Transferring Innovation

Fordham Law Review

Volumn 77, Issue 5, 2009, Pages 2169-2223

  Kesan, Jay P ^a  

^a ILLINOIS COLLEGE   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; ETHICS; HISTORY; HUMAN; INDUSTRY; LEGAL ASPECT; MASS COMMUNICATION; PATENT; RESEARCH; TECHNOLOGY; UNITED STATES; UNIVERSITY;

DIFFUSION OF INNOVATION; HISTORY, 20TH CENTURY; HUMANS; INDUSTRY; INTELLECTUAL PROPERTY; PATENTS AS TOPIC; RESEARCH; TECHNOLOGY TRANSFER; UNITED STATES; UNIVERSITIES;

EID: 65549166848     PISSN: 0015704X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper

References (280)

1. See infra Part I.A-B.
2. Howard W. Bremer, University Technology Transfer: Evolution and Revolution, in COUNCIL ON GOVERNMENTAL RELATIONS, 50TH ANNIVERSARY:1948-1998, at 13, 13-14 (1998), available at http://www.cogr.edu/docs/Anniversary.pdf.
3. COUNCIL ON GOVERNMENTAL RELATIONS, THE BAYH-DOLE ACT: A GUIDE TO THE LAW AND IMPLEMENTING REGULATIONS 1 (1999) [hereinafter COGR GUIDE], available at http://www.cogr.edu/docs/ Bayh-Dole.pdf. Vannevar Bush also emphasized the importance of university research to innovation in industry. Id.
4. Charles R. McManis & Sucheol Noh, The Impact of the Bayh-Dole Act on Genetic Research and Development: Evaluating the Arguments and Empirical Evidence to Date 17-18 (Aug. 13, 2006) (unpublished manuscript), available at http://www.law.berkeley.edu/institutes/bclt/ipsc/papers2/mcmanis.doc.
5. See infra Part II for a discussion of the Bayh-Dole Act.
6. See, e.g., Tanuja V. Garde, Supporting Innovation in Targeted Treatments: Licenses of Right to NIH-Funded Research Tools, 11 MICH. TELECOMM. & TECH. L. REV. 249, 254-55 (2005) (asserting that prior to passage of the Bayh-Dole Act, all patents on government-funded research belonged to the government). This may have been the default rule, but it does not take into account actions that universities could take to retain patent rights in government-funded research findings. For example, consider the actions associated with the Cohen-Boyer patents. See infra Part I.C.
7. See Rebecca Henderson, Adam B. Jaffe & Manuel Trajtenberg, Universities as a Source of Commercial Technology: A Detailed Analysis of University Patenting, 1965-1988, 80 REV. ECON. & STAT. 119, 121 (1998) (stating that before 1980, universities had to seek a title rights waiver from the funding agency in order to profit from a patent on federally funded research findings);
8. Ted Sabety, Nanotechnology Innovation and the Patent Thicket: Which IP Policies Promote Growth?, 15 ALB. L.J. SCI. & TECH. 477, 485-86 (2005);
9. Julia Porter Liebeskind, Risky Business: Universities and Intellectual Property, ACADEME ONLINE, Sept.-Oct. 2001, available at http://www.aaup.org/AAUP/pubsres/academe/2001/SO/Feat/Lieb.htm;
10. Robert E. Litan et al., Commercializing University Innovations: A Better Way 6 (Nat'l Bureau of Econ. Research, Working Paper JEL No. O18, M13, 033, 034, 038, 2007), available at http://www.kaufmian.org/pdf/NBER- 0407.pdf (quoting Senator Robert Dole's reference to the pre-1980 process of allowing a university to retain patent rights as being a "hideous example of over management by the bureaucracy").
11. See DAVID C. MOWERY, RICHARD R. NELSON, BHAVEN N. SAMPAT & ARVIDS A. ZIEDONIS, IVORY TOWER AND INDUSTRIAL INNOVATION: UNIVERSITY-INDUSTRY TECHNOLOGY TRANSFER BEFORE AND AFTER THE BAYH- DOLE ACT IN THE UNITED STATES 53 (2004). The birth of technology transfer may be traced to the 1879 discovery and subsequent patenting of saccharine by a scientist at Johns Hopkins University. William R. Brody, President, Johns Hopkins Univ., Remarks Inaugurating the Biomedical Engineering Lecture Series: From Minds to Minefields: Negotiating the Demilitarized Zone Between Industry and Academia (Apr. 6, 1999), available at http://web.jhu.edu/president/speeches/1999/biomlec.html.
12. See infra Part I.A-C. The Cohen-Boyer patents were applied for in 1974, but the first patent was not granted until 1980, shortly before the effective date of the Bayh-Dole Act. Kenneth Sutherlin Dueker, Biobusiness on Campus: Commercialization of University-Developed Biomedical Technologies, 52 FOOD & DRUG L.J. 453, 494 (1997).
13. Id. at 456.
14. Wisconsin Alumni Research Foundation, Steenbock and WARF's Founding, http://www.warf.org/about/index.jsp?cid=26&scid=33 (last visited Mar. 24, 2009).
15. Id.
16. Bhaven N. Sampat & Richard R. Nelson, The Emergence and Standardization of University Technology Transfer Offices: A Case Study of Institutional Change 8-9 (Sept. 16-18, 1999) (unpublished manuscript), available at http://www.isnie.org/ISNIE99/Papers/nelson.pdf.
17. MOWERY ET AL., supra note 8, at 43.
18. Carl E. Gulbrandsen, Managing Dir., Wis. Alumni Research Found., The Kastenmeier Lecture at the University of Wisconsin Law School: Bayh-Dole: Wisconsin Roots and Inspired Public Policy (Nov. 3, 2006), in 2007 Wis. L. REV. 1149, 1157 (explaining that the efforts eventually resulted in negotiation of an Institutional Patent Agreement (IPA) with the U.S. Department of Health, Education, and Welfare (DHEW)). Carl Gulbrandsen, however, implies that the Bayh-Dole Act gives more credibility to the Wisconsin Alumni Research Foundation's (WARF) claims of title to federally funded inventions. He goes so far as to suggest that the inventions currently owned by WARF would instead be owned by federal agencies in the absence of Bayh-Dole, even though the IPAs that WARF negotiated with federal agencies seem to have fulfilled that role on their own. Id. at 1158-59.
19. Dueker, supra note 9, at 456 (providing a table of information of significant biomedical inventions commercialized by WARF); Press Release, Wis. Alumni Research Found., WARF Receives National Medal of Technology (Mar. 17, 2005), available at http://www.warf.org/news/news.jsp?news-jd=178.
20. Dueker, supra note 9, at 457 (reporting WARF's revenues as of 1997).
21. Wisconsin Alumni Research Foundation, Technologies: Stem Cells, http://www.warf.org/technologies.jsp?techfield=Stem+Cells (last visited Mar. 24, 2009).
22. Mark A. Lemley, Are Universities Patent Trolls?, 18 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 611,617 (2008). On March 9, 2009, President Barack Obama signed an executive order that lifted the ban on federal funding for embryonic stem cell research. See Scott Wilson, Obama Reverses Bush Policy on Stem Cell Research: The Ban on Federal Funding Is Lifted, WASH. POST, Mar. 10, 2009, at A10.
23. MOWERY ET AL., supra note 8, at 59; Sampat & Nelson, supra note 13, at 11.
24. MOWERY ET AL., supra note 8, at 59.
25. Id. at 63.
26. Id. at 72.
27. Id. at 83.
28. Sampat & Nelson, supra note 13, at 19.
29. Interview by Sally Smith Hughes, Reg'l Oral History Office, The Bancroft Library, Univ. of Cal., Berkeley, with Niels Reimers, Dir., Office of Tech. Licensing, Stanford Univ., in Berkeley, Cal. (May 8, 1997), available at http://content.cdlib.org/xtf/view?docld=kt4b69n6sc&brand=calisphere&doc. view=entire-text.
30. Dueker, supra note 9, at 491.
31. Id. at 494; Interview with Niels Reimers, supra note 26. According to Niels Reimers's own account, Reimers persuaded Stanley Cohen (who specifically did not want to patent the discovery) to file a patent application, explaining that filing an application would ensure that Cohen's discovery would be commercialized most effectively and that the license process also could include requirements that the licensee follow safety guidelines. Id.
