[Infowarrior] - When Academia Puts Profit Ahead of Wonder

[Richard Forno]

September 7, 2008
Unboxed
When Academia Puts Profit Ahead of Wonder
By JANET RAE-DUPREE

http://www.nytimes.com/2008/09/07/technology/07unbox.html?pagewanted=print

“It is the policy and objective of the Congress to use the patent  
system to promote the utilization of inventions arising from federally  
supported research or development” and “to promote collaboration  
between commercial concerns and nonprofit organizations, including  
universities.”

— The Bayh-Dole Act, a k a the University Small Business Patent  
Procedures Act

THE law of unintended consequences is perhaps less a “law” than a  
simple statement of fact: We cannot accurately predict all the results  
of our actions. We may do something with the best of intentions, and  
sometimes even accomplish the good toward which we aim. Yet, at the  
same time, we are all too often surprised by results that didn’t occur  
to us beforehand.

The Bayh-Dole Act of 1980 started out with the best of intentions. By  
clearing away the thicket of conflicting rules and regulations at  
various federal agencies, it set out to encourage universities to  
patent and license results of federally financed research. For the  
first time, academicians were able to profit personally from the  
market transfer of their work. For the first time, academia could be  
powered as much by a profit motive as by the psychic reward of new  
discovery.

University “tech transfer” offices have boomed from a couple dozen  
before the law’s passage to nearly 300 today. University patents have  
leapt a hundredfold. Professors are stepping away from the lab and  
lecture hall to navigate the thicket of venture capital, business  
regulations and commercial competition.

None of these are necessarily negative outcomes. But more than a  
quarter-century after President Jimmy Carter signed it into law, the  
Bayh-Dole Act, sponsored by the former Senators Birch Bayh, Democrat  
of Indiana, and Robert Dole, Republican of Kansas, is under increasing  
scrutiny by swelling ranks of critics. The primary concern is that its  
original intent — to infuse the American marketplace with the fruits  
of academic innovation — has also distorted the fundamental mission of  
universities.

In the past, discovery for its own sake provided academic motivation,  
but today’s universities function more like corporate research  
laboratories. Rather than freely sharing techniques and results,  
researchers increasingly keep new findings under wraps to maintain a  
competitive edge. What used to be peer-reviewed is now proprietary.  
“Share and share alike” has devolved into “every laboratory for itself.”

In trying to power the innovation economy, we have turned America’s  
universities into cutthroat business competitors, zealously guarding  
the very innovations we so desperately want behind a hopelessly  
tangled web of patents and royalty licenses.

Of course, there is precedent for scientific secrecy, notes Daniel S.  
Greenberg , author of “Science for Sale: The Perils, Rewards and  
Delusions of Campus Capitalism” (University of Chicago Press, 2007).  
When James Watson and Francis Crick were homing in on DNA’s double- 
helix structure in the 1950s, they zealously guarded their work from  
prying eyes until they could publish their findings, to be certain  
that they would get the credit for making the discovery.

“They didn’t try to patent it,” Mr. Greenberg notes, “but somebody  
doing the same work today would certainly take a crack at patenting  
the double helix.”

In fact, it was the life sciences — in particular, biotechnology —  
that started universities down the slippery commercial slope in the  
first place. Even before the Bayh-Dole Act, pharmaceutical companies  
were eagerly trolling campuses, looking for projects to finance. After  
the law was passed, they stepped up their efforts, but now with  
renewed zeal for keeping potential trade secrets from competitors.

While patients have benefited from the growing supply of new  
medications, the universities have obtained patents not only for the  
actual substances but also for the processes and methods used to make  
them, potentially hampering discovery of even more beneficial  
treatments.

“Bayh-Dole tore down the taboos that existed against universities  
engaging in overtly commercial activity. Universities really thought  
that they were going to make it rich,” said Jennifer Washburn, author  
of “University Inc.: The Corporate Corruption of Higher  
Education” (Basic Books, 2005). “Each school was convinced that if  
they came up with that one blockbuster invention, they could solve all  
their financial problems.”

Ms. Washburn says that was “extremely wrong-headed.” Initially  
reacting to the law by slapping patents on every possible innovation,  
universities quickly discovered that patents were an expensive  
proposition. The fees and legal costs involved in obtaining a single  
patent can run upward of $15,000, and that doesn’t count the salaries  
of administrative staff members. Instead of bringing home the bacon,  
university tech transfer offices were throwing money into the void  
with little hope of returns.

To date, Ms. Washburn says, data gathered by the Association of  
University Technology Managers, a trade group, show that fewer than  
half of the 300 research universities actively seeking patents have  
managed to break even from technology transfer efforts. Instead, two- 
thirds of the revenue tracked by the association has gone to only 13  
institutions.

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.

“Severe disagreements have arisen over conflicting interpretations of  
the Bayh-Dole Act,” he said. “Large U.S.-based corporations have  
become so disheartened and disgusted with the situation, they are now  
working with foreign universities, especially the elite institutions  
in France, Russia and China.”

THE issue is further clouded by “reach through” licenses, complex  
arrangements used by many tech transfer offices. A reach-through lets  
the patent holder claim a share of any profits that result from using,  
say, an enabling technology, even if those profits come several steps  
down the market transfer line. Several universities are already  
embroiled in messy lawsuits trying to sort out who is entitled to what.

Perhaps the most troublesome aspect of campus commercialization is  
that research decisions are now being based on possible profits, not  
on the inherent value of knowledge. “Blue sky” research — the kind of  
basic experimentation that leads to a greater understanding of how the  
world works — has largely been set aside in favor of projects  
considered to have more immediate market potential.

In academia’s continuing pursuit of profit, the wonder of simple  
serendipitous discovery has been left on the curb.

Janet Rae-Dupree writes about science and emerging technology in  
Silicon Valley.