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Science Technology & Society http://sts.sagepub.com/ Hochschullehrerprivileg−−A Modern Incarnation of the Professor's Privilege to Promote University to Industry Technology Transfer Dov Greenbaum and Christopher Scott Science Technology Society 2010 15: 55 DOI: 10.1177/097172180901500103 The online version of this article can be found at: http://sts.sagepub.com/content/15/1/55

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Hochschullehrerprivileg—A Modern Incarnation of the Professor’s Privilege to Promote University to Industry Technology Transfer DOV GREENBAUM and CHRISTOPHER SCOTT Technology transfer offices are ubiquitous institutions within American universities. Most are underfunded and understaffed, will never turn a profit, drain limited university resources and potentially hinder innovation and knowledge transfer. Yet, inexplicably, new offices continue to be established. This article suggests that the continued hype over rare but lucrative blockbuster patents fuels much of this unnecessary expansion. These new offices, essentially mandated to discover the next big one, tend to make poor patenting and licencing decisions that effectively impinge on university knowledge transfer capabilities. This article suggests that although these offices may be necessary for some major research institutions, the bulk of academic research universities ought to share regional transfer offices that can benefit from economies of scale and experienced technology transfer officers. This article further suggests that the current status quo is the result of the somewhat arbitrary granting of patent rights to universities by the Carter era Bayh–Dole Act. Instead, this article proposes, in addition to a general overhaul in the methodology for transferring university knowledge, that a hochschullehrerprivileg or ‘professor’s privilege’ be established: academic inventors, not their bureaucratically bogged-down universities, should retain the patent rights that can then be licenced through the regional technology transfer offices without the, often ineffectual, university intervention. In addition to streamlining the current technology transfer process, such a system will also create strong incentives for research scientists to transfer knowledge and become more entrepreneurial. Although an overhaul of the American structure, while

Dov Greenbaum (corresponding author) is a Fellow, Center for Law and the Biosciences, Stanford Law School, Stanford University. E-mail: [email protected] Chris Scott is the Executive Director of the Program on Stem Cells in Society, Stanford Center for Biomedical Ethics, Stanford University. Science, Technology & Society 15:1 (2010): 55–76 SAGE Publications Los Angeles/London/New Delhi/Singapore/Washington DC DOI: 10.1177/097172180901500103

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56 „ Dov Greenbaum and Christopher Scott necessary, seems unlikely, such a system can nevertheless be implemented in both developed and developing countries that are futilely seeking to reproduce American successes through mimicking the current American Bayh–Dole arrangement.

Introduction

ONCE DUBBED ‘POSSIBLY the most inspired piece of legislation to be enacted in America over the past half-century’, (Editor 2002: T3), Bayh–Dole and its potential effects on science have been examined, praised and derided in the months leading up to, and following, the recent twenty-fifth anniversary of its enactment (US Senate Bill 1785, 109th US Congressional Session [2005]) (Boettiger and Bennett 2006: 320). Anecdotal evidence has suggested, and numerous studies have attempted to prove, how the Patent and Trademark Act Amendments of 1980, popularly referred to as Bayh–Dole, has created the biotechnology revolution or distorted the academic mission of American universities, brought incredible untapped wealth through licencing fees to universities or reallocated scarce research away from basic science research (Blatt 2006; Caulfield et al. 2006: 1091; Etzkowitz et al. 2005; Mowery and Ziedonis 2002: 399). Most dramatic are the claims and counterclaims that it has turned white-coated, pure-hearted, curious scientists into money-grubbing corporate shills (Bok 2003; Huff 2006: 30; Johnson 2004; Kennedy 2005: 1375; Krimsky 2006: 10; Washburn 2005). Much of the debate is based on assumptions that Bayh–Dole has been primarily responsible for the phenomenal growth in science and technology in the United States (US) during the past quarter century, and concurrently, that it has been responsible for a shift in academic research, leading to a devaluation of basic science research. Yet, Bayh–Dole has been, arguably, only a small player in the introduction of a patent culture into academic science (Mowery et al. 2004). To wit, while the commodification of research and the corporatisation of the university may have been somewhat spurred by Bayh–Dole, trends that have led to the current state of university research programmes, shifts in academic science principles and university patenting inclinations predate the Act. There have been a plethora of studies devoted to teasing out the factors and analysing the effects of Bayh–Dole and of patenting on American academia (Jensen et al. 2003: 1271; Owen-Smith and Powell 2001: 99; Owen-Smith and Powell 2003: 1695; Powell et al. 2007: 121; Science, Technology & Society 15:1 (2010): 55–76

