The Supreme Court ruled Monday that universities cannot automatically own the rights to the inventions that result from federally financed research. The next day, a New York Times editorial decried the decision, saying it “romanticizes the role of the solo inventor,” and “fails to acknowledge the Bayh-Dole Act’s importance in fostering collaborative enterprises.” This couldn’t be more wrong. The university commercialization system is broken, and the solution is to empower, not inhibit, the researchers.
The Bayh-Dole Act, enacted in 1980, laid the ground rules for federally funded research, allowing universities to own the resulting intellectual property. Universities established technology transfer offices where they patented and licensed that intellectual property to industry. The number of patents filed and licensing revenue earned became the measure of success for these new offices — offices that were invariably staffed by lawyers and contract negotiators. Their focus was on extracting the maximum value from university inventions rather than ensuring that research breakthroughs were turned into inventions. The Kauffman Foundation, an authority on entrepreneurship and invention, called them "monopoly gatekeepers.” A few universities like Stanford and MIT reap substantial profits from technology licensing, but most don’t cover their costs.
Vivek Wadhwa is Vice President of Innovation and Research at Singularity University and Arthur & Toni Rembe Rock Center for Corporate Governance at Stanford University. His other academic appointments include Harvard, Duke and Emory Universities as well as the University of California Berkeley.
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If university research was a business, it would be bankrupt.
In 2009, the federal government, industry, and philanthropic organizations invested $53.5 billion in university research. The total licensing revenue of all U.S. universities amounted to $2.3 billion that year, and that number includes the ongoing royalties from technologies licensed over the past decades.
University research is not a business. Its purpose is to expand the knowledge base for humanity, to educate, to inspire, to create research leadership. The real benefit comes from the students these universities educate. Those students go on to start the Intels and Googles of the world. So it is not fair to judge the success of university research by the licensing revenue produced. But, our leaders continue to justify increases in research funding based on that metric. They tout the fact that universities invented some of our greatest technologies—like the Internet, magnetic resonance imaging (MRI) technology, and the transistor.
The U.S. economy is in shambles and our world leadership is eroding. We need to make the most of everything we have. We’ve invested over a trillion dollars in university research over the decades. Most of this has not been commercialized. The next internet or semiconductor technology may already have been discovered and left to languish on the shelves of a university research lab. These little-known discoveries are an untapped gold mine of knowledge and a potential catalyst for groundbreaking ideas.
The technology transfer offices are only the beginning. The system also disproportionately rewards academics for publishing papers. Academics strive for tenure, and tenure is earned through published papers—not by creating startups.