IPAO Interviews Dr. Gerald Barnett
Director, Research Technology Enterprise Initiative
University of Washington
In this Q&A, IPAO sits down with Gerald Barnett, Director of the Research Technology Enterprise Initiative at the University of Washington, a 20-year technology transfer veteran with extensive work in university research contracting and intellectual property management and has developed programs that support university software developers. Barnett suggests that universities should allow inventors greater choice in how their research-based inventions are managed. Currently, the Ewing Marion Kauffman Foundation is sponsoring his work on creating new ways of transforming university innovation practices.
When it was signed into law almost three decades ago, the Bayh-Dole Act of 1980 was intended to facilitate economic development by removing federal bureaucratic barriers from the use of federally funded academic research so it could be publicly utilized, including the creation of commercially available products. Unfortunately, the law too often has been interpreted in ways that have unanticipated consequences, squelching creativity and innovation and causing animosity among the various stakeholders involved in moving innovation from the laboratory to the public.
IP Advocate: The Bayh-Dole Act was intended to lead to greater creativity, collaboration and commercialization of inventions made in the course of federally funded academic research. Has that been the case?
Dr. Barnett: Bayh-Dole expanded the ability of universities to elect title to federally supported inventions rather than leave those rights with the funding agency. It has succeeded in harmonizing patent rules and centralizing paperwork. But it is not working nearly as well or as often as entrepreneurs, inventors, companies seeking to collaborate with universities, and the universities themselves intended.
Dealing with research inventions is no easy thing. There's no straight line from invention to commercial deal. Many research inventions will never be products - and shouldn't be - they may be research tools, or become parts of standards, or serve as illustrations of one way to do things among many. Data from institutions like Stanford University show that roughly one in a hundred inventions is licensed for cumulative royalties of more than $1 million over the 20-year life of a patent. Between the limited likelihood of financial reward and the way the law has been interpreted by many universities, the question for many inventors becomes, "Why bother?"
IP Advocate: How has implementation of the Bayh-Dole legislation had the unintended consequence of squelching innovation?
Dr. Barnett: Bayh-Dole focused on harmonizing agency patent policies and distributing opportunities to promote inventions to universities across the country. It wasn't directly concerned with innovation, but with using the patent system to promote use of inventions, development of collaborative relations with industry, and support for U.S. small business and U.S. labor.
The law itself hasn't constrained innovation - but the way in which universities have implemented practice under it has had mixed outcomes. In response to the law, many universities established Technology Transfer Offices (TTOs) to act as a central reporting agency and to facilitate the selection of inventions that will benefit from use of the patent system. This mixed a regulatory function (reporting) with an invention management function (patents). The result was pressure to monetize patent rights rather than to create an environment that promoted innovation.
The TTO works great for paperwork reporting, but not so well when you have a diversity of inventions, from biotechnology and nanotechnology and software and composters, moving through a single office. Even if the TTO is well-funded and staffed, you still only have a one in a hundred chance of a monetary success worth talking about.
What universities haven't done well is the use of the patent system to build working relationships with industry, support the development of research and early adopting practice communities, or support inventor-based insights into commercialization directions. For this last bit, TTOs find themselves cornered between processes designed to identify inventions with great "commercial potential" and a demand that everyone get equal treatment. As a result, it's difficult, especially in public research universities, to mobilize resources in support of any particular invention - beyond filing a patent application.
Second, and just as important, many universities also established employment policies that compel inventors to agree to assign their inventions to the TTO. This is a subtle but huge transformation in how invention is managed within the context of university research. A hundred years ago, when Cottrell invented the electrostatic precipitator, he was working with a company, at the University of California. He used the patents to found Research Corporation, which then supported research throughout the country and served as an agent for other faculty who had inventions they felt could benefit from Research Corporation's expertise. The system was voluntary, not compulsory. And it gave rise to the idea of the research foundation, as later established as university affiliated at Wisconsin, Kansas, Washington State and elsewhere.
Bayh-Dole gave universities an incentive to wrap voluntary inventor interests with a process-based policy, anchored in contracting regulations. These were then extended for consistency, if not convenience, to cover all instances of invention, not just those made with federal support. As you know, this move to compulsory claims based on employment, rather than voluntary offer based on recognition of resources, has created tremendous issues.
When you think about it, Bayh-Dole set up a classic struggle between bureaucracy and innovation. After all, innovation threatens institutional norms that bureaucracy seeks to codify. Given the opportunity to do so, institutions - agencies and companies included - inadvertently bottleneck and suffocate bright ideas with process. It turns out that consistency, compliance, efficiency and avoidance of risk are the dominant virtues of a process approach to research innovation. Mobilization for a purpose, risk-taking to achieve an outlier advantage, and preparedness for rare events don't count for much.