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Thursby and Kemp 2002: 109; Thursby J.G. and Thursby M.C. 2000 ; Thursby J.G. and Thursby M.C. 2003: 207). Current studies suggest that patenting in academia (that is, one of the stated goals of Bayh–Dole) in all likelihood does not impede research, does not alter the research goals of universities to more commodifiable research directions or even promote a veil of secrecy. In fact, it has been shown through multiple studies that patenting positively correlates with the patentees increase in citations and publications (Agrawal and Henderson 2002; Azoulay et al. 2006); the same phenomena are also found in European jurisdictions (Breschi et al. 2007: 101). Moreover, even those who continue to see Bayh–Dole as a central component leading to a more corporate-looking academia must concede that infusing corporate ideals into scientific research does not represent a significant paradigm shift. The modern science establishment has long had the anti-Mertonian vices of secrecy, rivalry and inducements outside of noble curiosity and concern for social welfare (Blumenthal et al. 1997: 1224; Campbell et al. 2002: 473; Walsh and Hong 2003: 801). Thus, as given, this article assumes that patenting and commodifying public research for private profit can provide positive benefits to academia and to society. Other methodologies, such as open source, are also useful in finding practical applications for basics science research, but a full discussion is beyond the scope of this current piece (Rai 2005: 131; Rai et al. 2004: e56). With patenting academic research predating Bayh–Dole, ironically, the Act’s most likely effect has been the weakening of alliances between academia and industry and the potential obstruction of innovation. The vesting of ownership in universities and all its related regulatory hurdles, the potential to accrue patent income to bolster sagging research budgets and the intensified need by industry for academia as a source of new innovation has led to a explosion of technology transfer offices (TTOs) (The Association of University Technology Managers [AUTM] 2004). As gatekeepers, these TTOs must enforce Bayh–Dole’s mandate, imposing impediments that encumber innovation and strain relationships with industry (Leaf and Burke 2005: 250; Mowery et al. 2004). The drive to find alternate sources of funding for basic research in the face of stagnated National Institutes of Health (NIH) budgets only aggravates this increasingly rocky relationship (Loscalzo 2006: 1665; Zerhouni 2006: 1088). Science, Technology & Society 15:1 (2010): 55–76

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In reassessing the current state of university to industry technology transfer in the US, this article describes the cornerstones of today’s technology transfer environment: blockbuster patents and exclusive licencing arrangements, the explosion of institutional licencing offices and the vesting of patent ownership to universities. These factors have been put forward as contributing causes to deterioration in university–industry relations, and subsequent failure to satisfactorily return government investments in basic research to society. As a potential solution, we revisit the European notion of ‘professor privilege’ as a possible model to invigorate American technology transfer, and as an alternative to other countries considering incorporating a Bayh–Dole-like system. Blockbuster Patents: Windfalls or Pipe Dreams?