32. Id.
33. Dueker, supra note 9, at 495.
34. Id.; see also Mark A. Lemley, PatentingNanotechnology, 58 STAN. L. REV. 601, 611 (2005).
35. Maryann P. Feldman, Alessandra Colaianni & Connie Kang Liu, Lessons from the Commercialization of the Cohen-Boyer Patents: The Stanford University Licensing Program, in 2 INTELLECTUAL PROPERTY MANAGEMENT IN HEALTH AND AGRICULTURAL INNOVATION: A HANDBOOK OF BEST PRACTICES 1797, 1800 (Anatole Krattiger et al. eds., 2007), available at http://www.iphandbook.org/handbook/resources-and-tools/Publications/links/ ipHandbook%20Volume%202.pdf.
36. Id.
37. Walter W. Powell & Jason Owen-Smith, Universities and the Market for Intellectual Property in the Life Sciences, 17 J. POL'Y ANALYSIS & MGMT. 253, 264 (1998) (noting that the patents brought in $66.3 million in licensing revenue between 1980 and August of 1996).
38. Bayh-Dole Act of 1980, 35 U.S.C. §§ 200-212 (2006).
39. 447 U.S. 303, 317 (1980). Many scholars credit Diamond v. Chakrabarty with the growth of patenting in the biotechnology industry. See, e.g., Dueker, supra note 9, at 494; Garde, supra note 6, at 253; Peter Mikhail, Hopkins v. CellPro; An Illustration that Patenting and Exclusive Licensing of Fundamental Science Is Not Always in the Public Interest, 13 HARV. J.L. & TECH. 375, 376 (2000).
40. Many scholars note that the creation of the U.S. Court of Appeals for the Federal Circuit was a very important turning point in patent law for two reasons: first, the Federal Circuit was perceived as more likely to uphold a patent than other courts; second, the Federal Circuit provided a level of consistency and reliability in patent law that did not exist before, since patent decisions at the appellate level were made by different courts across the country. John M. Golden, Biotechnology, Technology Policy, and Patentability: Natural Products and Invention in the American System, 50 EMORY L.J. 101, 125-26 (2001);
41. see also Jonathan M. Barnett, Cultivating the Genetic Commons: Imperfect Patent Protection and the Network Model of Innovation, 37 SAN DIEGO L. REV. 987, 997 (2000).
42. See generally Dueker, supra note 9, at 465; Arti K. Rai & Rebecca S. Eisenberg, Bayh-Dole Reform and the Progress of Biomedicine, LAW & CONTEMP. PROBS., Winter/Spring 2003, at 289,290.
43. U.S. GEN. ACCOUNTING OFFICE, TECHNOLOGY TRANSFER: ADMINISTRATION OF THE BAYH-DOLE ACT BY RESEARCH UNIVERSITIES: REPORT TO CONGRESSIONAL COMMITTEES 3 (1998) [hereinafter GAO, TECH TRANSFER], available at http://eric.ed.gov/ERICDocs/data/ ericdocs2sql/content- storage-01/0000019b/80/15/9a/9c.pdf. DHEW, for example, had a policy of negotiating IP As with universities, while the U.S. Department of Defense (DoD) allowed universities to retain title if the universities followed "approved" patent policies. MOWERY ET AL., supra note 8, at 45.
44. MOWERY ET AL., supra note 8, at 113-26;
45. see also Gary Pulsinelli, Share and Share Alike: Increasing Access to Government-Funded Inventions Under the Bayh-Dole Act, 7 MINN. J. L. SCI. & TECH. 393, 398-99 (2006) (noting the two alternatives that funding agencies might have adopted before Bayh-Dole: a license policy where title resides with the inventor and the government keeps a license to use the technology; or a title policy where the government retains full title and thus owns all of the resulting patents).
46. See, e.g., MOWERY ET AL., supra note 8, at 1;
47. Dueker, supra note 9, at 465;
48. F. Scott Kieff, Facilitating Scientific Research: Intellectual Property Rights and the Norms of Science-A Response to Rai and Eisenberg, 95 NW. U. L. REV. 691, 695 (2001) (noting that, before 1980, it was much harder to obtain and defend a patent, which could explain why more universities did not seek patents on inventions); Lemley, supra note 31, at 617; Mikhail, supra note 36, at 375.
49. COGR GUIDE, supra note 3, at 2. Contra McManis & Noh, supra note 4, at 12 (noting that the data used in support of the Act was flawed); infra note 45.
50. 35 U.S.C. § 200 (2006); WENDY H. SCHACHT, CONG. RESEARCH SERV., THE BAYH-DOLE ACT: SELECTED ISSUES IN PATENT POLICY AND THE COMMERCIALIZATION OF TECHNOLOGY 4-5 (2006), available at http://www.ncseonline.org/ NLE/CRSreports/07Jan/RL32076.pdf;
51. Barnett, supra note 37, at 995;
52. Garde, supra note 6, at 255;
53. Lemley, supra note 31, at 617; Innovation's Golden Goose, ECONOMIST TECH. Q., Dec. 14, 2002, at 3, 3 (referring to the Bayh-Dole Act as "[p]ossibly the most inspired piece of legislation to be enacted in America over the past half-century" and noting that the Act caused universities to become "hotbeds of innovation" overnight).
54. But see MOWERY ET AL., supra note 8, at 91 (acknowledging the primary argument that few of the government-owned patents were licensed, but pointing out that such justification was based on incomplete information, since the government-owned patents surveyed were patents held by the DoD).
55. See Margo A. Bagley, Academic Discourse and Proprietary Rights: Putting Patents in Their Proper Place, 47 B.C. L. REV. 217, 232 (2006);
56. Pulsinelli, supra note 39, at 394; Arti Kaur Rai, Regulating Scientific Research: Intellectual Property Rights and the Norms of Science, 94 NW. U. L. REV. 77, 97 (1999). This is also the argument set forth by Richard Levin of Yale University, who asserts that the Bayh-Dole Act's purpose was to assist in the commercialization of government-funded inventions '"for the benefit of humanity.'" SCHACHT, supra note 42, at 9 (quoting Richard Levin). From the industry perspective, many feared in the 1980s that U.S. industry was lagging behind other industrialized nations. See, e.g., Powell & Owen-Smith, supra note 34, at 256.
57. See Lorelei Ritchie de Larena, The Price of Progress: Are Universities Adding to the Cost?, 43 Hous. L. REV. 1373, 1375 (2007) (asserting that the Bayh-Dole Act came about to standardize "the rules regarding ownership of patents on inventions created using federal research funds" (citing 35 U.S.C. § 200 (2000));
58. Rebecca S. Eisenberg, Public Research and Private Development: Patents and Technology Transfer in Government-Sponsored Research, 82 VA. L. REV. 1663, 1663 (1996);
59. Litan et al., supra note 7, at 6; see also SCHACHT, supra note 42, at 2-3 (stating that the Bayh-Dole Act was intended to create a uniform national policy that would reduce bureaucracy and encourage commercialization of inventions);
60. Dueker, supra note 9, at 462 (referring to the Bayh-Dole Act as "the first-ever federal uniform patent policy" and noting that the act replaced twenty-two separate statutory provisions); Pulsinelli, supra note 39, at 398-99 (not stating that standardization was the primary purpose, but acknowledging how differently the funding agencies operated and discussing whether various agencies practiced a title policy or a license policy).
61. MOWERY ET AL., supra note 8, at 91 (noting that the data indicating that the government-owned patents were underlicensed was based on DoD patents, which was misleading because the DoD followed a patent policy that manifested a bias toward the inventor retaining the patent rights to the invention); Eisenberg, supra note 44, at 1702.
62. See Rochelle Dreyfuss, Protecting the Public Domain of Science: Has the Time for an Experimental Use Defense Arrived?, 46 ARIZ. L. REV. 457, 464 (2004) (noting that the Act "was enacted to promote technology transfer through licensing, and not specifically to enrich universities" (citing Eisenberg, supra note 44)).
63. Bagley, supra note 43, at 231;
64. Michael S. Mireles, Jr., States as Innovation System Laboratories: California, Patents, and Stem Cell Technology, 28 CARDOZO L. REV. 1133, 1149 (2006) (referencing increases in economic activities that occurred after the passage of the Act, but without drawing a conclusion about causation); University of Pittsburgh Office of Technology Management, Inventors Handbook, X. Appendices, http://www.otm.pitt.edu/ sc.php?page-title=X. +APPENDICES (last visited Mar. 24, 2009) (noting that universities reported being issued fewer than 250 patents per year prior to 1980, but that in 1993, universities responding to the Association of University Technology Managers (AUTM) survey received an average of 1600 patents). But see MOWERY ET AL., supra note 8, at 36 (noting that, while the Bayh-Dole Act accelerated the growth of patenting by universities, the acceleration was still in line with a then-existing trend toward increased patenting by universities).
