Monetizing Intellectual Property at Universities – Part 1

Historically, universities have been expected to conduct research, publish their results, and make their data and findings accessible to the public. However, with universities at the intersection of the increase in collaborations between industries and academics, it has become essential for them to formulate policies that clearly define the ownership and use rights of creators of intellectual property. This is paramount when the stakeholders in IP have transitioned from universities and faculty/students, to include visiting researchers, industry partners, non-profits, the government, and outside consultants engaged by the university.

For decades, universities owned patents for inventions by their students, researchers and faculty. However, government regulations did not allow universities to retain royalties earned through commercialization, or own stock in business entities created to commercialize the product. While these regulations did not inhibit innovation or registrations of patents, it did create roadblocks in the effective use of the exclusive rights granted under a patent.

One of the common problems universities face is the lack of awareness among students and researchers, about whether they are creating IP and what kind of IP it is. Universities require students and researchers to sign an agreement by which all IP created while at the university (enrolled and using university resources) is owned by the university. This gives the university the right to determine how to register the IP (patents, trademarks, copyright), or whether to register at all (maintain the IP as a trade secret). Further, it also allowed the university to decide how to monetize the IP, by giving it the power to license the patent or copyright to its industry partners or to an entity willing to purchase the license rights. Although Universities held similar agreements with professors, the decision in Stanford v. Roche has caused such agreements to be slightly altered.

In Roche, the US Supreme Court affirmed that the title in a patented invention has vested in the inventor since 1970, even if the inventor is a researcher at a federally funded lab subject to the 1980 Bayh–Dole Act. This has caused university contracts to obtain automatic (and sometimes royalty-free) assignments to the university, instead of claiming direct and full ownership over the IP. However, this has still failed to resolve the issue of IP ownership in cases of industry collaborations and startups formed without initial assignments for all IP.

At present, agreements recognize the student/professor as the inventor/author of the IP, but create an automatic assignment in favor of the university, effectively granting it many of the same rights it held earlier. With regard to IP developed at universities, there are two major challenges:

  • Awareness among students and researchers, particularly visiting researchers or foreign students who are at the university for a short period; and
  • The role of the university in properly acknowledging and compensating developers of the IP, and ensuring its effective use.

Copyrights

While patents constitute the overwhelming majority of directly monetizable intellectual property created in universities, the largest volume of IP created at universities is copyrightable material. This includes course materials, class presentations, research papers, working papers, books and individual chapters and case studies. For decades, the use of such material was limited to publications in research journals in specialised fields.

However, universities are now turning their attention to publishing in-house, through their own university press, and to expanding the reach of their research to industry conferences and through publishing condensed versions of research papers in the common media.

There still remain issues over the ownership of the copyright – the creator is clearly acknowledged as the author or the original work. But the professor who designed a course and its material or authored a case study, or a student who wrote a research paper, is still uncertain about whether the right to update their work and publish it elsewhere rests with them (as individuals) or with the university.

The advent of online courses, forming an ever-increasing portion of revenue for the top universities, either directly or through platforms (like Coursera, Udacity etc), is only exacerbating these ownership tussles. Massive Open Online Courses (MOOCs) have habituated students to accessing the most academically advanced content anywhere in the world, and to the content keeping pace with the latest breakthrough in technology. Today, individual courses and nanodegrees, in fields like machine learning and self-driving cars, have to not only keep pace with industry expectations, but also anticipate potential problems and envision the next wave of viable solutions.

For these courses to live up to their potential and demand, universities have to ensure that professors can freely update content for their own courses, and also that the universities themselves retain the power to offer and alter content in the event that the original creator moves out of that university.

Trademarks, trade names and branding

To most students, the name under which a company does business, the names of its products, its logos and colors, and the slogans used in marketing campaigns all form part of its brand value. While each of these can be registered as trademarks and protected against infringement, it is important to distinguish the commercial motivation behind each, apart from strengthening the overall value of a brand.

This results in multiple branding questions, including when to incorporate and in what form, when and how to trademark the trade name of the company, and when to begin a conscious effort of brand-building. Incorporating early with the intended trade name is essential to ensure that all IP is owned by the company and not individual members, and that subsequent entities do have to be created to actually register for the trademark.

University-backed startups have the irreplaceable goodwill of a university when they begin operating, but need to develop their own brand before they enter the market. One effective way to do this is for universities to devote some of their resources to building brands for startups on campus, and incur the initial costs of incorporating and filing to trademark the company and product names. Second, universities can also encourage startups in their incubators to trademark these names and begin publicizing the brand at student events and career fairs. This will create visibility for the products, and create an association in consumers’ minds between the trade name and the products. The resulting popularity among the target consumer base will lead to higher valuations for the brand.

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Ashwini Arun graduated with an LLM (Master of Laws) from  University of California Berkeley, School of Law in 2017 with a focus on technology and business laws. She holds a Bachelor of Policy Science and Law (BPSc LLB) from National Law University Jodhpur (India) with a specialization in trade and investment law. She has a keen interest in the development of legal tech and policy frameworks for emerging technology. She enjoys hiking, tennis, martial arts, and writing.  

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Ashwini Arun graduated with an LLM (Master of Laws) from University of California Berkeley, School of Law in 2017 with a focus on technology and business laws. She holds a Bachelor of Policy Science and Law (BPSc LLB) from National Law University Jodhpur (India) with a specialization in trade and investment law. She has a keen interest in the development of legal tech and policy frameworks for emerging technology. She enjoys hiking, tennis, martial arts, and writing.