Public Research for Private Gain 

UC Regents recently approved a new corporate entity that will likely give a group of well-connected businesspeople control over how academic research is used.

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I asked Graham Fleming, Berkeley's vice chancellor for research, if the school had plans to institute a Newco-type entity to control tech transfer. "We are not currently considering a similar set-up to manage our technology transfer," he said. "We are very interested in exploring new and innovative ways to facilitate the translation of our research breakthroughs into goods and services that benefit the public. At the same time we are also well aware that we need to do that in a manner consistent with our values and public character."

Newfield of UC Santa Barbara said that Berkeley and UCLA currently have "different visions" when it comes to tech transfer. "The contrast is between a narrow revenue goal for commercializing science and a public interest goal for getting science into the world," he said. The irony of something like Newco, he continued, is that managing university research to maximize patenting and corporate startups doesn't even appear to increase revenues for the university. "If UCLA doesn't seem successful enough right now as a science business, it's not because they don't think about business enough or have shut out entrepreneurs. They've been focused on the business side for at least twenty years."

Carol Mimura, UC Berkeley's assistant vice chancellor in charge of tech transfer, is a well-known champion of making technologies more widely available through a public-interest model and has published numerous papers on the subject. Berkeley's tech transfer office is known for inserting "humanitarian use terms" in licensing agreements with companies. In April of this year, Berkeley won the US Patent Office's prestigious Patents for Humanity Award for developing and licensing an anti-malarial drug at low cost so that it can be distributed in regions of the world that are most afflicted by the disease, but are least able to afford pharmaceuticals.

Barnett, the former head of the University of Washington and UC Santa Cruz tech transfer offices, believes the whole model of a university holding a maximum number of patents with the intention of exclusively licensing them in hopes of a big payout is flawed. Barnett instead recommends that universities include in their innovation practice something more like a technological commons.

"Universities have an important role, and that is to manage IP [intellectual property] to develop commons and standards and platforms — to coordinate research and to ensure broad access," he said. "They should hold most of their patents for non-exclusive licensing."

Barnett added that some of the most lucrative patents have been biotech tools that were licensed non-exclusively, like the Cohen Boyer patents. Applied for in 1974 by Stanford University, and granted by the US Patent Office in 1980, the Cohen Boyer patents covered one of the most fundamental methods used across the entire biotechnology industry today: gene cloning. Stanford purposefully licensed the patents non-exclusively to 468 companies. These companies went on to create more than 2,400 products and billions in sales. The non-exclusive license upset powerful Silicon Valley biotech companies — including Genentech — that wanted to monopolize the method through exclusive licenses for greater profits. Cohen Boyer also reserved the rights of other universities to practice the patented methods without charge. The main reason Cohen Boyer was set up this way, said Barnett, is because faculty and the university, not businesspeople, were driving the process and making the decisions.


Mendelson, Belldegrun, and Doumani did not respond to requests for interviews for this story, and Shockro of Mendelson's law firm and several other members of the UC Board of Regents did not respond to inquiries about their current and past links to various companies that license UC technology and their participation in the creation of Newco.

A UC spokesperson, who appears to have been forwarded emails from me to Mendelson via his law firm, responded: "As an alumni regent, Alan Mendelson is about to complete a two-year term that included one year as a voting member of the Board of Regents. As is the case for all Regents, his biography is publicly available online. Regarding companies in which Regents have a material interest, the rules only prohibit them from decision-making about those companies, not investing in them. There is nothing wrong with Regent Mendelson, or any other Regent, having an interest in companies that license UC technology, so long as this prohibition is followed."

According to legal counsel within the University of California Office of the President, as a fourth branch of California's government, the Regents of the University of California are not bound by the Political Reform Act of 1974. Instead, the regents chose to voluntarily follow the act by devising their own ethics policies for the university. According to UCOP, the regents carry out oversight of the university and do not make decisions that materially benefit specific companies, therefore they rarely run into conflict-of-interest problems requiring them to recuse themselves from voting on matters like Newco.

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