65. See generally MOWERY ET AL., supra note 8.
66. Henderson et al., supra note 7, at 121-22.
67. Id. at 121.
68. McManis & Noh, supra note 4, at 14-16. It is worth noting, however, that domestic patenting increased across the board during the 1980s, which at least one empirical study has attributed to a general surge in innovation during that time period. See Samuel Kortum & Josh Lerner, What Is Behind the Recent Surge in Patenting?, 28 RES. POL'Y 1,21 (1999).
69. de Larena, supra note 44, at 1387.
70. Mireles, supra note 47, at 1136-37;
71. see also SCHACHT, supra note 42, at 24-23 (citing critics expressing concerns about the patenting of research tools);
72. Janet Rae-Dupree, When Academia Puts Profit Ahead of Wonder, N.Y. TIMES, Sept. 7, 2008, at BU4 (expressing concern that the Bayh-Dole Act has "distorted the fundamental mission of universities" as universities begin to act more like corporate research laboratories); Liebeskind, supra note 7. Janet Rae-Dupree's interpretation of this dispute in the New York Times, however, promptly was criticized on the Patently-0 Blog. Patently-0 Blog, http://www.patentlyo.com/patent/2008/09/ nytimes-univers.html (Sept. 8, 2008, 2:18 PM).
73. See, e.g., Ted Agres, The Costs of Commercializing Academic Research: Does University Licensing Impede Life Science Research and Development?, SCIENTIST, Aug. 25, 2003, at 58 (quoting Paul Berg, Director Emeritus, Beckman Center for Molecular and Genetic Medicine, Stanford University).
74. MOWERY ET AL., supra note 8, at 101, 106, 111 (providing tables showing post-1980 increases in patenting by the University of California, Stanford University, and Columbia University); Litan et al., supra note 7, at 7 (referring to the development and increased importance of university TTOs as unintended consequences of the Bayh-Dole Act); Sampat & Nelson, supra note 13, at 22 (noting that there were 25 university technology transfer offices (TTOs) in 1980 and over 200 in 1999).
75. Henderson et al., supra note 7, at 124.
76. Bhaven N. Sampat et al., Changes in University Patent Quality After the Bayh-Dole Act: A Re-examination, 21 INT'L J. INDUS. ORG. 1371, 1379 (2003). One potential explanation for the apparent initial decline in importance of university patents is that, on the whole, university patents were being cited later than control group patents. Thus, the original Rebecca Henderson et al. study did not encompass the full breadth of citations to university patents. Id. at 1373-74. Bhaven Sampat and his colleagues further point out that a longer delay before a patent is cited does not necessarily mean that the patent has less importance and could actually indicate that the patent has more importance. Id. at 1388.
77. Sampat & Nelson, supra note 13, at 22 (noting that the AUTM had 150 members in 1984, compared with 1500 in 1999); cf. COGR GUIDE, supra note 3, at 3 (specifying that the AUTM was comprised of 2178 members in 1999). The Association of University Technology Managers (AUTM) was founded in 1974 for the purpose of addressing the concern that government-funded university inventions were not being adequately commercialized. Association of University Technology Managers, About AUTM, http://www.autm.net/AM/Template.cftn?Section=About (last visited Mar. 24, 2009).
78. Timothy R. Anderson, Tugrul U. Daim & Francois F. Lavoie, Measuring the Efficiency of University Technology Transfer, 27 TECHNOVATION 306, 316 (2007). Timothy Anderson and his colleagues completed an empirical study concerning the efficiency of TTOs and provided suggestions about different areas to look into for further research on the topic, including the organizational structure of the TTO, the possible effect of the region in which the TTO is located, and the difference in efficiency between TTOs in the United States and TTOs in other countries. Id.
79. Joshua B. Powers, Commercializing Academic Research: Resource Effects on Performance of University Technology Transfer, 74 J. HIGHER EDUC. 26, 37-39 (2003).
80. See, e.g., Megan Ristau Baca, iBrief, Barriers to Innovation: Intellectual Property Transaction Costs in Scientific Collaboration, 2006 DUKE L. & TECH. REV. 4;
81. see also Lemley, supra note 19, at 618 (noting that university TTOs that are more focused on revenue generation in the short run will tend to grant exclusive licenses);
82. Litan et al., supra note 7, at 3-4 (stating that university TTOs have focused on revenue generation instead of on the commercialization of university inventions). Robert Litan and his colleagues even go as far as to refer to the current dominant TTO model as the "revenue maximization model." Id. at 7;
83. cf. Gilles Capart & Jon Sandelin, Models of and Missions for Transfer Offices from Public Research Organizations (2004) (unpublished manuscript), available at http://www-leland.stanford.edu/group/OTL/about/ documents/JSMissionsModelsPaper-1.pdf (providing eight possible points to consider when forming a mission statement for a TTO, but specifically advising against making revenue generation a top priority). But see Dueker, supra note 9, at 470 (stating that the primary goal of TTOs is commercialization and designating revenue generation as a secondary concern); Powell & Owen-Smith, supra note 34, at 258 (listing the prospect of large financial returns as constituting "the most compelling factor to universities" when universities consider how to manage research findings).
84. Richard Jensen & Marie Thursby, Proofs and Prototypes for Sale: The Licensing of University Inventions, 91 AM. ECON. REV. 240, 243-45 (2001). The study looks at the priorities that TTO managers place on various possible outcomes of TTO activities. The other outcomes that the study requested that the managers consider were commercialization of inventions; licenses executed; sponsored research; and patents. Id. at 244. Revenue from licensing received the most rankings of "extremely important" or "moderately important" in surveys where the TTO managers were asked to evaluate the importance of these outcomes to TTOs and university administration. Id.
85. Id. at 245.
86. Bagley, supra note 43, at 234; Rae-Dupree, supra note 53 (noting that data indicate that "fewer than half of the 300 research universities actively seeking patents have managed to break even from technology transfer efforts," with two-thirds of all licensing revenue tracked by the AUTM being spread between thirteen research universities (citing JENNIFER WASHBURN, UNIVERSITY INC.: THE CORPORATE CORRUPTION OF HIGHER EDUCATION (2005)).
87. See de Larena, supra note 44, at 1381-82 (referring to the "lottery" effect, whereby university TTOs file a large number of patent applications because of the small chance that one might result in huge returns);
88. see also MOWERY ET AL., supra note 8, at 83-84 (referring to the Research Corporation's attempts to maximize income by searching for blockbuster patents as one reason for its failure); Litan et al., supra note 7, at 8 (stating that TTOs place more emphasis on commercializing inventions that have the potential to result in the biggest, fastest payback and less emphasis on inventions that have significant potential in the long run). But see Jerry G. Thursby & Marie C. Thursby, Who Is Selling the Ivory Tower? Sources of Growth in University Licensing, 48 MGMT. SCI. 90, 93 (2002) (referencing a study that showed that many TTOs apply for patents only when they believe a licensee could be found relatively easily); McManis & Noh, supra note 4, at 25 (discussing studies revealing that only a minority of university inventions are patented, typically only after careful market analysis to ensure that a licensee would be found); Cornell Center for Technology Enterprise and Commercialization, Technology Transfer Process, http://www.cctec.cornell.edu/inventors/techtransferprocess.php (last visited Mar. 24, 2009) (providing a disclaimer for researchers that not all inventions would be considered appropriate for patenting). One university TTO that does not engage in such extensive patenting is the Technology Transfer Department (TTD) at the University of California at Berkeley, which cites the high cost of filing patent applications (between $10,000 and $20,000) as a reason for the TTD's inability to seek patents on all inventions submitted to the office. Lawrence Berkeley National Laboratory, Technology Transfer: For Berkeley Lab Researchers: How the Tech Transfer Licensing Process Works, http://www.lbl.gov/Tech-Transfer/researchers/how-tt- works.html (last visited Mar. 24, 2009).
89. See MOWERY ET AL., supra note 8, at 83-84 (noting how difficult it is to predict which patent will be the next blockbuster, and thus that a patent licensing portfolio should not be managed with the sole goal of maximizing income); cf. Goldie Blumenstyk, A Contrarian Approach to Technology Transfer, CHRON. HIGHER EDUC, Mar. 12, 2004, at A27 (noting that tech transfer professional Gerald Barnett suggested that TTOs use university technologies to build relationships with industry instead of looking for patents that will bring in a large amount of revenue); Andy Guess, Easing Friction Over Tech Transfer, INSIDE HIGHER ED, July 18, 2007, http://www.insidehighered.com/news/2007/07/18/patent.