A driving factor in the profusion of TTOs has been the highly publicised success of blockbuster patents, a term broadly and indiscriminately used to refer to patents that have brought in relatively large revenue streams (Eisenstein and Resnick 2001: 881). The money was a wake-up call to faculty and administration. In fact, successful patents tend to breed faculty interest: TTO’s will often point to jumps in the number of invention disclosures following the introduction of large revenue streams from other faculty members on campus. University patent blockbusters are rare but legendary (Stevens and Burley 1997: 16), often resulting in millions of dollars in windfall revenue. Patent shorthand reveals well-known inventor names such as Cohen-Boyer, Axel-Wigler, Cabilly and Chakrabarty or alphabet soups of groundbreaking technologies like EPO, PCR, Bt, RNAi and hGH. The belief that each individual university has the potential to licence the next big blockbuster patent often serves as an undercurrent in daily workings of many TTOs (Rogers et al. 2000: 47). Notwithstanding their rarity, the irrational exuberance and expectation of achieving a blockbuster continues to drive faculty, administration, regional elected officials and the technology transfer officers (Powers 2003: 26). More established offices, however, will acknowledge candidly that blockbusters are not something that you ought to expect or can ever plan for, they just happen. This mentality suggested, perhaps, that some university offices ought to be more grounded in the realities of academic research licencing. Science, Technology & Society 15:1 (2010): 55–76

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Reflecting their somewhat stochastic nature, blockbuster patents tend to differ somewhat in the particular licencing methodologies employed, the publicity brought to the university and the eventual nature of future interactions with industry. The biotechnology industry predominates as licencees of the university blockbusters—schools are more likely to see strong returns if they have a medical school (Bulut and Moschini 2006)—with smaller successes coming out of software and engineering. And, although the bulk of these patents are licenced exclusively, savvy TTOs have been able to substantially enrich their home institutions even through the non-exclusive licencing of basic science research tools as well (Pressman et al. 2006: 31). The bulk of the big blockbuster patent licences are over a decade old and their ability to bring in future revenue streams are rapidly coming to a close. Now more than ever, the increased number of TTOs and their extensive efforts to licence ought to be producing the next generation of blockbuster patents, but they are not. This current blockbuster dry spell may indicate a more conservative approach by the biotechnology industry in particular, in licencing academic innovation. Industry is showing a growing unwillingness to licence and invest in early stage unproven basic science research; proof of concept is no longer sufficient. Rather, companies are increasingly requiring universities and their faculties to hold onto and further develop their technologies before eventually agreeing to licence. Bayh–Dole By-products: Technology Transfer Offices

Universities of all stripes and sizes maintain TTOs, the vast majority of which must be subsidised by their parent institutions. Three-fourths of new offices were formed in the boom years of 1983–99, coincident with the peak of blockbuster revenue streams (Figure 1). These offices experience tension from all sides to promote faculty research, provide licence revenue to universities, encourage local regional growth and market commercially viable technologies. And increasingly, TTOs are expected to be socially responsible, often forgoing all the above to better the greater society (Check 2006: 412; Mimura 2007: 295). But, with the need to prove their mettle and to satisfy all the interested parties, many of whom remain focused on the revenue-centric model of technology transfer, TTOs, particularly the younger ones, will continue to patent a Science, Technology & Society 15:1 (2010): 55–76

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Source: AUTM 2006.

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greater number of their research disclosures, negotiate less effectively and sign deals that may not be best for the researchers or the university in the long run. The Association of Technology Managers publishes a survey every year on the status of the industry and although biased towards TTOs, they nevertheless provide some of the most comprehensive data currently available on TTOs. The most recent US TTO figures (FY 2006) show a median revenue of just over a million dollars, although the top ten most successful TTOs brought in an astounding 732 million dollars (AUTM 2007). Overall, university TTOs generated 1.25 billion dollars in revenue from licencing and other related activities. In comparison, in 2001, the top ten universities took in almost 511 million dollars out of the 1.1 billion dollars that all research institutions took in. Note, however, that over the same period, invention disclosures and patent applications increased by 50 per cent. The UK and European TTOs tend to do somewhat worse than their American counterparts (Agres 2003: 55). Notwithstanding this generally dismal outlook for TTOs, there remains pressure from a growing number of entrepreneurially minded scientists and innovation-minded regional elected representatives for universities to continue to open new offices. Unfortunately, the research threshold for opening a new office is often significantly lower than the economic threshold for maintaining an adequately staffed office. As a result, many smaller universities have offices that tend to be somewhat sparse. And, although many new offices will poach experienced technology transfer officers from other established institutions, newer offices nevertheless end up going through the same maturation processes and growing pains as the more established offices and repeating the same rookie mistakes that older offices made decades earlier. Many newer TTOs, and even some very established offices, will admit that it is very hard to say no to revenue opportunities. Without the experience and business expertise of larger, more mature offices, smaller offices are likely to do more harm than good through sub-optimal licencing practices that result in licenced technology that becomes shelved by an exclusive licencee and inaccessible for commercialisation by the inventor himself/herself or other licencees, and overly aggressive patenting that quickly consumes limited resources. Despite these critiques and concerns, it is often the faculty themselves that clamour for a local office. Additionally, university administrators, Science, Technology & Society 15:1 (2010): 55–76

