University ownership has destroyed the innovation ecology of academic research, subjecting faculty to capitalist corporatization

[Gerald, “How Bayh-Dole failed to protect faculty inventors (from university administrators),” Research Enterprise, 09/28/15, https://researchenterprise.org/2015/09/28/how-bayh-dole-failed-to-protect-faculty-inventors-from-university-administrators/, accessed 7/17/24, GDI-JCR]

But what has happened? Universities have adopted large corporation methods: demand ownership of everything, let management sort out what’s of value, hold everything else just in case. They justify this based first on the overturned notion that Bayh-Dole vested ownership of inventions with the employer. When that explanation failed, they argued that to comply with Bayh-Dole, they had to implement present assignments. Or, much more conveniently, if they had changed their patent policy to require assignment (following the argument that doing so conformed to federal law), they simply pointed to the policy without indicated that the policy was the way it was based on an argument that was simply false.

The coarsest way, though, is simply to claim that university ownership of faculty work is a very good thing, and no matter the accidents by which such a policy has come about, it is a public good that administrators may attach themselves to just about anything a faculty member might invent, discover, author, create, collect, compose, or consider, so long as there appears to be either a way to own it or a way to make money from it. Anyone who resists is selfish, corrupt, pig-headed, and aiming to defraud the public for personal gain. Only universities should be allowed to do such things, and (so the argument goes), universities are much better at such things than are mere faculty members. This is the gist, by the way, of AUTM’s amicus briefs on the Stanford v Roche case.

The hole that Bayh-Dole left open in trying to navigate from a uniform federal policy on inventions to a diverse university patent practice was that universities would move to the corporate model of IP ownership rather than that small businesses and nonprofits would explore voluntary and open models pioneered by universities. The shift from uniform federal policy to uniform university policy was too easy a slight of mind. The lack of clarity in the law with regard to compliance left inventors at universities exposed to administrative power, and the outcome was that the law was used to destroy the diversity of practice, undercut the network of invention management agents, bring things in-house that had no business being in-house, and create a backlog and gridlock of fragmented intellectual property. In the current university patent licensing model, one financially lucrative license per decade is success, no matter if 2,000 inventions had to be sequestered for possible monopoly licensing to get there.

Bayh-Dole, by mixing university protocols with small business and nonprofit protocols, set up the administrative destruction of faculty research and innovation freedom. The attraction of turning all faculty discoveries into *capital* assets to be offered first (and generally only) to speculative monopolists in the hope of making huge amounts of cash proved too great. Making money from exclusive patent licenses is a strong rhetoric. Letting faculty choose how to teach, publish, disclose, patent, or share what they discover is a weak rhetoric–but it is just this weak rhetoric that supported the success that universities (via their faculty inventors and the invention management agents chosen by those faculty inventors) that provided the argument for Bayh-Dole. Not that Bayh-Dole was needed, or even that the idea that all federal agencies had to adopt a single approach to inventions made with federal support makes *any* sense–but however it was, Bayh-Dole was drafted without protection for faculty inventors. When the shadow of federal requirements passed over the university, administrators made their move to take ownership of whatever they could. In the process, they disrupted (and essentially destroyed) the innovation ecology that spawned Bayh-Dole in the first place.

What to do about it? Any university that chose to could simply roll back its patent policy and comply with the (f)(2) agreement without making other claims on faculty (or student) inventions. That would be the most creative and effective thing. But university administrators are like basset hounds that have fallen into a well. It is easy to get in, but next to impossible to get back out.

Similarly, the standard patent rights clauses could be changed to make clear that (f)(2) supersedes any university patent policy or employment obligations. By requiring a university to require each potential research inventor to make an (f)(2) agreement with the government, a university gives up any other claim the university has on the potential inventor. This, too, is the case with small businesses under the standard patent rights clause, but no one to my knowledge has considered the implications. Small businesses were invited (but not required) to participate in the same open environment for inventions that universities had created over the course of seventy years. But instead of an open environment, the forces of monopoly control moved in on the territory and imposed corporate protocols. Faculty fates were sealed when Bayh-Dole was extended by executive order to cover large corporations as well.

Clearly, by that time, large corporations were not being invited to participate in an open, diverse, largely voluntary faculty-led approach to patenting inventions made with federal support. Just the opposite happened. Faculty were told that the corporate approach was the only way to comply with Bayh-Dole. Federal law mandated they give up both academic freedom and freedom to innovate–but only for the *significant* work that they might do. The faculty could of course still hold personal rights in useless, worthless, and laughable stuff. The rest should be made into offerings for speculative capitalists–not for industries broadly, not for the public, not to assure non-discriminatory access, but rather to pitch investment funds on behalf of (largely) the already wealthy. To create a betting pool for speculators. The need for gazelle companies is not rooted in the idea that discovery is best made available through solitary fast-growing companies, but rather the need is rooted in a speculator’s hope of a substantial return on investment.

Speculation has a role to play, and certainly so does investment. But loans also play a role, without only the expectation of a repayment with interest rather than a wildly open upside. And as far as research goes, the idea of a grant–not even a loan, not even with a direct interest in repayment–is also important. At one point, grants were essentially gifts, made in recognition of the integrity and determined curiosity of investigators not working to make a buck, not trying to create a commercial product or venture–but explorers, off the beaten track, chasing down an intuition. The federal version of the gift–the funding agreement–greatly expanded after World War 2. It took twenty-five years for federal funding to become not just an accepted form of funding, but also the primary form of funding of university research. Attaching Bayh-Dole requirements to turn faculty discovery into speculative institutional capital was a genius move for capitalist-minded administrators, but a destructive move for the indigenous population of faculty researchers.