90. OFFICE OF TECH. TRANSFER, NAT'L INSTS. OF HEALTH, U.S. DEP'T OF HEALTH & HUMAN SERVS., NIH RESPONSE TO THE CONFERENCE REPORT REQUEST FOR A PLAN TO ENSURE TAXPAYERS' INTERESTS ARE PROTECTED (2001), available at http://www.ott.nih.gov/policy/policy-protect-text. html.
91. Id.
92. Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCIENCE 698, 698 (1998) (addressing the concern that an excess of rights in a resource could lead to underuse). The idea of the anticommons can be compared to multiple toll booths along the same road. When too many people hold exclusionary rights in property (here, a patent), the anticommons theory holds that research and innovation are impeded or outright halted because permission cannot be obtained from all of the holders of exclusionary rights. See de Larena, supra note 44, at 1376, 1424-25 (stating that patents are sometimes appropriate, but that universities have been overpatenting irresponsibly and should "patent less and license more").
93. See Heller & Eisenberg, supra note 69, at 699;
94. see also Carl Shapiro, Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting 8 (Univ. of Cal., Berkeley Competition Policy Ctr., Working Paper No. CPC00-11, 2000), available at http://repositories.cdlib.org/iber/cpc/CPC00-011 (discussing patent thickets and the blocking effect that patents can have on downstream research, such as in the biotechnology industry under the theory proposed by Michael Heller and Rebecca Eisenberg).
95. Brody, supra note 8. William Brody further suggests that it may actually be a bad idea for universities to patent at all. Id.
96. See Heller & Eisenberg, supra note 69, at 698; see also Agres, supra note 54, at 59 (referencing a study that revealed a substantial percentage of researchers who reported being deterred from researching genetic tests by fear of patent infringement).
97. See Heather Hamme Ramirez, Comment, Defending the Privatization of Research Tools: An Examination of the "Tragedy of the Anticommons" in Biotechnology Research and Development, 53 EMORY L.J. 359, 371 (2004) (defending the privatization of upstream biotechnology developments by asserting that patents on such developments encourage innovation rather than hinder it).
98. John P. Walsh et al., Effects of Research Tool Patents and Licensing on Biomedical Innovation, in PATENTS IN THE KNOWLEDGE- BASED ECONOMY 285, 293-96 (Wesley M. Cohen & Stephen A. Merrill eds., 2003)
99. Id. at 298. The study, however, was primarily concerned with whether research tool patents had the potential to cause the termination of studies that were in progress. The paper does, however, acknowledge the possibility that high licensing costs could prevent utilization of patented research tools by small start-up firms and university labs. Id. at 301-02.
100. Fiona Murray & Scott Stern, Do Formal Intellectual Property Rights Hinder the Free Flow of Scientific Knowledge? An Empirical Test of the Anti-commons Hypothesis, 63 J. ECON. BEHAV. & ORG. 648 (2007).
101. Id. at 673. The authors interpret this finding as evidence that patents have a negative impact on the diffusion of scientific information. Id. at 683. The study examined patent-paper pairs for scientific articles published in the journal Nature Biotechnology. Id. at 651.
102. Kira R. Fabrizio, University Patenting and the Pace of Industrial Innovation, 16 INDUS. & CORP. CHANGE 505, 506 (2007).
103. Id. at 524.
104. See Dreyfuss, supra note 46, at 468;
105. see also Madey v. Duke Univ., 307 F.3d 1351, 1360-62 (Fed. Cir. 2002) (holding that universities are in the business of research and education and thus are not eligible for an experimental use defense based on use of a patented invention in university research).
106. See Wendy Thai, Note, Toward Facilitating Access to Patented Research Tools, 6 MINN. J. L. SCI. & TECH. 373, 375-76 (2004) (noting the tendency within industry against suing universities for patent infringement). Compare Dreyfuss, supra note 46, at 468 (warning that universities could face substantial costs if patent owners started suing universities for patent infringement), and Ruth E. Freeburg, Comment, No Safe Harbor and No Experimental Use: Is It Time for Compulsory Licensing of Biotech Tools?, 53 BUFF. L. REV. 351, 393 (2005) (asserting that Madey eliminated the experimental use exemption for research tools, that it is possible to have very broad patents on upstream technology, and that the lack of a broad infringement exemption combined with the potential for broad patents has the capacity to seriously stifle innovation in biotechnology), with Elizabeth A. Rowe, The Experimental Use Exception to Patent Infringement: Do Universities Deserve Special Treatment?, 57 HASTINGS L.J. 921, 954 (2006) (arguing against special treatment for universities by providing an experimental use exemption to begin with and noting the unlikelihood that the Madey decision would result in any change to university lab behaviors or any increase in infringement actions brought against universities), and Richard J. Bauer, Comment, Why Not Try the Experiment and Stop Pointing the Finger? Modern University Research Unaffected by a Narrow Experimental Use Exception, 24 TEMP. J. SCI. TECH. & ENVTL. L. 121, 135 (2005). See generally JOHN R. THOMAS, CONG. RESEARCH SERV., SCIENTIFIC RESEARCH AND THE EXPERIMENTAL USE PRIVILEGE IN PATENT LAW 9-13 (2004), available at http://fas.org/sgp/crs/RL32651.pdf (reviewing the arguments in favor of and against an experimental use exemption for universities).
107. See Dreyfuss, supra note 46, at 468; Lemley, supra note 31, at 628; cf Golden, supra note 37, at 108-10.
108. Garde, supra note 6, at 278 (differentiating between incentives to innovate (commercialize) and incentives to invent);
109. Kieff, supra note 40, at 698 (discussing patents as incentives for commercialization);
110. Lemley, supra note 19, at 620-21;
111. McManis & Noh, supra note 4, at 9. Other scholars have put forth the idea that patents may serve as incentives to invent, incentives to disclose, and incentives to design around earlier inventions, in addition to serving as incentives to commercialize. Richard Li-Dar Wang, Biomedical Upstream Patenting and Scientific Research: The Case for Compulsory Licenses Bearing Reach-Through Royalties, 10 YALE J.L. & TECH. 251, 265 (2008). However, these alternatives have largely been dismissed in the context of the patenting by universities. Golden, supranote 37, at 165-66.
112. See de Larena, supra note 44, at 1385 (noting that patents act as signals to show that a university is "industry-friendly"); Clarisa Long, Patent Signals 69 U. CHI. L. REV. 625, 627-28 (2002) (exploring the various things that a patent portfolio can signal to others); see alsoGolden, supranote 37, at 166-67. John Golden dismisses the incentive to invent theory in favor of viewing patents as a means of attracting investment capital by exhibiting the firm's money-making ability to potential investors. He refers to this as the "resources for innovation" theory, which he says was also the driving theory behind passage of the Bayh-Dole Act. Id.However, this theory essentially just encompasses the notion of using a patent as a signal of the value of investing in the small firm. Id.at 167. But seePulsinelli, supranote 39, at 393.
113. MOWERY ET AL., supra note 8, at 179.
114. See Katherine J. Strandburg, Curiosity-Driven Research and University Technology Transfer, in 16 ADVANCES IN THE STUDY OF ENTREPRENEURSHIP, INNOVATION AND ECONOMIC GROWTH: UNIVERSITY ENTREPRENEURSHIP AND TECHNOLOGY TRANSFER: PROCESS, DESIGN, AND INTELLECTUAL PROPERTY 93, 109 (Gary D. Libecap ed., 2005). The fact that WARF and the Research Corporation were each founded for a similar purpose gives credence to this theory. See supraPart I.A-B.
115. See Golden, supra note 37, at 110, 181 (suggesting stricter enforcement of the patentability standards of novelty, nonobviousness, and utility, with heightened enforcement of the utility requirement having "the greatest immediate potential for imposing sensible restrictions on prima facie patentability");
116. Lemley, supra note 31, at 628 (also encouraging strengthening the utility requirement).
117. Golden, supra note 37, at 181.
118. Id. at 129.
119. Teresa M. Summers, Note, The Scope of Utility in the Twenty-First Century: New Guidance for Gene-Related Patents, 91 GEO. L.J. 475, 493 (2003).
120. See de Larena, supra note 44, at 1377 (stating that wider usage of the march-in provision and grant-back rights could help allay criticisms of university patenting);
121. Lemley, supra note 31, at 628; Pulsinelli, supra note 39, at 434 (noting that the NIH has never exercised its march-in rights);
122. Sabety, supra note 7, at 510; see also de Larena, supra note 44, at 1394-95 (suggesting use of the grant-back rights of the Bayh-Dole Act to give universities the authority to practice inventions on
123. 35 U.S.C. § 202(c)(4) (2006).
124. Id.; MOWERY ET AL.,supra note 8, at 93;
125. de Larena, supra note 44, at 1395.
126. de Larena, supra note 44, at 1395.