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enamoured with the possibility of developing significant patent revenues, will decide that their university needs its own office, just like the larger institutions in town. Typically, these varied inducements for the creation of an office will be reflected in the nature of the administrative control of that office. While no office will claim to be in existence solely for the altruistic goal of technology transfer, those offices that fall under the research arm of the university are more likely to at least pay lip service to the tensions between revenue maximisation and greater social welfare. Those under the rubric of the business side of the university are often forced to see their mission driven principally by revenue opportunities. Indicative of the optimistic attitude driving TTO expansion, there have not been any recent reports of offices closing down, notwithstanding their inability to show a profit. Going Central

Instead of the traditional TTO model, one could imagine a situation wherein most universities, with the exception of the few very large research institutions, look to regional offices that take advantage of economies of scale to provide the basic technology transfer functions. These regional offices can be further divided into smaller offices focusing on a particular technology sector as different sectors tend to have radically different notions of optimal technology transfer policies and methods. Office Structure

This office could be structured in a number of ways. The office could be run as a collective resource of the local universities much like a core electron microscopy laboratory is run as a core resource for multiple laboratories. The NIH or the National Science Foundation could provide the initial start-up costs for such an office in keeping with their goals of transferring their funded technologies for eventual commercialisation. Also, the office could potentially be set up as a private governmentsponsored enterprise (GSE) supported with public funding. The State of Oregon has recently introduced legislation providing a 60 per cent tax credit to taxpayers who donate to TTOs (Oregon Innovation Plan: Senate Bills 579 and 582 and House Bills 5508 and 5035). Unaffiliated with any particular university, these not-for-profit, faculty-driven TTOs may be Science, Technology & Society 15:1 (2010): 55–76

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less inclined to simply aspire to lucrative licencing deals and focus more on promoting commercialisable technologies and the needs and goals of faculty. Alternatively, a government agency could be set up on the model of the US Federal Reserve, with long-term apolitical appointments of technocrats who would preside over a system of regional offices. And like the Federal Reserve, the system of regional TTOs could be designed to be independent of the Federal government, meeting its operating expenses primarily from its own business model. The independent nature of the technology transfer system is important. With the possibility that the patenting and licencing of some academic innovations might become politically contentious, particularly in hotly debated areas such as cloning, genetic enhancement, abortion and stem cells, there may be concerns that the patenting and licencing of innovations will be directed by immediate policy concerns rather than a desire to promote science and innovation. Independent of the exact structure of the office, it is crucial that the office be designed such that it has the infrastructure, informatics and incentives to effectively and efficiently commercialise academic innovation. Office Funding

Funding for these offices could come from supporting universities, the government or independent financial investors. To attract investors, the TTO could bundle, package and sell what essentially amounts to an aggregate of each scientist’s risk of success, as complex financial instruments. These asset-backed securities would have relatively predictable cash flows from licencing fees and would be sold to institutional investors on the same or similar secondary markets that deal in mortgages or insurance policies, providing a continual flow of funds back into the central office for operating expenses. Government subsidies or a direct line of credit with the government could make up any shortfalls. Further, like Fannie May and Freddie Mac (the Federal National Mortgage Association and the Federal Home Mortgage Corporation, respectively), such an institution could be exempted from taxes and from the expensive process of registering the securities that they would sell. As Fannie May and Freddie Mac securities are not guaranteed by the full faith and credit of the US government, these regional offices might need to further incentivise wary investors. Science, Technology & Society 15:1 (2010): 55–76

