More Trouble From Universities And Patents: Lawsuits Between Universities And Professors

from the sharing-the-knowledge-or-grabbing-for-profits dept

We recently discussed how the Bayh-Dole Act, which encouraged universities to look at patenting their research, has done more harm than good for many universities. Because of the Act, many universities set up "tech transfer offices" to try to "commercialize" the research going on at those universities. However, the majority of universities have found that the tech transfer offices have lost them money. That's because (once again) they overestimate the value of the patents themselves (and underestimate the costs of running the transfer office). Now, the Associated Press is highlighting a second problem coming out of this focus on patenting every bit of research: lawsuits with professors.

You would think that a university, whose mission is to help disseminate knowledge, would want to help share ideas. But Bayh-Dole turned many of them into idea-hoarding factories, believing (often incorrectly) that hoarding ideas would bring them profit, thus often stifling research. In the main case described in the article linked above, the University of Missouri gave up trying to commercialize a certain patent developed by a professor at the university. Even so, when the professor tried to reclaim the rights to his own research, for the sake of doing his own startup, the University tried to put in all sorts of strict rules and conditions -- well beyond what it even requires of other organizations it licenses patents to. Thus, the two sides are now engaged in a big lawsuit.

This, of course, hurts everyone. Rather than focusing so narrowly on patenting every bit of research and then trying to squeeze every penny from those patents, you would think that there are much more beneficial ways for everyone to benefit from the research. The professor could build his startup, and the more successful it is, the better it reflects on the University -- who can tout that the research initially came from the university. This, in turn, can lead to new (and bigger) grants and funding for new research, as the university's reputation is greatly enhanced. If the professor remains connected to the university in some fashion, this works out even more. And all of this can be done without patents. In fact, without having the professor license his own research, it keeps the costs down for the startup, making it easier for that startup to succeed. Plus, this would fit well with the recognized value of sharing ideas that come out of academia, rather than trying to hoard them for profit.

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Scientists Feel That Patents Cause Significant Harm To Research

from the anyone-other-than-lawyers-and-monopolists-like-these-things? dept

In the last few years, as more and more problems with the patent system have come out, we've seen some defenders of the patent system try to categorize and compartmentalize the problems. They'll say things like "well, maybe patents cause some problems with software" but they're important elsewhere. The problem is that in pretty much every area they claim patents "work" for, the actual evidence suggests otherwise. For example, there's been a belief among many that patents are hugely important to scientists. A few years back, we saw that this wasn't necessarily true, with many scientists complaining about the damage done by patents -- especially when it came to collaborating and sharing ideas -- a key and important element of creating useful and compelling research.

Michael Geist points us to a recent survey of scientists who say that IP protection has a negative impact on their research. It's greatly slowed down the ability to do research, as universities (thanks to the dreadful and damaging Bayh-Dole Act -- which has significantly hurt progress in scientific research) are trying to hoard anything that can be patented for the sake of profit, rather than scientific advancement. Of course, advancement doesn't work that way. It works through collaboration and sharing ideas -- and what patents do is add a huge bureaucracy to the process, encouraging secrecy, not sharing and hoarding, not collaboration. Once again, we're seeing that about the only folks who really truly benefit from patents are the lawyers.

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Nathan Myhrvold Now Capitalizing On Failed University Patent Intitiatives

from the privatizing-publicly-funded-research dept

We've discussed, in the past, the infamous Bayh-Dole Act, which tried to push universities to patent more of their research, with the idea that it would make research more commercializable. In fact, the unintended consequences were to significantly harm university research. Universities quickly set up "technology transfer" offices, with the idea of selling off patents for tons of money, but the vast majority of universities discovered that such technology transfer offices cost a lot more than they made, and so they were a drain on university resources (you know, which could have gone to basic research). On top of that, the new focus on patenting everything caused researchers to be much more afraid to share ideas and concepts with colleagues, greatly diminishing the value of research or the ability of researchers to explore other areas where colleagues might have already applied for patents, for fear of "infringing."

However, it looks like Nathan Myhrvold's Intellectual Ventures, which we've discussed at length, in the past, is looking to take advantage of this situation. With so many university technology transfer offices losing money, IV has been going around and signing deals with universities. Basically, IV gives those tech transfer offices some money upfront, allowing IV to effectively add each university's patent pool to its own portfolio that it uses to go around demanding hundreds of millions of dollars from companies to "protect" them against any future lawsuits.