127. 35 U.S.C. § 202(f)(2);
128. see also de Larena, supra note 44, at 1392.
129. de Larena, supra note 44, at 1392;
130. see also Michael S. Mireles, The Bayh-Dole Act and Incentives for the Commercialization of Government-Funded Invention in Developing Countries, 76 UMKCL. REV. 525,530 (2007).
131. GAO, TECH TRANSFER, supra note 38, at 5. The General Accounting Office (GAO) provides 1995 data showing that the NIH accounted for approximately 98% of the $6.5 billion in federal funds allocated to universities by the Department of Health and Human Services (DHHS). The contributions from DHHS accounted for the most substantial share of federal funding to universities in 1995, with the National Science Foundation (NSF) and DoD contributing approximately $1.7 billion and $1.6 billion, respectively. Id.
132. see also NAT'L SCI. FOUND., FEDERAL SCIENCE AND ENGINEERING SUPPORT TO UNIVERSITIES, COLLEGES, AND NONPROFIT INSTITUTIONS: FY 2005 (2007), available at http://www.nsf.gov/ statistics/nsfD7333/pdf/nsfO7333.pdf.
133. For example, in 1997, CellPro asked the NIH to exercise its march-in rights under Bayh-Dole, but the request was denied because there was no clear benefit. Garde, supra note 6, at 256. More recently, the NIH received letters from members of the public requesting that the NIH exercise its march-in rights to control the pricing of the drug Ritonavir. The NIH denied this request in 2004, concluding that such an action was an "'extraordinary remedy"' that was not appropriate to address a pricing issue. Id. at 257 (quoting OFFICE OF THE DIR., NAT'L INSTS. OF HEALTH, IN THE CASE OF NORVIR° MANUFACTURED BY ABBOTT LABORATORIES, INC. (2004)[hereinafter NORVIR REPORT], available at http://www.ott.nih.gov/policy/March-in-norvir.pdf);
134. see also NORVIR REPORT, supra (providing the official NIH response concerning the request).
135. All tables and figures referenced in Parts III.B.l to III.B.3 appear in the Appendix.
136. See Appendix for additional details.
137. Powell & Owen-Smith, supra note 34, at 257, 258 (quoting Daryl Chubin, NSF Division Director).
138. See Bagley, supra note 43, at 221 (blaming patents for increased secrecy among academics);
139. Rebecca S. Eisenberg, Academic Freedom and Academic Values in Sponsored Research, 66 TEX. L. REV. 1363, 1375-77 (1988) (noting the potential for compromise of academic values as a result of sponsored research);
140. Sheldon Krimsky, Book Review, ACADEME ONLINE, Sept.-Oct. 2005, available at http://www.aaup.org/AAUP/pubsres/ academe/2005/SO/BR/krim.htm (reviewing WASHBURN, supra note 64).
141. Eyal Press & Jennifer Washbum, The Kept University, ATLANTIC MONTHLY, Mar. 2000, at 39, 39-40.
142. Id. at 40.
143. Id. at 40-41.
144. Andrew Lawler, Last of the Big-Time Spenders?, 299 SCIENCE 330, 331 (2003).
145. David Blumenthal et al., Relationships Between Academic Institutions and Industry in the Life Sciences An Industry Survey, 334 NEW ENG. J. MED. 368, 371 (1996).
146. Id.
147. Id.
148. Id. at 373.
149. Dreyfuss, supra note 46, at 464 (addressing the potential impact of Madey, which effectively denied the common law research exemption to university researchers). Contra McManis & Noh, supra note 4, at 40-42 & n.188 (asserting that the Madey decision did not change the experimental use exemption, but rather that it merely affirmed that universities were not excused from the prohibition from "experimenting with" a patented research tool).
150. See Dueker, supra note 9, at 470.
151. See Garde, supra note 6, at 262;
152. see also Eliot Marshall, Patent on HIV Receptor Provokes an Outcry, 287 SCIENCE 1375, 1377 (2000) (noting that the chief executive of a company that owns a patent on an HIV receptor gene has explicitly stated that the company will not use the patent to block academic professionals from using the gene for research purposes).
153. See Dueker, supra note 9, at 468-69.
154. See Dreyfuss, supra note 46, at 464 (stating that, after the increased focus on patents made universities look more like commercial actors, the Madey court treated universities like commercial actors and took away the common-law experimental use defense);
155. Golden, supra note 37, at 180; Risa L. Lieberwitz, The Corporatization of the University: Distance Learning at the Cost of Academic Freedom?, 12 B.U. PUB. INT. L.J. 73, 100, 102 (2002) (suggesting that the Bayh-Dole Act encourages unacceptable corporatization of universities, and that the shift toward corporate goals alters the purpose of the research); Press & Washburn, supra note 103, at 42 (providing an example of a researcher at Brown University, David Kern, who lost his position at the university because he published his findings concerning a new lung disease contracted by employees at the nylon company where Kern worked as a consultant). Mildred Cho, a senior research scholar at Stanford, suggests that it is rare to find researchers who come forward with research results in spite of pressure from employers. Id. See generally SCHACHT, supra note 42, at 19-22 (noting that some critics have expressed concern about conflicts of interest, publication delays, and skewed research agendas as a result of close industry ties);
156. Powell & Owen-Smith, supra note 34, at 268 (noting concerns that commercial activities could potentially "compromise scientific impartiality by introducing the profit motive into research"); Strandburg, supra note 86. But see MOWERY ET AL., supra note 8, at 14-15 (implicitly denying any increasing commercialization of universities based on further interaction with industry and pointing out that American universities were always closely connected with industry, even to the extent of coming up with entirely new fields of study to address problems faced by industry actors (such as electrical engineering, first offered by MIT in 1882));
157. Thursby & Thursby, supra note 65, at 102 (stating that an increase in the filing of patent applications should be attributed more to the increasingly industry-friendly behavior of university administrators than to a shift in the focus of researchers).
158. MOWERY ET AL., supra note 8, at 13, 15.
159. See Bagley, supra note 43, at 250-51 (asserting that the pressures of patenting can lead to increased secrecy and harm the sense of community within academia);
160. Lieberwitz, supra note 115, at 128, 134 (maintaining that the corporatization of the university undermines academic freedom);
161. see also KEVIN G. RTVETTE & DAVID KLINE, REMBRANDTS IN THE ATTIC: UNLOCKING THE HIDDEN VALUE OF PATENTS 12 (2000) (noting the "potential conflict of interest between academic freedom and the desire to profit from the research fruits of that freedom").
162. But see Dueker, supra note 9, at 470 (asserting that working closely with industry can benefit academia).
163. See supra Part IV.A.
164. See de Larena, supra note 44, at 1383.
165. Kira R. Fabrizio & Alberto Di Minin, Commercializing the Laboratory: Faculty Patenting and the Open Science Environment, 37 RES. POL'Y 914, 926 (2008).
166. Marie Thursby, Jerry Thursby & Swasti Gupta-Mukherjee, Are There Real Effects of Licensing on Academic Research? A Life Cycle View, 63 J. ECON. BEHAV. & ORG. 577, 595-96 (2007). The results imply that basic and applied research receive relatively equal treatment throughout the faculty member's career, with more research being done in the early stages of her career. If anything is the subject of a trade-off that places more emphasis on applied research, it appears to be leisure time. Id. at 596.
167. Fabrizio, supra note 78, at 522.
168. Jeremiah S. Helm, Comment, Why Pharmaceutical Firms Support Patent Trolls: The Disparate Impact of eBay v. MercExchange on Innovation, 13 MICH. TELECOMM. & TECH. L. REV. 331, 335 (2006) (differentiating universities from "patent trolls" because universities are active innovators).
169. The term patent troll derives from the behavior of some entities in surprising researchers or marketers with a patent and demanding that the infringer purchase a license. See Lemley, supra note 19, at 613 n.2. Some individuals in various industries view universities as patent trolls in this regard, especially when universities attempt to patent everything regardless of what it is. One critic goes so far as to call universities "'crack addicts'" that are dependent on licensing revenue. See id. at 615, 622-24 (quoting Chuck Fish, Comments at the Fordham Annual Conference on International Intellectual Property Law and Policy (Apr. 22, 2006)).
170. See supra note 61; Part III.B (noting the views of several scholars concerning TTOs and revenue generation).
171. Litan et al.,supra note 7, at 13-15. The Litan study points out four potential value-maximizing models: free agency (allow the inventors to shop around for a different TTO); regional alliances; Internet-based approaches (for example, using a website like iBridge Network, http://www.ibridgenetwork.com (last visited Mar. 24, 2009)); and allowing faculty to retain title to their inventions and hoping that successful faculty occasionally donate to the university. Id. The authors appear to suggest that the latter would be the best model for TTOs to follow. Id.