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These larger regional offices are more likely to have the funds to hire the necessary staff to deal with the needs of both scientists and businesses and to write consistently strong and sensible patents at relatively low costs. The impact of a skilled staff in a TTO cannot be underestimated. Recent research suggests that a well-staffed TTO could substantially increase returns on innovation (Heher 2005: 207; Nilsson 2006; Siegel et al. 2003: 111). Further, studies have also shown that long-term trust relationships between technology transfer officers and industry are integral for initiating and facilitating knowledge and technology transfer. Transaction costs would also be minimised and risks associated with failed patents and licences spread across a much larger entity, and industry licencees would negotiate with and be responsible only to the regional agency and not with multiple individual unique university licencors. A larger regional agency can also deal with a common problem in Intellectual Property (IP) licencing, particularly in the high-tech industries; often, a single commercial product will require the licencing of multiple patents—frequently owned by multiple inventors and universities. With every research institution independently demanding their fair share of the revenues for their particular licenced innovation, it quickly becomes unfeasible to commercialise the product; revenues are overwhelmed by licencing fees (Gewin 2005: 948). A central licencing agency might effectively alleviate the problem by bundling the licences and providing them for significantly less than licencing each patent individually. Bundling may also provide distribution for unknown and untapped patents. Regional strategies draw support from other models. Auction houses that simply list patents have been able to draw substantial interest in their products. Regional clearing houses that control hundreds of patents have shown promise in agricultural biotechnology (Graff and Zilberman 2001: 1179). Reacting to the growing interest to quickly monetise revenue streams, companies are being established to purchase these revenue streams, already, in effect, quickly divorcing the university from its licence and its patent. To further incentivise universities and inventors to use a regional agency, the United States Patent and Trademark Office (USPTO) could consider relaxing patent rules and fees when filing through the centralised TTO. For example, recent USPTO regulations limit the number of claims Science, Technology & Society 15:1 (2010): 55–76

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in a filing to a total of twenty-five, with a maximum of five independent claims (USPTO 2007). The USPTO could potentially relax these restrictive rules when a university patents and licences through a regional TTO. Potential Problems with Regional Offices

The creation and implementation of these regional offices do present potentially insurmountable problems. Getting academic institutions to work together towards shared goals is difficult, if not impossible. Licencing strategies may be different, as well as approaches to collaboration, especially when technologies overlap. Consensus-based governance can thwart effective and timely decision making, causing potential licencees to look elsewhere. Issues of turf and control figure into many large university systems: centralised TTOs may scupper the entrepreneurial actions of a satellite TTO. Further, even when the institutions can agree on shared goals, their methods and policies for achieving those goals are typically stubbornly incompatible. Universities may be convinced that their in-house TTOs can better maintain close ties with their faculty. Additionally, with the responsibility to prosecute so many patents and without any profit motive, a regional office lacks the proper incentives and possibly, even the manpower to create high-quality patents that will stand up in litigation. Universities that find themselves on the losing end of such litigation may end up suing the patent prosecutor for malpractice, effectively chilling the relationship between the regional TTO and the school. Essentially, the universities stand to lose the most from such a regime and are most likely to raise issues with this proposed system. One way to resolve these tensions and difficulties is to remove the university as the central component in technology transfer. After a quarter century of Bayh–Dole and a culture of patenting, the individual scientist may now have the greater motivation, technological insight and wherewithal to effectively transfer the technology to industry without the university as a middleman. Returning to Hochschullehrerprivileg

The hochschullehrerprivileg or ‘professor’s privilege’ typically exempted faculty from the traditional patent rules requiring employees to grant their patent rights to their employers. The privilege, based on a universal concept Science, Technology & Society 15:1 (2010): 55–76