Effectively, the end result is less actual research being done at universities, while some guys who don't actually build anything get rich. And, oh yeah, the companies that actually do stuff are poorer. Doesn't something seem highly suspect about this scenario?

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How Patents Have Harmed University Research

from the a-travesty dept

When we talk about all the harm patents do, some people respond that even if the market can make up for cover the research costs for commercial products, without patents, basic research would never happen. Nothing can be further from the truth. In fact, there's increasing evidence that patents are harming basic research as well. The main arena for basic research has long been universities. Yet, back in 1980, what was supposed to be a "minor tweak" to the patent system, the Bayh-Dole Act, allowed universities to start patenting their research. And, patent it they did. However, as the NY Times notes, rather than foster new research and innovation, this resulted in much less collaboration, much greater secrecy and much higher costs to innovation.

As the article notes, the problem was in making the same mistake that many patent system supporters make, assuming that the invention stage is the most important part of innovation -- when it is not. Invention is just one part of the innovation process. Locking up the invention stage makes every other part of the process of innovation much more expensive, thereby limiting innovation -- and in fact, that's exactly what the Bayh-Dole Act has done:

Part of the problem has been a lingering misunderstanding about where the value lies in innovation. Patenting a new basic science technique, or platform technology, puts it out of the reach of graduate students who might have made tremendous progress using it.

Similarly, exclusive licensing of a discovery to a single company thwarts that innovation’s use in any number of other fields. R. Stanley Williams, a nanotechnologist from Hewlett-Packard, testified to Congress in 2002 that much of the academic research to which H.P. has had difficulty gaining access could be licensed to several companies without eroding its intellectual property value.

As for whether or not it's actually increased the amount of basic research, a study we wrote about earlier this year found that it had actually decreased basic research at universities. And, the story gets even worse, because it's not even as if this ability to patent university research has resulted in huge monetary windfalls for universities either. While some had hoped to hit the jackpot with patents, they failed to recognize just how costly it is to maintain patents and run a technology transfer office. A recent study found that the majority of tech transfer offices had lost money for their universities.

About the only good news in the article is the fact that the steady stream of studies and complaints from within academia about this impact is gradually waking up some to how big a problem the Bayh-Dole Act was in stifling research and innovation in the US. Unfortunately, just getting basic patent reform moving is difficult enough. And since the pharma industry likes Bayh-Dole (since it allows them to sweep in and get all the value from discoveries made at universities -- see The $800 Million Pill to learn about how pharma and biotech companies have abused the system for years), you can bet that they'll put up a huge fight to repeal this incredibly harmful bit of legislation.

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Patents For University Research No Help In Increasing University Research

from the so-much-for-that-theory dept

If you've read David Levine and Michele Boldrin's excellent book Against Intellectual Monopoly (there's a new version available), you'll see study after study after study showing the same thing: despite the idea that patents are supposed to encourage more research, there's simply no data that stronger patent protections increases the rate of research. In fact, if anything, the evidence suggests the opposite: that stronger patent laws allow researchers to rest on their laurels and use monopoly control to slow down any additional research. Much of this research is available in chapter 8 of their book.

Based on that, it should come as little surprise to see a new study coming out, suggesting that the infamous Bayh-Dole Act of 1980, that tweaked patent law to push universities to patent their research, did not actually cause greater research in the academic space. This is important, because many patent supporters point to the Bayh-Dole Act as being a key point in increasing the commercialization of research coming out of universities, thanks to the various patents. That now appears to be untrue. In the blog post linked above that discusses this, Institute for the Future blogger Anthony Townsend notes at the end "To their [Bayh and Dole's] credit, at least they didn't make things worse." Unfortunately, that's not true. They made things a lot worse. As we noted over two years ago, the Bayh-Dole Act has resulted in universities actively stifling research, using the monopoly powers granted to them under patents to prevent important basic research, driving up costs and slowing down innovation. Researchers are now less likely to share information, which has always been an important part in moving important research forward and figuring out how to build on each other's research for practical applications.

So, despite the common claims by some that Bayh-Dole's tweaks to the patent system helped drive better commercialization of basic research from universities into the market, we now have more evidence that it's done the exact opposite. It didn't increase the amount of research being done at the university level, and rather than encouraging greater innovation, the monopolies granted have helped to stifle innovative research, decrease information sharing and generally drive up the price of research and the commercial applications of that research. That's exactly the opposite of what the patent system was intended to do.

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