172. See id. at 11 (stating that using a single, central office would not optimize commercialization);
173. see also Kristen Osenga, Rembrandts in the Research Lab: Why Universities Should Take a Lesson from Big Business to Increase Innovation, 59 ME. L. REV. 407, 419-20 (2007). TTOs on campuses could be structured using a decentralized model, where different academic disciplines would be handled by their own technology transfer teams, or by using a centralized model, where one technology transfer team would handle all of the tech transfer across the entire university. As Kristin Osenga indicates in her article, universities might also elect to have their TTO tasks handled by outside entities. Id. Most scholars who discuss these models do not use the terms "centralized" and "decentralized," but several express concern with the concept of the centralized model. But see Rochelle Cooper DreyfUss, Collaborative Research: Conflicts on Authorship, Ownership, and Accountability, 53 VAND. L. REV. 1161, 1229 (2000) (noting that university TTOs can act as middlemen to help collaboration efforts between different university areas, indicating a potential strength of the centralized TTO).
174. See de Larena, supra note 44, at 1412;
175. Osenga, supra note 127, at 433-34.
176. See, e.g., Dueker, supra note 9;
177. Golden, supra note 37;
178. Christopher M. Holman, Biotechnology's Prescription for Patent Reform, 5 J. MARSHALL REV. INTELL. PROP. L. 318 (2006);
179. Pulsinelli, supra note 39;
180. see also COGR GUIDE, supra note 3, at 8 (describing the social importance of Bayh-Dole by citing an AUTM survey that found that 70% of the active licenses of respondent universities were in the life sciences). But see Lemley, supra note 31; Sabety, supra note 7.
181. See Powell & Owen-Smith, supra note 34, at 259-60 (noting that, from 1989-1994, the three most common classes of inventions for which universities pursued patents were in the life sciences field).
182. See CONGRESSIONAL BUDGET OFFICE, RESEARCH AND DEVELOPMENT IN THE PHARMACEUTICAL INDUSTRY 19-20 (2006), available at http://www.cbo.gov/ftpdocs/ 76xx/doc7615/10-02-DrugR-D.pdf.
183. See de Larena, supra note 44, at 1432-33 (noting that Pharmaceuticals tend to be big winners in technology transfer, and also that they are the biggest investment risks).
184. Id.
185. Id.
186. Ajay Agrawal & Rebecca Henderson, Putting Patents in Context: Exploring Knowledge Transfer from MIT, 48 MGMT. SCI. 44, 59 (2002). The two departments were the Department of Mechanical Engineering and the Department of Electrical Engineering and Computer Science. Id. at 45.
187. See SCHACHT, supra note 42, at 1-4; Sampat & Nelson, supra note 13, at 32. Wendy Schacht notes that the importance of patents varies across different industries, and that an industry's view of the importance of patents depends on the monetary and time costs associated with duplicating the fruits of labor in the industry. Patents, she continues, are valued more highly by industries with low duplication costs. SCHACHT, supra note 42, at 3-4.
188. MOWERY ET AL., supra note 8, at 190-91 (instructing TTOs to adjust their IP policies to accommodate differences among various areas instead of treating research in all areas just like biomedical research).
189. Id. at 69 (looking at the history of the Research Corporation and concluding that expertise in the patenting/licensing process of one area did not translate to comparable strength in other areas);
190. see also Lemley, supra note 19, at 611-12 (urging that the goal of TTOs should be maximizing the social impact' of technology instead of profiting from licensing, and, thus, patenting should be conducted based on however the most positive effect will be realized);
191. Sabety, supra note 7, at 513-14 (noting that wide exclusive patenting works well in the pharmaceutical area, but not as well when the patent is just one of many patents comprising a cumulative technology required for the finished product).
192. See MOWERY ET AL., supra note 8, at 69.
193. GAO, TECH TRANSFER, supra note 38, at 19 (noting in 1998 that visits to ten major universities revealed that the more "marketable" technologies tended to be in the life sciences and that a 1996 AUTM survey revealed that 80.2% of the technology licensing revenues of survey respondents came from inventions in the life sciences).
194. Lemley, supra note 19, at 617-18 (suggesting that "enabling technologies" be licensed nonexclusively to allow room for improvement);
195. Pulsinelli, supra note 39, at 412 (warning that exclusive licenses on patents of basic discoveries or tools can interfere with scientific progress); Sabety, supra note 7, at 508-09 (encouraging nonexclusive licenses for foundational intellectual property in the nanotechnology area).
196. But see MOWERY ET AL., supra note 8, at 8 (discouraging the patenting of research tools);
197. Golden, supra note 37, at 177 (noting that there is evidence indicating that patents on research materials impede downstream development);
198. Rai, supra note 43, at 112, 136-44 (noting that MIT has a presumption against patenting upstream products and providing a balancing test for whether patenting would be desirable: if (transaction costs) + (creativity costs) < (invention costs) + (pure development costs), then patent protection is probably desirable);
199. McManis & Noh, supra note 4, at 46-47 (citing a recent article that characterized biotechnology science research results as an '"uncongested common resource'" (quoting David A. Adelman, A Fallacy of the Commons in Biotech Patent Policy, 20 BERKELEY TECH. L.J. 985, 986 (2005));
200. Brody, supra note 8 (stating that nonexclusive licenses with reasonable fees to cover the cost of research would be a fair and equitable proposal, but that such a scheme might provide "greater benefit to large companies rather than small ones"). See generally Xavier Becerra, Talking Points, The Genomic Research and Accessibility Act (H.R. 977) (n.d.), available at http://becerra.house.gov/NR/rdonlyres/556A7E45-4762-42EC- 807C-7248F70E8787/0/TalkingPoints.pdf (last visited Mar. 19, 2009) (listing harmful effects on downstream research caused by patenting of genes); Dreyfuss, supra note 46, at 464 (referring to TTOs as "the academic equivalent of [universities'] football teams" and explaining that profit margins give TTOs incentives to seek patent protection for all university inventions, including upstream developments).
201. See RIVETTE & KLINE, supra note 117, at 22-25 (stating that granting patent rights to knowledge assets does not stifle innovation and is in fact a very effective way of "promoting innovation, knowledge sharing, and economic growth");
202. Holman, supra note 129, at 330 (noting that material transfer agreements are more likely to impede research than patents on upstream developments);
203. see also McManis & Noh, supra note 4, at 24 (citing studies showing that few researchers had experienced delays caused by patents, but that a considerable portion of researchers had experienced delays due to material transfer agreements).
204. McManis & Noh, supra note 4, at 31-32.
205. Id.
206. See, e.g., Dueker, supra note 9, at 497. But see Ass'N UNIV. TECH. MANAGERS, AUTM U.S. LICENSING ACTIVITY SURVEY: FY 2006, at 32 (2007) [hereinafter AUTM SURVEY], available at http://www.autm.net/AM/Template. cfm?Section=FY-2006-Licensing -Activiry-Survey&Template=/CM/ContentDisplay. cfrn&ContentID=1804 (showing that, as of fiscal year 2006, 61% of the licenses executed by U.S. universities were nonexclusive licenses).
207. See MOWERY ET AL., supra note 8, at 190. Another reason why TTOs should consider alternatives to patenting stems from sociological considerations, since at least one empirical study notes that universities with higher prestige have licensed more of their research findings than less prestigious universities. Wesley David Sine, Scott Shane & Dante Di Gregorio, The Halo Effect and Technology Licensing: The Influence of Institutional Prestige on the Licensing of University Inventions, 49 MGMT. SCI. 478, 494-95 (2003). Wesley David Sine and his colleagues conclude that technology transfer is facilitated by the prestige of the university, and not merely by the quality of the technology being developed. Id. at 495.
208. Albert N. Link, Donald S. Siegel & Barry Bozeman, An Empirical Analysis of the Propensity of Academics to Engage in Informal University Technology Transfer, 16 INDUS. & CORP. CHANGE 641,642 (2007).
209. Richard A. Jensen, Jerry G. Thursby & Marie C. Thursby, Disclosure and Licensing of University Inventions: 'The Best We Can Do with the S**t We Get to Work With; 21 INT'L J. INDUS. ORG. 1271, 1272 (2003);
210. see also Stuart D. Allen, Albert N. Link, & Dan T. Rosenbaum, Entrepreneurship and Human Capital: Evidence of Patenting Activity from the Academic Sector, 31 ENTREPRENEURSHIP THEORY & PRAC. 937, 943-48 (2007) (examining the results of an empirical study that found that tenured, older, white, or Asian male faculty members were more likely to seek patents, but not necessarily through the university TTO). The inclination of faculty members toward more entrepreneurial activities may be related to the extent to which a university department emphasizes entrepreneurial activities. Martin Kenney & W. Richard Goe, The Role of Social Embeddedness in Professorial Entrepreneurship: A Comparison of Electrical Engineering and Computer Science at UC Berkeley and Stanford, 33 RES. POL'Y 691, 704 (2004).