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of freedom of inquiry, granted the professor, as a sole beneficiary, right to file and prosecute a patent application and if successful, seek a licence to commercialise the discovery (Kilger and Bartenbach 2002: 1175). Historical Hochschullehrerprivileg

European hochschullehrerprivileg was all but abolished in favour of more Bayh–Dole-like legislation, most recently, in Denmark (2000), Finland (2007), Germany (2001) and in Austria, in 2002, after the government argued that the cost of filing patent applications outweighed the entrepreneurial ambitions of scientists, a calculus that, according to critics, stifled commercialisation of university research and resulted in universitybased research accounting for only a fraction of the patented innovations (Kelly et al. 2007; Lissoni et al. 2007; Sellenthin 2006). While some post-professor privilege analysis has implied an increase in academic patenting (Huelsbeck and Menno 2007; Ledebur and Buenstorf 2008), other follow-ups to the change in German and Danish law have been inconclusive as to any added benefit to society—that is, the commercialisation of academic science (Crespi et al. 2006; Larsen et al. 2007)—or suggest negative effects (Sellenthin 2004; Valentin and Jensen 2007: 251). Today, while formerly popular in the European Union (EU), all but Sweden and Italy have officially subscribed to the university ownership model. And, although Italy provides for a share in the revenue to go to the home institution of the researcher, Swedish law, which is strongly supported by the Swedish Biotechnology Industry Organisation (BIO), allows the researcher to retain the entire revenue stream (Sweden BIO 2005). One can suggest many reasons for this radical switch but it is likely that many were blindly enamoured with the successes of their American counterparts, a success that is often wholly attributed to Bayh–Dole. In addition to the false hopes related to perceived success of Bayh–Dole, European researchers often lack the entrepreneurial spirit of their American colleagues who have grown accustomed to the commodification of publicly funded basic science research and, as such, are unable to actualise the potential benefits of a hochschullehrerprivileg regime that requires a substantial amount of self-motivation and business savvy. Notwithstanding European efforts to emulate Bayh–Dole by abolishing the professor’s privilege in favour of university ownership, variations Science, Technology & Society 15:1 (2010): 55–76

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of ‘inventor’s law’ are still practised elsewhere in the EU, and in many cases, academic research patents are still not wholly university owned (Geuna and Nesta 2006: 790). In France, though the university has the right to own patents, in principle, university-owned patents are rare. Austria, Germany and Finland (and to some degree, Belgium) still grant the inventor ownership of the innovation, but the university has the first right to claim the invention within a certain period—after which the invention is forfeited to the initial inventor (Kelly et al. 2007). Other EU countries like Greece, the Czech Republic, Lithuania and Denmark provide for a reversion of rights back to the inventor if the university does not act on its rights quickly upon notification of the invention by the inventor (ibid.). Recent reports show that despite concerns that university administrations are needed to stimulate patenting activity, the European universities’ contribution to domestic patenting, in large part still due the autonomous actions of inventors, appears not to be competitive with their US counterparts (Lissoni et al. 2007). The concept of a professor’s privilege was not limited to Europe; Japan provided a variation of this privilege to researchers, within certain funding guidelines, at all national universities between 1978 and 2004 (Kelly et al. 2007). Unfortunately, the particular nature of the regulatory scheme resulted in Japanese researchers surreptitiously granting their rights to the patentable innovations to industry collaborators in exchange for funding. Eventually, the abuse of the system resulted in a number of new legislative acts that granted the professor’s rights back to the universities; graduate students nonetheless continue to retain their rights (ibid.). Like many of their European counterparts, a number of Japanese institutions will—through a self-imposed obligation—grant the rights back to the inventors if there is no administrative action on the patentable invention after a short period of time. A vestige of hochschullehrerprivileg even exists in the US universities: inventors retain the right to request title to inventions if they believe the university has not made a sufficient effort to patent or licence the discovery. A Modern Hochschullehrerprivileg

