Who Owns My Invention? A Look at University Researchers and Technology Transfer
Author(s):
Justin Rich
Scenario
Mike, a professor at Frankfurter University is a computer scientist by
training. His particular area of interest is Internet search engines.
Mike has recently made several novel advances including a good estimate
to measure the usefulness of a web page given a query, and how to search
efficiently for pertinent data in large files. Individually, each of his
advances are not valuable. However, when put together, Mike's
discoveries form effective pieces of a search engine. He knows the
immense value of his algorithms and wants to start his own business.
What should Mike do?
Questions
- How should Mike handle the patenting questions so as to be fair
to others and further his own best interests?
- Who should Mike approach first?
- How does funding affect how Mike can proceed?
- Does the Bayh-Dole Act of 1980 change the way faculty members or universities patent their works?
- If Mike does create his own business, and another infringes upon
his patent, should Frankfurter's Technology Transfer Office (TTO) or Technology Licensing Office
(TLO) feel obliged to help Mike
prosecute infringements upon his license, assuming he is still an employee of the institution?
Interviews
I interviewed three people experienced with Technology Transfer at research universities. They were, in order interviewed, Mr. T, Mr. L, and Mr. O.
Mr. T has been an administrator in technology transfer for a few years. During our meeting, I asked Mr. T
specifically the questions above and spoke with him at length about
the ethics surrounding intellectual property (IP) at a university.
Mr. L works in licensing at a research university. Prior to this, he was
in technology transfer partnership development.
Mr. O was an excellent person to interview. He was involved in a life
sciences startup company before working in a university setting and had an interesting vantage from which
to answer my questions.
I asked each interviewee question 1, "How should Mike handle the
patenting questions...?" and question 2, "Who should Mike approach
first?" at the same time. First and foremost Mr. T believes that
Mike should, in a timely manner, approach his university's
Technology Transfer Office (TTO), or Technology Licensing Office
(TLO) if applicable. Then, Mike should officially disclose his
invention and/or discoveries to the university by submitting an
Invention Disclosure Form (IDF). It is ethically important that Mike
does notify the university because he has most likely made an
agreement in good faith to disclose his findings.
Mr. O and Mr. L both strongly agree with this course of action. Mr. L
notes that, "The vast majority of the time, if research is carried
out using the university's resources, then the university owns it."
Mr. O adds that when submitting the IDF Mike would have the
opportunity to list contributors to the research. If Mike were
working with others, as most researchers do, then Mike should
appropriately credit any other contributors to the work. Also on the
IDF is a section describing how the research was funded. Here too
Mike should appropriately give credit.
Question 3, "How does funding affect how Mike can proceed?" elicited
great responses. According to Mr. T , there are two general types
of funding, private and public. If Mike was using private funding,
depending upon previous agreements, the private source may have a
claim of ownership of the patent. The contingencies concerning any
patent ownership for the research, Mr. T says, is usually handled
in the agreements prior to starting the research. By doing this, all
parties are made aware of their legal and ethical obligations.
Therefore, if Mike was funded with private grants, Mike should
follow the actions prescribed in his agreements with the source of
the funding.
With public funding however, the three interviewees agree that Mike
should proceed by approaching his university's TTO/TLO. From there,
it would be up to the university to decide whether or not to elect
title. If the university does decide to elect title, then Mike can
start his own business and license the technology from his
university. However, provisions in the Bayh-Dole Act imply that the
university is obligated legally and ethically to give the government
royalty free licenses if they request them. Mr. L gives an
interesting example of how Mike could doubly benefit from licensing
his own technologies. Legally, the university is obligated to
compensate Mike, the inventor, based on revenues received from the
product. Then by licensing the product from the university he is in
effect increasing the revenue generated by his discoveries, and
therefore increasing the compensation he receives for them from the
university.
However, if the university decides to not elect title, then the
government has a chance to decide whether or not to elect title of
ownership. Again, Mike must wait. It may seem that this process is
unfair to Mike, because after all Mike did create the technology.
However, Mr. O tells me from his experience at a startup that it
is easy to forget that the research that is carried out is only made
possible by some source funding it. Therefore it would be ethically
unjustifiable to deny those sources the chance to own what they paid
for.
In the scenario it is clear that Mike would like to start his own
business using the technologies that he created. If both the
university and the government decide to not elect title, the
university could release the technology to Mike. Mr. T tells me
that there are very few releases performed in a given year (in 2004
there was one at his research university). Mr. O says that he often offers to perform
releases, but more often than not the inventor does not want to
pursue that. This is because in Mr. O's area of expertise, the
life sciences, the research material is cost prohibitive. If a
researcher wants to work in these areas, they must use the
university's special equipment. Once again, when a researcher uses
his university's resources, that vast majority of the time the
university owns it. So as Mr. O mentions, unless the researcher
works on it in his garage after the release, the ownership will most
likely be transferred back to the university. However, Mr. L states
that in Mike's case a release is very practical. This is because an
Internet search engine requires only affordable computer equipment.
Further research could be carried out at Mike's own home if he was
granted a release. Here again, Mike could start his own business.
Question 4, " Does the Bayh-Dole Act change the way faculty members
or universities patent their works?" elicited a different response
than I had anticipated. The respondents all agreed that the Bayh-Dole
Act has created huge incentives for universities to patent their
works. Every year a research university sees on the order of hundreds of IDFs,
chooses to pursue about a third of those and licenses half of these.
Out of the hundreds of IDFs, only about 10% break even, 5% make some
money and .01% generate a million dollars of revenue. For each
dollar of revenue for a particular patent, the inventor is entitled
to 50%, according to university policy. Mr. T informs me that other
institutions offer a 70/30 split of the revenue. Mr. L points out that
this incentive vastly dwarfs those offered for researchers in the
private sector who receive little or no compensation for the IP they
help discover. These incentives Mr. O argues helps stimulate
technological advances. These advances help stimulate more advances
by generating revenue for a university to invest further in the
research.
Question 5, "If Mike does create his own business, and another
infringes upon his patent, should Frankfurter's TTO/TLO feel obliged
to help Mike prosecute infringements upon Mike's license? Assuming he is
still an employee of the institution." Mr. T , Mr. O and Mr. L
were all very quick to point out their research university's policy, which is that each
licensee is responsible for protecting the IP they buy. Mr. O
envisions that the university would only prosecute if the TTO could show that
the infringer was costing the university millions of dollars. Mr. L says that
typically it is not an ethical obligation for the university to
prosecute infringements.
Conclusions
I found this exercise to be very thought provoking. Mr. T told me
that the reason why TTOs were started, in his opinion, was that,
the government is really good at buying stuff, but horrible at
selling it. Currently, the government is allowing universities the
chance to license the research they carry out in the hopes that it
gets put to use quickly. This reflects, for me, a great ethical
question for the future, namely how ought we ensure that
technological advances are put into use in our society? I have come
away from this project believing that TTOs are part of the answer.
If I were ever involved in a situation like this it is clear to me
that there are well defined procedures that I should follow.
Talking with the TTO would only benefit me. Because the TTO's
expressed purpose is to get technology to market, it would be in my
own best interest to allow them to sell it. However, if all other
parties decline, I would patent my discoveries. Then I would be very
careful to not use the university's resources to further the work,
because by doing so I would be unethically denying them their right to
ownership of the work. Mr. T made it painfully clear the
potential damage that misconduct could cause in this scenario for
the inventor.