Nov. 28

Ending the Intellectual Property Frenzy

Universities frequently spend considerable time (and enrich plenty of lawyers) worrying about the intellectual property implications of collaborations with businesses. Elaborate deals are drawn up. When things go bad, lawsuits are filed. Bill Destler, the new president of Rochester Institute of Technology, says it’s time to just calm down about such arrangements, to stop focusing on intellectual property, and to start doing more research for businesses.

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In a recommendation that might stun officials at universities that have experienced windfalls from certain business relationships, Destler argues that universities should seek a modest payment from businesses to cover the basic costs of research they perform — and simply relinquish intellectual property rights. Currently, he says, it takes too long to make deals because universities all imagine themselves holding the rights to the next big drug breakthrough or commercial product like Gatorade (which has yielded more than $80 million for the University of Florida).

Most universities will never see that kind of success, and in the meantime, there are lost opportunities for academic scientists to help industry. In an essay he recently published on the RIT Web site, Destler articulates his sense of why some urgent new approach is needed.

“America’s leadership in new product and service development is in jeopardy. Competitive cost cutting has forced the elimination of all but the shortest-term research and development programs in the private sector, and our corporate laboratories have all but vanished,” he writes. At the same time, he adds: “Our institutions of higher education in the U.S. are still without question the finest in the world and they possess a reservoir of intellectual talent and creativity unmatched anywhere else. American graduate students are still the most cost-effective R&D labor force anywhere.”

In the essay, he faults universities for expecting riches from every business link, and for taking too long to make decisions. He also faults businesses, for focusing too much on “next quarter’s bottom line” and assuming that they can buy any new technology they need, rather than help to create it.

His solution: “Imagine a group of colleges that decide to make faculty and staff, graduate and undergraduate students, and facilities available to companies to carry out corporate research and development projects at low cost and without the usual intellectual property fights that usually derail such efforts. Imagine a new relationship between business and academia in which hundreds of companies discover that they can once again afford to do new product research and development, while identifying future employees at the same time. Suppose that the participating colleges and universities agree to accept a modest, up-front payment, to be shared by the students, faculty, and the institution, in return for relinquishing all IP rights associated with the work to the sponsoring company.”

In an e-mail interview, Destler responded to questions about his idea:

Q: How would such a model work — a flat fee to cover some pro-rated share of salaries, stipends and lab expenses? How would universities decide which businesses to work with?

A: We are developing a template agreement in which the university receives a flat fee for a project of a year’s duration. The fee includes the costs of faculty and student time, access to university facilities, university overhead, and a modest payment in lieu of any future university intellectual property claims associated with the work. Funding for supplies and equipment not already in hand would be in addition to the flat fee. Proposed projects would come from either corporations or university faculty, and projects would be accepted when a match between the company’s research needs and university capabilities was evident. Participation by all parties (companies, universities, and faculty and students) would be voluntary.

Q: Your essay mentions the importance of a new model to promote American competitiveness. If universities adopted this model, would you open it to foreign or multinational corporations, many of which would probably be quick to participate? And while RIT is a private university, would you feel it appropriate for publics to give priority to businesses in their home states?

A: The template agreement we have developed envisions projects in which the research is overseen by a faculty member working together with a corporate representative. This would work best when the university and corporation were located in the same region, although this would not be essential to success. As a result, partnering would most naturally occur between U.S. universities and American companies (or foreign or multinational companies with significant U.S. operations). Both public and private universities might very well give priority consideration to proposals from local companies.

Q: Some faculty members today fear that there is too much corporate influence in American higher education and they would likely see this plan as the ultimate example. How would you respond?

A: Clearly it is not in our long-term national interest to have the private sector dictate the directions that our colleges and universities take, but much university research undertaken today is of a very basic nature and there are benefits to be gained by connecting more of this activity with real world needs. If universities and colleges are to become the economic engines in their communities that they aspire to be, then their research and development activities need to be focused, at least in part, on projects that have the potential to lead to new products and services.

Q: How would you preserve basic research support, given business interest in what can be marketed now? Would this approach work as well at a university whose major research focus was medicine as opposed to technology?

A: Almost all support for basic research comes from the federal government, and this work would continue unabated. This approach would work at any research-intensive college or university, although institutions with medical schools and research hospitals will be harder to wean off of intellectual property royalty income because of the greater potential for significant return from pharmaceuticals and medical devices.

Q: You talk in the essay about a “group” of universities doing this. Could this be viable if one university (say RIT) just did it by itself? Any such plans? And how much in IP revenue does RIT get?

A: RIT is in the process of working with companies to develop several “poster child” examples of this new kind of corportate/university research collaboration. A number of companies have already expressed a desire to initiate projects of this kind. RIT does not receive significant revenue from its intellectual property inventory at the present time, which, along with its traditional strong connections to technology based companies, makes the institution an ideal place to initiate this kind of new university/corporate research partnership.

Q: Do you think this will happen or will the “Gatorade factor” and other factors keep the status quo?

A: I believe that it will happen first at colleges and universities like RIT, which are already well connected with the corporate sector and which have something to gain from increased corporate-sponsored R&D programs. A few big successes on the corporate side resulting from these partnerships may also encourage downstream corporate philanthropy to the participating college or university, which in the long term may help compensate for any losses in intellectual property income.

— Scott Jaschik

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