Some Issues Regarding Entrepreneurial Universities and Intellectual Property

Author:Heiki Pisuke, Aleksei Kelli

1. Introduction - 2. University as entrepreneur or entrepreneurial university? - 3. Intellectual property as a prerequisite for an entrepreneurial university - 3.1. Significance of intellectual property in society - 3.2. Intellectual property regulation supporting the entrepreneurship of a university - 3.3. Dilemma - to patent or publish? - 3.4. Intellectual property policy aimed at openness - 4. ... (see full summary)


Heiki Pisuke

Professor of Intellectual Property Law, University of Tartu

Aleksei Kelli

Lecturer of Intellectual Property Law, University of Tartu

Some Issues Regarding Entrepreneurial Universities and Intellectual Property

1. Introduction

Historically, the main tasks of a university have been instruction and research. Alma mater has been a benevolent and kind mother feeding society with knowledge. The state has given its guarantees to such education and research activities at universities. Section 38 of the Constitution of the Republic of Estonia 1 provides that: "Science and art and their instruction are free. Universities and research institutions are autonomous within the restrictions prescribed by law".

The present reality is, however, that the university as an instructor and disseminator of knowledge is increasingly becoming a seller of knowledge. The objective of this article is to examine the change in the role of the university in society as well as some accompanying theoretical and legal issues. The article discusses whether the university is becoming a type of entrepreneur in contemporary society and which role is played by intellectual property in it. Of various types of intellectual property 2 , the article focuses only on some issues of the patent policy of the university. The examples are mostly based on the regulatory documents of two leading Estonian universities - the University of Tartu (UT) and the Tallinn University of Technology (TUT).

2. University as entrepreneur or entrepreneurial university?

The traditional activities of a university are instruction and research. In Estonian legal literature, the autonomy of a university has been defined through provision of instruction and research3. This gives rise to the question of whether such constitutional guarantees also cover the business and economic activities of universities.

The contemporary university has been subjected to the task of participating in direct economic activities and promoting the development of society as a whole. Today's keyword, both in the European Union and on the global level, is innovation, and the role of universities in developing the innovation of a society is considerable.

The European Commission communication "Putting knowledge into practice: A broad-based innovation strategy for the EU" 4 contains ten politically prioritised actions to implement the EU Lisbon strategy. Action 1 is directed towards the significant increase of "the share of public expenditure devoted to education and to identify and to tackle obstacles in their educational systems to promoting an innovation friendly society". Action 4 "Strengthening research-industry links" should contribute to the removal of administrative barriers which affect knowledge transfer between universities and industry. One of the aims is to encourage researchers' interaction with industry and their activities related to patenting, licensing and spin-off creation. Actions 7 and 8 are directed towards the enhancement of IPR protection. Special measures are introduced for universities by a special Communication 5 to provide "better education and innovation skills". Several other EU documents have been passed to enhance university and industry links in developing innovation6.

Estonian legislation proceeds from the traditional directions in the activities of universities when regulating the relations between universities and society. Section 1 of the Organisation of Research and Development Act 7 regards scientific and technological creation as part of the Estonian economy. The Universities Act 8 (UA), University of Tartu Act 9 (UTA), and also the statutes of the University of Tartu 10 (Statutes) set out as one of the missions of a university to provide services based on instruction and research, which are necessary for society11. The statutes of the Institute of Technology 12 operated by the University of Tartu imposes on the Institute of Technology, as an institution of the University of Tartu for research and development, the obligation to protect and commercialise the intellectual property of UT and to create a contemporary technological and material basis for filling the orders placed by entrepreneurs as well as state and other organisations in the fields of activity developed by the Institute of Technology.

The statutes of the Tallinn University of Technology proceed from different theoretical grounds. Subsection 47 (5) of the statutes of TUT 13 defines TUT as an "entrepreneurial university" that "shall promote the innovative activities of its membership, offer in an active capacity research and development services to society, plan profit-based activities and make allocations contributing to the development of TUT".

The new role of the contemporary university is also reflected in several Estonian state and university strategies. The Government of the Republic Strategy Paper "Estonian Success 2014" provides that in order to increase the competitiveness of the Estonian economy it is important to develop cooperation relations between enterprises, their clients as well as institutions of higher education, and research and development14. The development plan of the University of Tartu for 2008 (UT Development Plan) proceeds from the objective that "the University of Tartu shall increase intellectual capital through the transfer of knowledge and know-how as well as research and development activities, shall use it on a much wider scale in society, particularly in innovative production and knowledge-based politics, and shall considerably increase the profit derived from the implementation and protection of intellectual property"15. Further to that, the development plan of the Tallinn University of Technology for the years 2006-2010 16 (TUT Development Plan) provides that in the context of an entrepreneurial university, TUT shall promote the development of the national innovation system and technology and know-how transfer and extend contract-based cooperation with domestic large enterprises and organisations of the public sector.

To define the new role of the university in society, above all, two alternative questions must be answered: (1) has the university become a type of entrepreneur - an entrepreneurial university -, or (2) whether it continues to be a traditional university, but the traditional areas of activity of the university must be complemented, and participation in entrepreneurship must be included as a new area of activity. This also gives rise to the question whether the new role of the university should be clearly reflected in legislation as well.

The activities of universities are increasingly associated with the provision of commercial education, additional training and consulting services offered for a fee, organisation of research events based on the participation fee, commercialisation of intellectual property, which could be manifested in the creation of spin-offs 17 , licensing of intellectual property and its assignment, etc18. Both commercial training as well as research and development services constitute a rather significant part of the budget of Estonian public universities. At the same time, the bulk of the funds used for research in Estonian universities comes from the state budget. The share of private capital in financing research in Estonian universities is still relatively modest, if compared to the relevant proportions in the US , for example.

It is common knowledge that the task of a university is to participate in the promotion of the economic development of society. The state takes clear interest in financing research in universities. The classical areas of interest of the state to finance the research in universities comprise culture, health and national defence19. The need to ensure a healthy living environment must be included here as well. At the same time, the creation of prerequisites for financing research contributes to the economic development of the state. This prerequisite has been taken as the basis in the relevant research and development policies of the US , Japan and European Union. It is the extremely clear interest of the state in obtaining a specific service from the universities that does not allow for defining universities as classical entrepreneurs in private law in our opinion. Universities may engage in entrepreneurship within the limits of the tasks imposed by the state and the rules prescribed by the state. These tasks allow for referring to the contemporary university as an entrepreneurial university.

The category of the entrepreneurial university has established itself in specialised literature over the past few years. For example, the entrepreneurial university has been defined as a university that has a wide scale infrastructure for supporting internal enterprise. In addition to traditional fields, the activities of such a university include commercial courses, consulting services, the patenting of its inventions, licensing of the results of various creative activities deriving from the university and establishment of start-ups20. The contemporary university has become an important part of creative industries21. The role of the university in creative management is expressed in the creation of new knowledge and its commercialisation, and to a lesser degree also in production.

An entrepreneurial university promotes a regulatory and institutional framework that differs from that of a traditional university. The regulatory framework must provide prerequisites...

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