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Jessica Chesher

Managing Editor

Innovation eReview
Featured Debate: Faculty Inventor Free Agency

Universities are increasingly expected to make economic development contributions by  commercializing their research. This is evident in the emphasis on entrepreneurship in research labs, technology transfer offices (“TTOs”), and business, law and IT schools. Most research universities have an incubator or accelerator to grow or spin out technologies or business ideas. The ability of TTOs to fulfill commercialization expectations and advise among the range of options for a variety of new technologies is increasingly complex. For example, TTOs must be prepared to advise on whether patenting is indicated, best options for building or obtaining a prototype, licensing terms , incorporation options, contacts for seasoned entrepreneurs, in-depth market research, identification of potential licensees, and legal and regulatory advice. And, all this is generally without charge to the faculty-inventor.

Would faculty-inventors benefit from an option to shop for an entity to handle the commercialization of their inventions? Would the ability to bypass their TTO be cost and time effective and add value to the university invention being commercialized? Would competition among TTOs foster better marketing, licensing and spinout options for university inventions? Would more options for inventing faculty facilitate commercialization or slow it down? 

Advocates for free agency say yes. Free agency has been promoted as a mechanism to provide a faster path from the university lab to a market by the Kauffman Foundation. In a piece titled: A Faster Path from Lab to Market in the 2010 Harvard Business Review article: The HBR List: Breakthrough Ideas for 2010, Kauffman Foundation vice-presidents Robert E. Litan, (now a director at Bloomberg Government) and Lesa Mitchell, argue TTOs are underperforming and inventor-professors would be well served by being able to choose their own licensing agent. The idea was profiled as a breakthrough idea, and has generated a good deal of discussion ever since. 

Free agency proponents argue that TTOs act as a bottleneck for commercialization, and are unable to act in the best interest of certain inventions. This deficit is attributed to lack of time, expertise and contacts in the area, or resources. Free agency proponents argue that the ability of an inventor to shop for a TTO to manage his or her invention would not change the university’s ownership interest in the patent (which would remain with the university and professor as dictated by the university’s intellectual property policy), and the university and inventor would continue to have a percentage of the profit, but the inventor would have the option of making an arrangement with a developer they believe would be best able to commercialize the research results. 

The free agency notion is opposed by Senator Birch Bayh , co-sponsor of the Bayh Dole Act of 1980, as well as AUTM (the Association for University Technology Managers) which states the reasons for its opposition on its web site. AUTM defines free agency as “a concept which would allow university faculty to shop discoveries to any third party for licensing – regardless of where the research was conducted”. AUTM's position statement outlines four misconceptions that they believe lead to the promotion of free agency. Those are: 1) the belief that more research would be commercialized under free agency, 2) the belief that innovations that are commercialized by the university TTO do not reach the marketplace quickly enough, 3) that most technology licensing offices on campuses are ineffective and a bottleneck for the process and 4) that faculty inventors are more capable of making the right decisions regarding commercialization than trained professionals in TTOs. 

AUTM suggests in its position statement that free agency would add a new layer of bureaucracy to the technology transfer process, which would slow the process and increase the risk that technologies developed in a State would leave the State. It would also cost more. 

The current mechanism for commercializing university research comes from the Bayh-Dole Act, which grants universities ownership of patents even though they stem from federally funded research. This policy was enacted to bring the benefits of federally funded research to the public as quickly as possible. A change granting faculty inventors the ability to bypass the process would most likely require an amendment to the Bayh-Dole Act. Proposals have included a Startup America Act that would provide for this change. The White House website fact sheet about Startup America characterizes the proposed change as: Commercialization: Clearing the path to market for primary research in more universities, through a combination of regional ecosystem development, faculty engagement, and streamlined technology licensing.” It appears the initial proposal would simply look for demonstration projects to test the proposal rather than a radical remaking of the system. 

What is your view on the free agency proposal?

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