Commercialization may not be the answer
I write to take issue with the basic premise underlying your recent articles on the use of intellectual property by universities. (Technology Transfer and Development; Putting Policies in Place. Issue no. 2006/5)
The fundamental question for a public university’s IP policy should not be: ‘How can the commercial potential of the property be maximized?’ but: ‘How can the transfer of new ideas be maximized?’ Commercializing IP is only one, and often the worst way to transfer new ideas. Concentrating on commercializing IP encourages universities to over-value their property leading to protracted negotiations through lawyers and other intermediaries which frustrates rather than facilitates the free flow of ideas necessary for research and innovation to flourish.
Revenue from licensing IP in fields other than biotechnology is a trivial proportion of university revenue. And of course, licensing revenue isn’t all surplus or ‘profit’ - commercialization units are very expensive with their business development managers, IP lawyers and accountants. They also impose heavy indirect costs on researchers in explaining their research and its implications to intermediaries. Joshua B. Powers reported in The Chronicle of Higher Education (September 22, 2006) that more than half of U.S. universities consistently lose money on technology transfer.
As the Australian policy and management consultant John Howard observes, researchers and research organizations will, except in very rare situations, earn more from being paid for their work input in contracts and consultancies than from licenses and royalties flowing from IP or from income earned in spin-out companies.
I therefore suggest that - with the exception of biotechnology - public universities simply give away most IP as a contribution to the general good. This could be subject to universities including in their intellectual property licensing agreements a standard ‘blockbuster’ or ‘jackpot’ clause that provides that should their intellectual property contribute to ‘blockbuster’ revenues of, say, $50 million over 10 years, there would be a sharing of revenue determined by a nominated commercial arbitrator.
From Gavin Moodie, Principal Policy Advisor, Griffith University, Australia.
As a Vice President of AUTM (the Association of University Technology Managers), I would stress that most university technology transfer offices do not have a primary goal of revenue generation. Professor Ogada (IP in Universities: Putting Policies in Place - WIPO Magazine Issue no...