university TLO or any other organization to commercialize the technology, commercialize the technology themselves, or place the invention in the public domain. In an inventor-ownership model, they would be the principals, and they could secure an agent. There are benefits beyond efficiency. In fields such as computer science software inventors often wish to place their programs into the public domain, but many TLOs demand that these programs be protected and licensed. In the inventor ownership model, the inventor would make the decision unfettered by institutional constraints. An inventor ownership model would relieve researchers of the affirmative obligation to assist in the patenting of inventions made in their laboratory, and to assist the university in prosecuting patents. Inventions could be dedicated to the public without violating employment contracts. This is important because often, a public domain arrangement would best serve the public good by rapidly diffusing the technology. Beyond the efficiencies, the institution of an inventor-owned patent model would remove the temptation to judge faculty members based on the financial return they can provide the university. Transferring the property rights to the inventor raises normative questions regarding the propriety of allowing individuals to capture the entire benefit from inventions developed with public monies in the social space of the university commons. This could be addressed through employment contracts providing that the university receive a tithe from its inventors of, for illustration purposes, five percent of the equity or licensing proceeds of any invention university researchers make in their fields of expertise. The tithe should be sufficiently small so as not to discourage inventor commercialization. This pre-arrangement would shrink the burgeoning graymarket vexing the currentmodel. Addressing normative issues is not precluded in an inventor ownership model. Inventor ownership is not a panacea, but it would not worsen existing problems. In cases in which an invention has multiple inventors, regardless of the ownership model, priority and ownership must be determined. One argument for TLO ownership is that, if there are multiple inventions with multiple and differing authors, the TLO as the owner can aggregate these inventions. This becomes more difficult in the inventor ownership scenario, as there is no central “sovereign.” Whether a TLO can do this aggregation more effectively than the parties or, if necessary, the civil courts, is not clear. If the TLO decides unfavorably to certain claimants, the decision is likely to be challenged in the courts. If inventors are at separate institutions, the ownership determination process will be more complicated since not only the inventors, but also their respective TLOs, are involved. Given the greater number of parties with interests involved, arriving at a settlement is likely to be more difficult. The university administration’s role in an inventor ownership model would change in that it would not be responsible for technology licensing. It would return to its earlier and more important charge—ensuring that faculty members discharge their institutional duties. Inventor ownership might result in the exploitation of students, but there is no evident reason that this exploitation would be more prevalent than it is today—and the administration would not have the appearance of conflicts of interest. If such problems were a concern, then faculty members could be required to report efforts to exploit university-related (or even all) inventions they were commercializing. This would create greater transparency. Inventor ownership should not generate serious new problems, while alleviating some of the current difficulties and inefficiencies. Another valid concern regarding the inventor ownership model is whether it would be more likely to stifle the flow of information and materials. There is no definitive answer to this concern, but our suspicion is that faculty inventors may be more sensitive to pressure from their peers than TLOs may be. Nonetheless, if university researchers have their own firm staffed with professional managers, their willingness to provide information and materials is likely to be reduced—but this would also be true if the professor has a firm licensing university technology. No model can eliminate all of the tensions that, almost by definition, exist when an invention is transferred from the non-profit world of the university to the for-profit world of business. The inventor ownership model would remove research commercialization from the control and mission of the university administration and would decentralize it to the inventors. We have shown the efficiency reasons for such a model and have argued that in terms of the speed and effectiveness of technology transfer the inventor ownership model would result in superior outcomes. In terms of information and material flow and good governance within the university, there is little reason for inventor ownership to be socially inferior.