Over the past several years, I have heard many complaints (from graduate students and faculty on the one hand, and venture capitalists or licensing excecutives for large companies on the other) about the difficulties associated with negotiating licenses or sponsored research agreements. One might naively imagine that such agreements are routine, at least at research universities. Many have a staff of technology transfer employees whose job it is to facilitate these agreements.
But the agreements are not usually so easy to close. In fact, the agreements are so difficult that (at least in places like the Bay Area) the easiest solution for faculty or students intent on seeing their ideas comercialized is to leave the university, either temporarily or permanently, to launch a startup or consult with an established company on a new product or service.
The biggest loser is the university. Or at least that's true if you believe that there is no need to worry that greater university-industry relationships will somehow corrupt university culture. Therein lies the rub. The fact is that many people both within and without the university believe that academics should be independent from the allegedly corrupting influences of commerce.
Nevermind the hypocrisy inherent in holding that view but, at the same time, encouraging faculty to compete for federal grant money that is distributed based on political values that are directly or indirectly influenced by the same corrupting commerce. Focus on the key premise: Does an increased flow of information back and forth between university and industry hinder the growth of knowledge.
The answer to that question must be no. Facts are gathered proactively in response to practical problems. It is these facts that form the basis for academic theory. Academics can collect them on their own, and should be encouraged to do so. But there is no way that academic institutions can keep up with the scale of production of data already ongoing outside the academic system. University-industry collaborations are the future of our global economy, and the university must adapt to the new reality in which the polite fiction of academic independence can no longer be respected. Academic independence -- to the extent that it ever existed in research universities -- has been replaced with dynamic balance, detente.
Which brings us back to the original problem. Suppose the top-tier research universities, whose endowments (not coincidentally!) are often significant portions of the top-tier venture capital funds were to demand that each of those venture capital funds pay an annual subscription for (say all non-biotech or pharma) university intellectual property on a non-exclusive basis. Exclusive deals would remain subject to negotiation. The funds would go primarily to preparation and prosecution of patent applications.
Imagine the collaboration that might result from the lowered transactions costs of collaboration. The alignment of interests between the university and its industry subscribers now permits seamless communication without concern of loss of patent rights or trade secrets. Inventors have better feedback on what, if any, applications are worth filing from industry, rather than from other faculty or from tech transfer office employees alone.
The endowments see reduced expenses -- no more patent prep and pros fees -- and additional income (in whatever is leftover from the subscription fees). Inventors are more likely to stay at the University rather than leave. Only the venture capital funds and companies that aren't paying for the IP that now goes out the back door have something to complain about, and then only initially. In a new equilibrium, a portion of the University becomes a kind of Bell Labs for the economy. Renegotiated employment agreements with star inventors bring billions of capital gains to the University directly, rather than indirectly through the venture capital funds, which charge at least 20% in carried interest plus fees.
But you have to believe that it would be good for faculty and students to talk more with engineers and scientists in industry. For the time being, most people don't.
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