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Universities Patenting More Student Ideas
theodp writes "Working as a NASA intern, grad student Erez Lieberman had a eureka moment, resulting in an algorithm that detects whether a person is standing correctly or is off balance. Unfortunately, MIT liked it so much they decided to patent it. Seeking permission to use his own idea for his iShoe startup, which develops products like insoles to address the problems of seniors, Lieberman was told no problem — as long as he promised a hefty royalty and forked over a $75,000 upfront payment. Whether or not students are aware of it, the NYTimes reports that most universities own inventions created by students that were developed using a 'significant' amount of schools resources. Colleges and universities once obtained fewer than 250 patents a year, but that was before the Bayh-Dole Act gave them ownership of inventions developed through federally financed research. Now they acquire about 3,000 a year, and in 2006 licensing fees and equity in spinoff companies totaled at least $45B — research powerhouses like Stanford and NYU pocketed $61M and $157M, respectively."
I completely agree. I attend University of Toronto, and the first thing our prof said about our senior year project was "If you have some ideas you are passionate about that may be profitable, keep them out of the project."
Easy solution - go to EU. The patent as described is a pure software patent and would be invalid outside US (and Japan). Way to squash innovation, US. :P
Let's keep a few things in mind:
1. This was "a technology he created as an intern at NASA in the summer of 2007." It's not like he was an undergraduate sitting in a classroom -- he was working for NASA when he made the invention.
2. "The iShoe researchers used some of their own work and previous NASA data ," the latter presumably taken with "an expensive device about the size of a phone booth" in the creation of their invention. So NASA's data (and presumably equipment) were needed to produce the invention.
3. While an intern, Lieberman was also a federally-funded (i.e., taxpayer-supported) graduate student, receiving money from both the National Science Foundation and Department of Defense, through his university, for his research. Like many (perhaps substantially all) graduate researchers in US universities, he was being paid by his university to do research. The fact that the research was being conducted at NASA doesn't change the fact that Lieberman was on the university payroll at the time the invention was made. Welcome to internships.
4. His company has also filed for federal funding to develop the idea for market and, "[o]nce funding is obtained, the iShoe could be for sale in 18 months, Lieberman said." So he's still using taxpayer money to develop the invention for market.
5. We don't know what the "hefty royalty" is (unless I missed it, it's not in any of the linked articles), but $75,000 is peanuts. "The iShoe has a way to go to reach the market [...] Lieberman estimates $1 million is needed for a broad clinical trial, and $3 million to $4 million to bring the insole to market." As a startup, his monthly burn rate will be much more than $75,000.
Frankly, I'm fine with institutions receiving a financial return on the work of their paid employees -- especially if taxpayers are ultimately footing the bill. In fact, I would argue that Mr. Lieberman is getting a sweetheart deal; I think once he gets into industry himself he'll find that the commercial sector typically requires employees to assign all rights to any future inventions (at least, in the company's field of interest) to their employer starting on Day 1, usually with trivial or no compensation.
It will be interesting to see what intellectual property policy the new iShoe company establishes for its own employees. As CEO, will Lieberman let his iShoe researchers invent and patent without expecting that those inventions will belong to iShoe?