Unintended consequences

Has the entrepreneurial gene at the nation's universities gone mutant?

Since passage of the Bayh-Dole Act in 1980, the licensing of faculty inventions to industry has become a well-oiled machine. The most recent Association of University Technology Managers survey revealed the nation's higher education institutions are generating over $1.2 billion in annual licensing revenues from their government-funded inventions.

But a front page story in this morning's Wall Street Journal highlighted one of the unintended consequences of this commercialization fever. A former Duke University professor, after building an experimental laser on campus with government Star Wars funds, sued his former employer because it wasn't paying him royalties on the university's use of the invention.

Duke claims it is only using his laser for research. Academics that are engaged in purely scientific endeavors traditionally do not pay royalties because they're not trying to commercialize anything.

But former Duke physicis professor John Madey scoffs at that claim. He argues Duke is a corporate entity like any other, seeking to use his invention to land more government grants, charge high tuition to students and, if it's lucky, to commercialize other inventions that come from using his machine. The 60-foot-long laser isn't just a research tool, he says. It's a machine for making money.

The irony is that Madey is only doing to Duke what Duke, many other universities and many corporations and doing to everyone else. In recent years, universities and private companies have patented all types of research tools, especially in the biosciences. Some legal scholars and not a few scientists worry this fencing of the intellectual commons will shut down critical basic research.

Once upon a time, researchers would readily send reagents, cell lines or experimental molecules to their colleagues at other universities. Companies did the same since they recognized that basic science at the universities was where they got most of their best leads for new products like drugs.

But today, patent lawyers at both the corporate and university level insist on the recipient signing draconian material transfer agreements. These MTAs often require the researcher to turn over patent rights on any subsequent invention. Sometimes the owner insists on first rights to data or limits on publication, the lifeblood of scientific exchange.

The result? Many researchers are refusing to sign and do without some research tools. Instead of the free exchange of ideas, the individual biotech start-up companies, which are usually spun out of universities, maintain their exclusive lock on bits of government-funded knowledge that in another era would have been freely shared.

This past summer, I received an angry email from a National Institutions of Health researcher who had been denied access to one company's exciting new drug candidate. He refused to sign an MTA because the company put tight restrictions on publication as the price of access to the molecule. He moved on to other research.

The Madey v. Duke case illustrates where patent fever at the nation's universities has led us. More and more patents are being sought on "technologies" that a few decades ago would have simply been called basic science. More and more restrictions are being placed on material transfers that are key to exploratory research.

At the least, universities and companies are using these patents to nickel and dime each other to death. At worst, they're being used to make outrageous ownership claims on the output of future scientific endeavors.

That doesn't foster innovation, which was the ostensible purpose of the Bayh-Dole Act. That retards innovation. Maybe it's time to revisit that law and tear down the fences it has erected on the intellectual commons.

Posted by gooznews at October 11, 2004 05:24 PM