When Bayh–Dole was initially passed; universities—with their distinct profit motives—were necessary to enable a nascent technology Science, Technology & Society 15:1 (2010): 55–76

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transfer system. But things have changed: the patent culture has now become so pervasive in American academia (Schachman 2006: 6889) that inventors may be poised to benefit from a new form of hochschullehrerprivileg. The hochschullehrerprivileg failed in Europe because an invention was more likely to languish rather than licenced, given the lack of motivation to patent. Although their European counterparts lacked, and continue to lag behind, in entrepreneurial spirit, Bayh–Dole has effectively mainstreamed patenting in American academia. Incentives are not lacking in the US where technology transfer officers are seeing an increasingly self-motivated research community; the vast majority of basic science researchers no longer need to be convinced of the social importance and potential personal rewards resulting from patenting, they need only look down the hall at their successful colleagues. More often than not, underfunded and understaffed TTOs have difficulty staying abreast of new research coming out of their institution, especially as universities with teaching hospitals and burgeoning clinical programmes try to capture the value of inventions for medical devices, bioinformatics and translational programmes that yield new discoveries in drug delivery and gene therapy. Institutional systems rely wholly on the researcher’s discretion for disclosure; and even then, the number of papers published by universities far outweigh the number of disclosures sent to their TTOs. Entrepreneurial researchers—a label that is becoming more commonplace—have a significant incentive to disclose their invention and get their innovation commercialised and marketed, not just licenced, with the potential for being shelved or holding up an industrial competitor, as is sometimes the case when a TTO licences. These personal incentives are integral, given that an invention with an interested and involved inventor is more likely to succeed than one without. In contrast, TTOs are more likely to focus their efforts on the perceived blockbusters, sidelining less prestigious but potentially equally important innovations. These offices, given the pressures to perform and profit, are unfortunately forced into a situation where they are more likely to licence without concern for the commercialisation of the invention, but rather focusing on licencing revenue. A modern hochschullehrerprivileg system would be an opt-in system. Every researcher with a patentable invention would have a short Science, Technology & Society 15:1 (2010): 55–76

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window—optimally between two and six months from disclosure to the institution—within which he/she could opt to retain the patent rights (or his/her share of rights within a larger group of researchers) to his/her innovation, after which these rights would revert to the university. Once reverted, the university would still grant a share of revenues, if any, to the inventor. Given the time commitment required to licence and market an invention, it is likely that under this system, most of the inventions, albeit probably the least promising, would nevertheless revert back to university ownership which would then pass them on to the regional TTO. Entrepreneurial researchers are often best suited to shepherd their innovation through to commercialisation (Rozek and Dickensheets 2006) and would be most likely to form the majority of researchers who would opt in. These researchers may also exploit their bonds with industry—often former protégés, postdocs and graduate students will end up in industry— strengthening relationships previously weakened or abandoned by TTOs and creating closer intellectual and fiscal ties. Most faculty entrepreneurs tend to self-select, forming the core of a university’s patenting estate. These individuals are often better at guiding inexperienced scientists through the disclosure, patenting and licencing process. In some cases, groups of inventors will organise inside of academia in order to mentor new faculty, speed innovation and encourage technology transfer.1 Once an investigator opts in to ownership, he/she can choose the unlikely path of patenting, marketing and licencing the innovation at his/her own expense, or allow the local TTO to do the work. Similar to the growing number of open source scientific journals which charge the researcher upfront fees in the thousands of dollars to support the editing and publishing of their research, academics can look to their research grants to support analogous patenting charges. One could also imagine that given the costs and knowledge necessary to do this alone, a cottage industry of unaffiliated TTOs would grow up around these entrepreneurial inventors where communications would take place largely via the web, dispelling the need for immediately local TTOs. Already, external, non-profit resources such as Australia’s CAMBIA provide academic entrepreneurs with patent database and Intellectual Property Rights (IPR) expertise (Jefferson 2006: 13). Alternatively, unaffiliated but publicly financed regional TTOs, similar to those outlined Science, Technology & Society 15:1 (2010): 55–76

