Team work after lecture 3 about Uni/Industry collabs

1. Ufficio
Valorizzazione
Ricerche
UVR-SSSA
Reconsidering the Bayh-Dole Act and the
Current University Invention Ownership Model
M. Kenney, D. Patton
TEAM A
Angela
Chiara
Francesco
Tommaso
Ilaria
Agostina

2. Philosophy before BD
Government funded inventions should be freely available to all:
•$ 75 billion spent, per year, in government sponsored R&D
•Federal government held approximately 28.000 patents
•Fewer than 5% of those were licensed to industries for development/commercial
product, due to insecurity regarding their ownership
Bayh-Dole Act
Companies did not have exclusive rights and therefore were reluctant to invest
Taxpayers were not benefiting from their contributions
What is the Bayh-Dole Act (BD)?
An US normative act which provides universities with
the right to commercialize employees’ inventions made
while engaged in government-funded research (1980)

3. Bayh-Dole Act
Why the BD in 1980?
•Declining of the US productivity
•Rising competition from Japan
Solving idea
Universities are not just learning and research centres but
also sources of commercially valuable ideas
Policy and goals of the BD
•Promote the transfer of the benefits of federal funded research to society
•Encourage maximum participation of small business firms
•Promote collaboration between commercial concerns and universities

4. BD consequences in the different research field
Long history of commercialization of
university inventions
BD was only a formalization of
an extant movement
Few researchers had any interest in
commercializing inventions in biology
Due to the revolutionary results in the
biotechnology field in the ‘80s, BD found
its maximum application
Universities soon established Technology Licensing Officies (TLOs) in
order to manage intellectual properties through patents, copyrights and
trademarks and to take responsibility for commercialization
Engineering and chemistry Biology

5. The TLO-inventor relationship

6. It should
•expend resources to market and manage the invention
•negotiate a license contract with an outside firm
But in fact can impede technology transfer because
•It is dubiously more effective in search for licensees than the inventor
•Often its decision making is driven by money: concentrating on only
inventions with clear payoffs could inadvertently limit university research spin-
offs
•If the inventor wants to form a start-up, he has to pay a fixed fee to the
university to use his invention
The TLO-inventor relationship: the TLO

7. Faculty member
Largely immune to direct control and
supervision by the administration.
Corporate researcher
Funds and employment directly
controlled by managers
Solution
Encouraging disclosure by increasing their share of the invention’s income
However…
Tensions may arise between the inventor and the TLO if the former believes that the
TLO is investing insufficient resources in his invention
How can the inventor circumvent the university TLO?
•Feeding «grey markets»
•Establishing a firm to which transfer a patentable «discovery»
•Publishing the invention («open source»solution)
The TLO-inventor relationship: the INVENTOR

8. Non-exclusive
Licensing Model
Public Disclosure Model
IOM
Inventor
Ownership Model
WORM
Weaker
Ownership Rights
Model
V
S
Variants
Two alternative models

9. Ownership is directly decentralized to the inventors
Inventors can decide whether and how
commercialize the invention (TLO, themselves,
public domain)
Value is captured by the inventor,
perhaps providing University with
an automatic share
Inventor Ownership Model (IOM)

10. Benefits
•No contractual limitation to public disclosure
•TLOs’ role in commercializing inventions
No obligation to assist in the patenting of the laboratory inventions and their
prosecution
•No judgment based on the financial returns to University
Inventor Ownership Model (IOM)
Concerns
•Individual benefits based on public funding
University may receive a tithe
•Exploitation of university duties and resources without
sharing costs
•Determining ownership between multiple inventors may be
difficult
•Stifling the flow of information and material

11. Does IOM lead to the death of TLOs?
In a IOM
•TLOs should support inventors in the case they the
require support in commercializing the invention
•In most instances both the inventor and the TLO will
appreciate each others competences
•In case of disagreement it is better if the IP and the
risk of commercialization is directly linked to the
inventor
TLO and the Inventor Ownership Model
TLOs have specific competences in research valorisation to be
exploited by inventorsNO!!

12. Requires that all inventions generated through federal support be placed:
•on a non-exclusive basis
•in the public domain
Different results/incentives of the two solutions depend on the
industrial sector
•Open Source Software: Entrepreneurs use free software to create new firms (IBM)
•Pharmaceutical industry: No incentives to develop new compounds due to the lack of
a patent full protection. But some exceptions: penicillin and Taxol have been
commercialized
•Small biotechnology companies might not compete with large ones
Both solutions encourage T-T and progress
Since non-exclusive licensing is a “tax” and shifts the invention rents from one actor to
another, this variant would “socialize” a part of the value of the inventions
Weaker Ownership Rights Model
Non-exclusive license variant VS Public domain variant

13. Schematic comparison of universities ownership regimes

14. The University Ownership Model is faulty
This model is built around TLOs’ role:
Inventors invent, TLOs license and the Licensees commercializes
i) Critical relationship between inventor and licensee with TLOs just rent-hunters
ii) TLOs usually are unnecessary for the entrepreneurship and the diffusion of
university inventions
iii) TLOs’ revenues are important for their effectiveness but might become more
important then disseminating knowledge
Authors suggest to:
- Funding agencies could conduct experiments by funding
projects in which inventions have to be owned by inventors
- Compare these results with current BD model outcomes
Conclusion