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12/20/2005
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U.S. Universities Loosen Grip On Tech Rights To Keep Vendor Grants From Going Overseas

An agreement between four IT vendors and seven major universities means intellectual property created by their collaboration will be made free to all.

Call it a 1 in 10,000 gamble. University researchers, helped by funding from IT vendors, hope they develop a new technology that could generate millions of dollars in licensing fees for their schools' coffers. But such payoffs are rare, and may be standing in the way of more such partnerships—and further opening the door to schools in other countries.

The dream of hitting it big has made been a major stumbling block among IT vendors in reaching agreements with universities on how to value the intellectual property created by their collaborations. A new set of principles, announced Monday, could result in the research being made available to vendors and academicians without charge, at least when it comes to open-source related innovations.

Backers of these guiding principles—Cisco Systems, IBM, Intel, and Hewlett-Packard--and seven major American research universities believe the agreement will accelerate IT innovation and contribute to open source software research, which in turn, will propel the development of related industry standards and greater interoperability as the enterprises manage intellectual property in a more balanced way.

Last summer, IBM and the Ewing Marion Kauffman Foundation, which focuses on advancing innovation and entrepreneurship, cosponsored a summit between industry and universities to try to resolve intellectual property barriers that caused some IT vendors this decade to contract with universities overseas to conduct tech research. "Clearly the concern is that we're outsourcing our knowledge economy," says Lesa Mitchell, VP for advancing innovation at the Kauffman Foundation.

HP, for one, has pumped thousands of dollars into nanotech research at schools in Russia and China. Reaching agreements with foreign colleges in some cases takes only a few weeks, compared with months or even years with American universities. Such delays in a fast-moving IT marketplace can result in technologies being developed too late to be of financial benefit to anyone.

A recent agreement between HP and UCLA to conduct nanotechnology research took two years to finalize. "It's a difficult topic, because there's a belief that there is money in this for the licensee," says Wayne Johnson, VP of worldwide university relations at HP. "But the corporations, typically, are not even sure there will be intellectual property. So, the end product of this is tremendous delays, and the impact of the relationship. You're willing to spend the money, and you can't get an agreement, and it goes downhill."

Johnson estimates that in the past decade only about 10 licenses have resulted in significant income for universities. But the hope of being one of those licensees has resulted in universities losing millions of dollars in potential research grants from American IT vendors. Simply, universities are more likely to receive much more money from vendor research grants than from licensee fees. That might not be true in other fields, such as pharmaceuticals, but it is in IT.

The agreement won't mean vendors will stop using overseas universities, since many foreign research facilities have talented scientists and engineers. And, U.S. IT vendors are eager to build relationships that can get them closer to market needs in countries such as India and China that are growing fast.

Yet, even in a flat world, Mitchell says, there's added cost to fund research overseas because of distance, diverse cultures, and varying intellectual property laws. "It's a benefit to our own capital market in the United States that we allow universities and industry all the opportunities to be collaborative with one another," she says.

Strother Moore, chairman of the University of Texas' computer sciences department, says in a statement that open collaboration benefits university researchers and students with ready access to experts and data that helps the schools focus on the right problems to solve. "Open collaboration," he says, "resonates with our primary mission to society: education and the creation and dissemination of knowledge."

Besides the four IT vendors and the Kauffman Foundation, universities that developed and adopted the principles include Carnegie Mellon University, Georgia Institute of Technology, Rensselaer Polytechnic Institute, Stanford University, University of California, University of Illinois, and the University of Texas. Other collaborators include the National Science Foundation, the office of U.S. Sen. Joseph Lieberman (D-Conn.), and the National Academies' Government University Industry Research Roundtable.

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