211. Link et al., supra note 147, at 647.
212. See generally id.
213. Id. at 651.
214. Id. at 652-53.
215. Donald S. Siegel, David Waldman & Albert Link, Assessing the Impact of Organizational Practices on the Relative Productivity of University Technology Transfer Offices: An Exploratory Study, 32 RES. POL'Y 27,44-45 (2003).
216. See MOWERY ET AL., supra note 8, at 33;
217. de Larena, supra note 44, at 1413-14 (noting that "the inventor is typically the best link to potential licensees," so TTOs should focus on forming relationships and not just promoting licenses);
218. Powell & Owen-Smith, supra note 34, at 258 (noting that patents may not be the best way of handling intellectual property in cutting edge fields and suggesting research parks and the acceptance of equity in start-up companies as better alternatives);
219. Strandburg, supra note 86, at 114-16;
220. Litan et al., supra note 7, at 8-9;
221. Capart & Sandelin, supra note 61 (urging TTOs to focus on a variety of methods of technology transfer apart from patenting, "including business development, coaching, incubator facilities, seed capital funds, science parks, etc.");
222. see also RIVETTE & KLINE, supra note 117, at 36 (quoting Henry Garrana, Vice President of Legal and Intellectual Property for Dell, as saying that a successful IP program requires that the holder "focus on the things that you do that bring real value to the market").
223. See Litan et al., supra note 7, at 9-10 (describing university "spin-offs" as small firms that emerge as a result of attempts to commercialize an early stage of university invention). Litan and his colleagues acknowledge that only 3376 of these spin-off companies were created between 1980 and 2000, but that these spin-offs are disproportionately high-performing companies 68% of the spin-offs created during that period were still operational in 2001, and 8% of spin-off companies eventually went public. Eight percent is a much higher percentage than that for U.S. enterprises generally. Id.
224. See GAO, TECH TRANSFER, supra note 38, at 13 (expressing concerns, however, that relationships with start-up companies might interfere with the university's mission by creating conflicts of interest by shifting the focus to making money instead of research);
225. de Larena, supra note 44, at 1416.
226. See generally Maryann Feldman et al., Equity and the Technology Transfer Strategies of American Research Universities, 48 MGMT. SCI. 105 (2002) (using empirical methods to examine the increasing acceptance of equity in lieu of licensing fees by university TTOs).
227. Gulbrandsen, supra note 15, at 1154 (also noting that in many situations, start-up companies may be the only way to commercialize an invention).
228. AUTM SURVEY, supra note 145, at 31.
229. Dante Di Gregorio & Scott Shane, Why Do Some Universities Generate More Start-Ups than Others?, 32 RES. POL'Y 209, 222 (2003). One other factor found to correlate positively with the creation of start-up firms was the university's level of academic prestige. Id. However, university TTOs potentially have more of an ability to control the two policy factors cited above inventors receiving less royalties and universities' acceptance of equity.
230. Andrew Pollack, Three Universities Join Researcher to Develop Drugs, N. Y. TIMES, July 31, 2003, at Cl (providing information on the formation of PharmaSTART through the collaboration of Stanford University, the University of California at San Diego, the University of California at San Francisco, and SRI International, a nonprofit research institute).
231. Id.; PharmaSTART, http://www.pharmastart.org/ (last visited Mar. 24, 2009). PharmaSTART's website now lists the University of California, Berkeley and the Institute for Quantitative Biomedical Research among its participating institutions, in addition to SRI International, Stanford University, University of California, San Diego, and University of California, San Francisco.
232. Almut von Biedermann, U.S. Excellence in New Venture Creation: What Technology Transfer Means in the Early 21 st Century 3-4 (2004) (unpublished manuscript), available at http://www.publicforuminstitute.org/nde/ sources/New%20Venture%20Creation %20-%2021Century%20Tech%20Transfer-A.vB1204. pdf. In a hands-off model, the licensing professionals view the formation of the start-up as just another licensing deal. In a hands-on model, the licensing professionals would help form the business plan for the startup and possibly also help secure funding. A licensing office following an "in-up-to the-elbows" approach would play a more entrepreneurial role, writing the business plan, recruiting management, and securing funding for the start-up from an early stage. The latter model is the model used at Yale University, and it has been very successful at that institution. Id.
233. Di Gregorio & Shane, supra note 159, at 213.
234. Siegel et al., supra note 153, at 42-43.
235. Jensen et al., supra note 148, at 1273-74.
236. Christine A. Gulbranson & David B. Audretsch, Proof of Concept Centers: Accelerating the Commercialization of University Innovation 4 (Jan. 2008) (unpublished manuscript), available at http://papers.ssrn.com/sol3/ papers.cfm?abstract-id= 1090575.
237. Id.; see also Litan et al., supra note 7, at 9-10 (noting that universities may need to play a larger role in nurturing early-stage start-ups due to venture capitalists' preference toward funding technology that is closer to commercialization).
238. See Maryann Feldman & Pierre Desrochers, Research Universities and Local Economic Development: Lessons from the History of the Johns Hopkins University, 10 INDUSTRY & INNOVATION 5 (2003) (noting that medical research at Johns Hopkins University was predominantly privately funded until the government became more active in university research following World War II).
239. See Bagley, supra note 43, at 218 (referring to the communal norms that promote the importance of publishing in order to promote the open sharing of scientific data); see also Eisenberg, supra note 102, at 1364 (listing the freedom to publish as being one of the core freedoms in the idea of "academic freedom"). Publishing, however, can have a negative impact on future attempts at patenting if the publication occurs long enough before the patent application such that it qualifies as prior art. See In re Klopfenstein, 380 F.3d 1345, 1352 (Fed. Cir. 2004) (finding that slides accompanying a poster presentation at a conference amounted to a "printed publication" of the research findings for purpose of prior art); see also de Larena, supra note 44, at 1401 (noting that faculty members are sometimes pressured to file provisional patent applications prior to publication of research results).
240. See MOWERY ET AL., supra note 8, at 176-78 (reviewing an analysis of case studies that indicated that patenting is not necessary to obtain value from research tools and is not likely to help with electronics);
241. Lemley, supra note 19, at 612 (noting additional possible limits on exclusivity, such as field-specific exclusivity, exclusivity for a limited term, and exclusivity that only applies to commercial sales);
242. see also id. at 627 (suggesting that exclusive patents would not be appropriate in nanotechnology due to the many industries where the same nanotechnology products may be used);
243. Powell & Owen-Smith, supra note 34, at 260 (listing three motivations underlying university licensing of research results: a desire to increase research in an area with limited commercial value, where broad licensing is desirable; a focus on entrepreneurial motivations that would lead to exclusive licenses being granted to a start-up company; and use of the discoveries as magnets to draw more industry-sponsored research).
244. But see Dueker, supra note 9, at 497 (concluding that "nonexclusive licenses are viable only when inventions are revolutionary or broadly-enabling"); Strandburg, supra note 86, at 112-13 (suggesting that exclusive patent rights play a positive role in the commercialization of the results of curiosity-driven research).
245. See Mireles, supra note 96, at 536 (suggesting that universities should choose to grant exclusive licenses only when an exclusive license is "necessary to secure funding for commercialization").
246. But see Dueker, supra note 9, at 497 (referring to nonexclusive licenses as the exception, viable only with inventions that are pioneering or broadly enabling).
247. See Mireles, supra note 96, at 536.
248. Aaron Miller, Repairing the Bayh-Dole Act: A Proposal for Restoring Non-Profit Access to University Science, 2005 B.C. INTELL. PROP. & TECH. F. 093001, http://www.bc.edu/bc-org/avp/law/ st-org/iptf/articles/index.html.
249. CONGRESSIONAL BUDGET OFFICE, supra note 131, at 19-21; U.S. Food & Drug Admin., New Drug Development Timeline (n.d.), available at http://www.fda.gov/fdac/graphics/newdrugspecial/ drugchart.pdf; Simone A. Rose, On Purple Pills, Stem Cells, and Other Market Failures: A Case for a Limited Compulsory Licensing Scheme for Patent Property, 48 How. L.J. 579, 601 (2005) (estimating that it costs between $100 and $500 million to develop and market a single drug);
250. Robert F. Service, Surviving the Blockbuster Syndrome, 303 SCIENCE 1796 (2004) (noting that clinical research alone during the development of a new biopharmaceutical product now takes approximately seventy-five months); PhRMA, Innovation, http://www.phrma.org/innovation/ (last visited Mar. 24, 2009) (explaining that obtaining approval for a new drug takes an average of fifteen years of research and development and costs more than $800 million).
