A renewed effort is under way to allow college professors working for the state to profit from and maintain control of their inventions and research, a move intended to foster greater economic development and entrepreneurial spirit in Rhode Island.
A bill introduced earlier this month in the General Assembly would help change a Rhode Island law that says no scientist or inventor at a state college or university can have an equity interest in an invention. The bill was submitted in behalf of the Board of Governors for Higher Education and was introduced simultaneously in both houses of the legislature. A similar bill was introduced last year in the General Assembly but died in committee.
Christopher “Kip” Bergstrom, executive director of the Rhode Island Economic Policy Council, attributed the lack of action on the bill last year to distractions from other issues, rather than any opposition to the proposal.
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
Gov. Don Carcieri has publicly supported the proposed change.
The bill’s purpose is to make the state “recognize that research is a primary mission of an institution of higher education,” the bill states. Marketing of such inventions, the bill asserts, will contribute to job creation and to overall economic well being in the state.
Jack Warner, commissioner of the Board of Governors for Higher Education, said a large number of states across the nation have revised their laws on commercialization and intellectual property.
Warner’s group supports adding Rhode Island to the list of states revising their existing policies.
“We are strongly in favor of this because if this goes through it will be a stronger link between higher education and economic development in the state,” he said. “We need to encourage faculty and provide incentives for faculty to commercialize research.”
Most of the efforts are being put forth because of criticism directed at the University of Rhode Island, because of its positions on licensing of intellectual property (IP) and technology transfer.
Chuck Turtle, director of industry research and technology transfer at the University of Rhode Island, said the university is all for increasing business in the Ocean State, but the university must follow the law.
“We are committed to enhancing economic development in the region, certainly within the state,” Turtle said. “But there is state law now which prohibits use of one’s public office for gain.”
As it stands today, professors and scientists are instructed or obligated by state law to disclose an intellectual property to the university.
Once an inventor, in most cases a professor, develops IP that can be commercialized or licensed they then are obligated to disclose it to URI’s Intellectual Property Committee.
The committee then has custody of it, and the title then is given to the Board of Governors for Higher Education. If the committee decides to pursue commercialization, the title goes to the university’s foundation.
The Economic Policy Council supports a change in the law that would allow URI’s faculty to benefit from such innovation by taking part ownership in the invention and building a company around it.
If the state does not make the change in the law, and the university doesn’t become more active by adopting national standards in this area, URI will lose its credibility, says Bergstrom.
“Every institution in the country both public and private that does a lot of commercialization of research has rules that encourage their faculty to be part of their invention,” Bergstrom added. “If URI doesn’t move to that — it won’t attract the best faculty and won’t attract the best students.”
Bergstrom suggested that the university look at other models throughout the nation including California Institute of Technology, Stanford University and the University of Wisconsin’s model.
William Jackson, president of the Brown Foundation, the entity that works with scientists and faculty at Brown University to bring their inventions to commercialization and to help license the technology, agrees with Bergstrom.
“I would say every university in the United States has some sort of mechanism for handling this,” he said.
URI’s Turtle said the university has looked at other models including the Massachusetts Institute of Technology’s model, which does not allow a professor to manage the company or to be a line officer in the company. They can have ownership in the company and can be scientific advisers.
Some point to Brown as a good model.
Jackson has been working with Brown inventors by supporting them through the licensing and commercialization of such research and IP.
Some of the companies that have spun out of Brown inventions and research include venture-backed Spherics Inc., Epivax Inc. and Cell Based Delivery.
EpiVax Inc. is a Providence-based business that designs vaccines for tuberculosis and HIV. The startup, founded by Brown University Assistant Professor of Medicine Anne De Groot has licensed its core technology from Brown University.
William Martin, chief information officer at EpiVax, said the process of moving out of the lab was pretty smooth.
“The practice of actually generating and having a license signed was straight forward and the university was fair. What has been difficult for us has been the other technology which has been patented (by Brown),” said Martin.
The Brown Foundation owns the patents, he said.
This causes a problem if there is a patent dispute, Martin said.
“The trouble with that is our licenses include a provision that says we should pay for legal defense,” he added. “They’ll fight the battle and then they’ll hand us the bill.”
Unfortunately the company has not been able to present Brown with an alternative solution and is negotiating its relationship with Brown.
Bergstrom said the state needs to establish a policy that addresses the issue of conflict of interest.
“When you hire someone as a state employee, you are buying all of their time and not part of their time,” he said. “They are not supposed to be doing any other job.”
One pitfall of the current situation of IP licensing and tech transfer is that a school can license the IP to an out-of-state company and the professor would receive a royalty.
URI’s model is based on a third, a third and a third.
“When royalties begin to flow in, expenses of patenting and marketing are taken off the top and the remainder is split in three ways,” Turtle said. “One-third goes to the inventor, the second one-third goes to the college (i.e. the College of Engineering) and how it is used is at the discretion of the dean, and one-third goes to the university” as a whole.
Ten percent of the last one-third goes to the foundation and the 90 percent remaining is then divided. Nearly 25 percent goes to research and 75 goes into and endowment.
The problem for the professor, however, is that he or she cannot participate as an employee of a venture in Rhode Island while a faculty member. The good news, according to Bergstrom, is there hasn’t been any public opposition on changing the law. Except for Phil West, executive director of the Common Cause, a political watchdog group that takes position on behalf of public interest on anything from finance to human resources. West’s concern, according to Warner, is that the state’s ethics commission should have veto power over any rules that the Board of Governors introduces.
For the complete current issue, visit our subscription Web site, or call (401) 273-2201, ext. 227 or 234.