IP Advocate: Is the problem with the law itself?
Dr. Barnett: It's important to note that the Bayh-Dole Act itself is not the problem. The law isn't perfect by any means, but it is not responsible for implementations. In fact, the law in this regard is very generous, well-crafted to provide for a wide diversity of implementations.
The problem lies with the university-side assumptions and policies that implement practices allowed under Bayh-Dole. Among these include claims to inventions made as a condition of employment, moving all invention management into a one-size-fits-all process of invention review and licensing, and fixating on the financial metrics of patent management on a case-by-case basis, rather than seeing inventions as one of a number of intangible assets arising in research that are often best managed together.
With regard to employment, those policies changed what researchers were doing by choice as an expression of their curiosity and creativity, to a compulsory obligation to their employer. It seemed to be the rational thing to do - capture everything and give back what one doesn't want. Bayh-Dole seems to require this with its requirement for written agreements with employees to protect government rights. But Bayh-Dole doesn't require the universities to take ownership of patent rights, or to decide for inventors whether to claim those rights. Universities took these positions on their own. Bayh-Dole was only an excuse to transform a voluntary approach to research invention to a compulsory system designed for consistency, compliance, efficiency and avoidance of risk. The issue is subtle and nuanced, but devastating, and worth drilling into the details to understand.
IP Advocate: What would you suggest to break through the bottleneck?
Dr. Barnett: For one, I think we need to introduce the notion of choice, particularly within those institutions that make disclosure and assignment of faculty intellectual property compulsory.
In most places, the TTO still has the option to decline to require assignment of invention rights to the university. A TTO can also generally "license through" the rights assigned by the inventor to a company of the inventor's choice, whether a start up or an organization that has as one of its primary functions the management of inventions.
Right now, these options require, often, some rather intense negotiation. An inventor cannot simply request an option this way and have it happen. The TTO tends to argue that it must make a decision about commercial potential first. Obviously, if the inventor wants the rights personally, or has an interest in a start-up, then the rights must have commercial potential, and the university will want to hang on to the patent management to get its piece of the action.
The reality is, TTOs cannot bring themselves to let go. In some cases, a TTO can, with agency approval, waive ownership rights directly to the inventor. Doing so requires making an unselfish decision and accepting the risk that someday an administrator may challenge you for it. Most universities have much more limited resources for technology transfer than they should for the size of their federal research commitments. These schools need to be strategic in applying those resources, choosing projects for which they anticipate the likelihood of success. Success should be broadly defined as socially desirable outcomes - whether involving royalties or simply widespread adoption and use.
But many TTOs don't have any means of showing their administrative supervisors what this kind of success actually means for their universities. The only thing that counts is money, and that presses TTOs to monetize patent rights rather than use them more broadly to promote the use of federally supported inventions. For the most part, this is impossible.
If the best outcome a TTO can anticipate is 1 in 100 inventions at the top research universities embedded in massive industry clusters with a history for innovation, for the rest of the research universities, there has to be another way - or one ends up like a greedy dragon sitting on a heap of patent rights in a cave, unable to put them in play and unable to give them up until they are of no use to anyone.
Industry ends up designing around them, or ignoring them, and inventors with any motivation at all look for ways of working around the system. There are a ton of ways of avoiding a university claim - all very legal. Some university policy folks believe it is their calling to close these workarounds. In doing so they fail to see that by making the system even more compulsory, they destroy the very creative class culture that makes invention important as an opportunity to drive innovation.
When faculty inventors realize the odds are against them in the TTO, what they want more than anything is choice. Choice to choose an alternative office that is better aligned with their area of discovery, with the industry that would be most attentive, with the investors who have experience reviewing this sort of opportunity.
Choice to launch out on their own or with their graduate students, to work the investment community directly, or to make their inventive work freely available to all.
Choice to partner with companies that have immediate use for inventive work, or with research-directed foundations to coordinate the deployment of their work.
Universities could do a whole lot more to enable choice among their research investigators and inventors. I cannot imagine a huge outcry from university inventors that they are given choices - even if the choice is between university ownership or that of the federal agency.
Choice reveals character and commitment. Choice places responsibility where it matters most. Choice opens up diverse ways of managing invention based on differences in research objectives, practice communities, value chains and industry practices. Choice allows universities to relax regarding industry collaborations, and rather than reciting policy and principles, allows a university to let industry make a case directly to inventors, if the inventors want it that way. This way has its own challenges, but to explore it means being open to innovation rather than insistent on processes.
With choice, everyone has a greater chance of success.