251. David C. Mowery et al., The Growth of Patenting and Licensing by U.S. Universities: An Assessment of the Effects of the Bayh-Dole Act of 1980, 30 RES. POL'Y 100, 115 (2001). Most of the licenses executed by the universities in this study were exclusive licenses, but the highest licensing revenue came from the Cohen-Boyer patents (licensed nonexclusively by Stanford and University of California) and Richard Axel's cotransformation patent (licensed nonexclusively by Columbia University). MOWERY ET AL., supra note 8, at 155-58; Mowery et al., supra, at 115.
252. See Lemley, supra note 31, at 623-24.
253. See Lemley, supra note 19, at 612 (listing the options of field-specific exclusivity, exclusivity for limited terms, or exclusivity that is limited to commercial sales); see also Amy Kapczynski et al., Addressing Global Health Inequities: An Open Licensing Approach for University Innovations, 20 BERKELEY TECH. L.J. 1031, 1075-76 (2005) (providing examples of universities that have made specific licensing choices in the interest of increasing the availability of treatments for neglected diseases in low- to middle-income countries).
254. See OFFICE OF TECH. TRANSFER, UNIV. OF CAL. OFFICE OF THE PRESIDENT, UC TECHNOLOGY TRANSFER ANNUAL REPORT 2007, at 10, 12 (2007), available at http://www.ucop.edu/ott/genresources/ documents/OTTRptFY07.pdf (listing the different components of royalties and licensing fees at the University of California, which reported $97.6 million in revenue from license fees and royalties in fiscal year 2007);
255. Liebeskind, supra note 7. See generally Stanford University Office of Technology Licensing, Exclusive Agreement 4 (n.d.) (unpublished sample agreement), available at http://otl.stanford.edu/ industry/resources/exclusive.pdf (providing the format of the contract segments pertaining to royalties); Wisconsin Alumni Research Foundation, Standard Non-exclusive License Agreement 2-3 (n.d.) (unpublished sample agreement), available at http://www.warf.org/ uploads/media/20031002132027680-Std- non-exclusive-license-agrmt.pdf (providing the format of the contract segments pertaining to consideration, including license fees and royalties).
256. See Dreyfuss, supra note 46, at 470 (urging the creation of an invigorated experimental use defense similar to fair use in copyright law in order to protect university researchers from patent infringement suits). But see Lorelei Ritchie de Larena, What Copyright Teaches Patent Law About "Fair Use" and Why Universities Are Ignoring the Lesson, 84 OR. L. REV. 779, 814 (2005) (suggesting that reasonable royalties may be better for a fair use equivalent in patent law instead of royalty-free licenses);
257. Garde, supra note 6, at 271-72 (suggesting "licenses of right" for patented research tools instead of royalty-free licenses);
258. Jensen & Thursby, supra note 62, at 249-50 (presenting a theorem that royalties increase the effort expended by inventors and thus implying that a royalty-free scenario would result in less effort by an inventor than if the inventor were receiving royalties).
259. See GAO, TECH TRANSFER, supra note 38; de Larena, supra note 44, at 1416 (noting that some university TTOs may accept equity in lieu of cash for licensing);
260. Capart & Sandelin, supra note 61 (describing Stanford's policy of handling industry-sponsored research results by first offering the sponsor a nonexclusive royalty-free license, with royalties being required if exclusivity is desired).
261. HERBERT HOVENKAMP ET AL., IP AND ANTITRUST: AN ANALYSIS OF ANTITRUST PRINCIPLES APPLIED TO INTELLECTUAL PROPERTY LAW § 6.5(c) (2003);
262. Barnett, supra note 37, at 1034 (noting that the FTC has recently applied a remedy of compulsory licensing as an approval condition for some biopharmaceutical mergers);
263. Joseph A. Yosick, Compulsory Patent Licensing for Efficient Use of Inventions, 2001 U. III. L. REV. 1275, 1277;
264. see also Shamnad Basheer, Block Me Not: How "Essential" Are Patented Genes?, 2005 U. ILL. J.L. TECH. & POL'Y 55, 76 (examining (inconclusively) the possibility of invoking the essential facilities doctrine as a means of preventing abuse of a dominant position by a patent holder).
265. Lawrence Schlam, Compulsory Royalty Free Licensing as an Antitrust Remedy for Patent Fraud: Law, Policy and the Patent-Antitrust Interface Revisited, 1 CORNELL J.L. & PUB. POL'Y 467, 470 (1998) (suggesting that compulsory, royalty-free licensing would be an appropriate remedy where patentees misused patent rights in restraint of trade).
266. See generally Hartford-Empire Co. v. United States, 323 U.S. 386, 415 (1945) (amending the district court's order of royalty-free licenses as a remedy to a grant of compulsory licenses with reasonable royalties).
267. Dreyfuss, supra note 46, at 470; see also Pulsinelli, supra note 39, at 459 (suggesting a compulsory, royalty-free license to universities for patented inventions produced using government funds);
268. Rose, supra note 174, at 617-18 (suggesting a royalty-free, fair use-like statute that would be limited to use in scenarios involving a national emergency or a health crisis, with some circumstances where royalty-based fair use would be appropriate as well).
269. Garde, supra note 6, at 276 (suggesting that compulsory royalty-free licenses are not consistent with the goals of patent law).
270. See de Larena, supra note 179, at 814 (suggesting that a fair use equivalent in patent law would likely work best if it included payment of royalties);
271. Garde, supra note 6, at 279-81 (proposing that universities should have a "license of right" to use inventions developed using NIH funds to ensure continued access to patented research tools);
272. Thai, supra note 81, at 391 (advocating allowing universities compulsory licenses with reach-through royalties for research tools, where reach-through royalties could be adapted to a university setting by basing the royalties on licensing revenue);
273. see also Pulsinelli, supra note 39, at 451-53 (suggesting that firms could bundle necessary reagents together into a kit and then sell those kits with the royalty fees included in the price of the kit, allowing patentees "to recover costs from researchers without needing to sue or license them individually").
274. See, e.g., The University of Iowa Research Foundation, FAQ, http://research.uiowa.edu/uirf/pages/universal/faq.html#faq-3 (last visited Mar. 24, 2009) (noting that when a technology is licensed from a patent held by the University of Iowa, the licensing agreement may include "an initial licensing fee, reimbursement of patenting costs, developmental and time-based milestone payments, and royalties based on sales of products related to the licensed technology").
275. Mark A. Lemley & Carl Shapiro, Patent Holdup and Royalty Stacking, 85 TEX. L. REV. 1991, 2044 (2007) (stating the importance of ensuring that patent royalties and orders granting reasonable royalties focus on compensation of patent holders).
276. See de Larena, supra note 44, at 1416.
277. See Feldman et ai, supra note 156, at 106.
278. See Michael S. Mireles, An Examination of Patents, Licensing, Research Tools, and the Tragedy of the Anticommons in Biotechnology Innovation, 38 U. MICH. J.L REFORM 141, 230-31 (2004) (suggesting the creation of patent pools in the biotechnology sector); Pulsinelli, supra note 39, at 459 (suggesting that universities should have access to all government-funded inventions in a scenario that Gary Pulsinelli says would resemble a patent pool).
279. Industry representatives who subscribe to the Engineering Portfolio of Inventions for Commercialization (EPIC) program and who wish to license any of the technologies included in the portfolio can obtain a nonexclusive license for a technology by paying a onetime fee. Stanford University Office of Technology Licensing, EPIC Summary, http://stanfordtech.stanford.edu/4DCGI/epicsummary (last visited Mar. 24, 2009); see also J. Strother Moore, Model Language for Patent and Licensing Agreements for Industrially Sponsored University Research in Information Technology 5 (June 25, 2003) (unpublished manuscript), available at http://www.fs.utexas.edu/users/moore/publications/ip-memo-3. pdf (providing general information concerning the EPIC program and other computer science and engineering specific concerns about licensing of intellectual property).
280. See, e.g., Mark A. Lemley, Intellectual Property Rights and Standard-Setting Organizations, 90 CAL. L. REV. 1889, 1949 (2002) ("Traditional IP licenses grant the right to use the IP in exchange for a royalty payment. But in many industries IP owners regularly cross-license huge stacks of patents on a royalty free basis."