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IP policy shifts at major universities get rave reviews from corporate partners

By David Schwartz
Published: February 22nd, 2012

In a bid to both fire up innovative output and attract more private funding for research, at least two major American universities have announced big shifts in their IP policies with respect to industry sponsored research. Breaking with past practices that were in line with the provisions of Bayh-Dole in the government-funded research arena, Penn State University (PSU) has decided that industry-sponsored research will no longer come with the mandate that any resulting IP be owned by the university.

Meanwhile, the University of Minnesota (UMN) in Minneapolis has moved to greatly simplify its contracts for industry-sponsored research in a way that removes the up-front quibbling over IP property rights and potential royalties.

While both policies have sparked the usual grumbling about whether business and industry are getting too involved in academic affairs, they are getting rave reviews from the corporate community, and UMN administrators say their new policy has already lured in some new research dollars. Other universities have also taken note of these changes, and some have signaled that they may go in a similar direction. However, administrators at both UMN and PSU caution that they only moved on this issue after careful analysis of their IP-driven revenues and considerable debate, and they advise other organizations to follow a similar path.

The changes at PSU were prompted in part by a top-to-bottom review of all expenditures and revenues at the university, a process designed to identify opportunities for efficiency or savings, explains Hank Foley, PSU’s vice president for research. The data regarding sponsored research agreements stood out. “What I found was that the revenues [from these activities] were appallingly small and the expenditures were, frankly, very high,” he says. “That was my first inkling that there might be an opportunity to make some change.” A detailed article on the policy shifts appears in the February issue of Technology Transfer Tactics. To subscribe and access the full article, plus hundreds of archived case studies, best practices, and TTO success strategies, CLICK HERE.

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No Comments so far ↓

  • Mark Ciotola

    Presumably such new policies do not apply to patents arising from Federally-funded research? Or has a way been found to overcome the Bayh-Dole requirement of university ownership for such patents?

  • Robert N. Schmidt

    Bayh-Dole does not “require” universities to own the research. It “allows” them to own it. Using the Hewlett-Packard Stanford example, Stanford found it created much more value for the university by giving away the technology than by requiring big license fees.

    Some universities see that giving away their R&D more than compensated by:
    1. Companies pay the patent costs.
    2. Companies hire students part-time during their education, allowing them to obtain valuable work experience.
    3. Companies frequently hire those students when they graduate.
    4. Graduates staying in town working for those same companies tend to be more active in alumni activities, and contribute more to the university.
    5. Companies hire faculty part-time, subsidizing their income, making them happier and providing more research opportunities.
    6. That extra research can lead to more research for the university.
    7. Companies subcontract research, testing, and equipment use from the university, helping the school’s bottom line and keeping facilities utilized.
    8. Finally, the company entrepreneurs will die some time, and think kindly of the university (aka: Hewlett-Packard model).

    Some universities believe it is a much better long term deal for the university to just give away the research, or license under extremely favorable terms without a lot of conditions. They make up in volume what they loose in percentage.

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