“Open transfer” agreements: mediating industry and universities

Please note that this post is from 2011. Evaluate with care and in light of later events.

Madey v. Duke exposed one conflict when industry and universities work in overlapping areas. The 2002 federal court decision highlighted a problem at the intersection of university and industry goals. In that case, Duke University claimed its use of patented technology for research purposes was protected by the so-called “experimental use exception” (for more, see Open Source, Open Access, and Open Transfer: Market Approaches to Research Bottlenecks). The idea was that university research and education was not focused on commercial ends, and should thus be protected by this common-law exception allowing free use of patented inventions for “experimental” purposes. The Federal Circuit denied the defense, saying that the “business” of the university was education and research, and that was commercial enough to fall outside of the exception.

Even after Madey, many researchers continue to ignore patent protections, and continue their work as if they didn’t need to license technology. The result has been increasing claims by license-holders, and a growing sense by researchers that this is complicating their scientific pursuits and introducing extra costs and restrictions.

Universities, now large licensors themselves of new technology thanks to Bayh-Dole and technology transfer offices, have turned to, in the language of Professor Robin Feldman, “open transfer” agreements to lossen up these restrictions. Such agreements are added to agreements when universities license their technologies for industry to develop, and permit both the licensing university and any other nonprofit they allow to use the technology for education and research. This approach co-opts the mechanisms of the market, rather like open-source licensing does, to permit the continued free sharing and publishing in the academic community.

What do these clauses look like? In the case of the University of California, San Diego, Article 2.2 of the sample agreement for licensing captures this “open transfer” provision:

2.2 Reservation of Rights. UNIVERSITY reserves the right to:
(a) use the Invention, and Patent Rights for educational and research purposes;
(b) publish or otherwise disseminate any information about the Invention at any time; and
(c) allow other nonprofit institutions to use and publish or otherwise disseminate any information about Invention and Patent Rights for educational and research purposes.

Part (a) and (b) are relatively standard in all licensing agreements, commercial or not. Most industry licenses also permit the licensor to use their own technology. Part (c) is the interesting part, as it permits other nonprofit institutions to also use and even publish on the technology, provided it is for educational and research purposes. In other words, what the Federal Circuit has taken out of common law, university tech transfer offices have recreated through their own market-focused and neoliberal license agreements.

This approach suggests that, despite efforts to commercialize the “ivory tower,” there remain creative resistance that seeks to maintain the traditional values and benefits of an academic research environment.