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earlier in the article, could take on the task of patenting and marketing these innovations. Although Bayh–Dole was not designed for universities to recoup research costs, many universities currently see licencing revenue as part of their budget, albeit just a fraction of a percentage for most universities. Thus, notwithstanding the granting of the rights to the invention to the academic researcher, under this system, the university will probably insist on retaining a percentage of the royalty stream. Researchers who choose to have their innovation patented and marketed through the local universitysupported TTO will have to provide a greater share of the revenue to the university to cover these costs. Universities might also retain the right to take over control of the innovation after a specified period of time if they can prove that the researcher has failed to patent and licence the innovation, as is the case in Italy. But, in contrast to Italy (which grants the researchers five years to act on their innovation), this should be a contractual rather than codified rule given that there may be significant opposition to the concept that an innovation ought to be patented and licenced rather than made public with no restrictions. Optimally, there would be a high burden of proof necessary to show that the inventor has failed to do anything with the innovation. Any attempts to take over control of a lucrative patent that has been marketed would not overcome such a burden. Exceptions would also need to be made for commercialised trade secrets. A hochschullehrerprivileg is not without its disadvantages. The system is not for all countries, as it requires a requisite minimum patent culture within academia. Universities will fight the loss of their potential cash cows and anticipated revenue streams. Additionally, for the most part, it requires a level of entrepreneurship and proficiency of faculty, many of whom, while motivated, are only just discovering the technology transfer system. A strong educational component is an obvious necessity. Further, the administrative costs associated with dealing with each individual inventor listed on the patent may be large and the process of dealing with multiple and potentially balkanised inventors, rather than a single monolithic institution, may create chaos. Nevertheless, while difficult, these hurdles are not insurmountable.

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HOCHSCHULLEHRERPRIVILEG—A MODERN INCARNATION „ 71 Conclusion

The current level of aversion to regional technology offices can be analogised to the aversion that many American researchers initially felt towards patenting federally funded basic science research a quarter century ago with the enactment of Bayh–Dole, which, although it did not introduce the concept of patenting academic research, helped to incorporate the idea within the public consciousness, eventually allowing even ‘old-school’ researchers to accept the inevitable commodification of their research. And like them, the efforts of the entrenched actors—that is, ‘old-school’ technology transfer officers and university administrators—will serve to hamper but not prevent the inevitable shift away from business as usual. New methods for commercialising and profiting off of innovations are quickly changing the field and challenging heretofore deep-rooted ideas, notwithstanding some aversion to these practices. One innovation that this article particularly champions is that of the abolishment of counterproductive, inefficient and grossly underfunded local TTOs in favour of regional offices that can take advantage of economies of scale. In discussions with many technology transfer officers, it becomes apparent that one of the greatest impediments to these regional offices is inter- and intra-collegiate politics, thus necessitating the removal of university bureaucracies from the technology transfer equation. When Bayh–Dole was enacted, universities were the obvious choice to shepherd academic research to industry and subsequent commercialisation; they had the motivation, the infrastructure and the wherewithal. Now, after nearly thirty years of Bayh–Dole, academic researchers no longer need the impetus of the university middleman to commercialise research; they can and should go directly to the TTOs themselves. Regional TTOs could better service faculty and eventually, provide potentially even greater levels of profit to the university (Perez-Pena 2005), but these research institutions must be willing (or eventually forced by statute) to give up their initial patent rights granted to them by the government by Bayh–Dole. To better promote science and innovation, it becomes clear that the academic researchers themselves need to outright own and control their output and the right to patent, hence the hochschullrerprivileg.

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72 „ Dov Greenbaum and Christopher Scott NOTE 1. At Stanford University, a group of inventor-physicians have formed the Medical Device Network. SPARK, a technology transfer programme for drug discovery was recently funded by the university provost’s office, and the University of California, San Francisco created a training programme in bioentreprenurship, now in its sixth year of operation.

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