The dash for cash

December 17, 1999

Universities are fervently chasing commercial deals. The cost, argues Masao Miyoshi in a paper to be given in Chicago, may be a loss of academic freedom

Richard C. Atkinson, president of the University of California, says the goal of today's research university is to build an alliance with industries: "The programme works like this. A UC researcher joins with a scientist or engineer from a private company to develop a research proposal. A panel of experts drawn from industry and academia selects the best projects for funding."

Thus, although the university encompasses "basic research, applied research and development research", basic research (now called "curiosity researchI driven by a sheer interest in the phenomena") is justified only because "it may reach the stage where there is potential for application and accordingly a need for applied research". Industrial utility is the principal objective of the research university. Atkinson says this is the background of places such as Silicon Valley and of the fact that 40 per cent of California's biotech companies were started by UC scientists.

Can such a market-focused university protect its integrity? Atkinson is confident: "Our experience over the past 15 years has taught us a great deal about safeguarding the freedom to publish research findings, avoiding possible conflicts of interest and protecting the university's academic atmosphere and the free rein that faculty and students have to pursue what is of interest to them."

In fact, the issue of academic freedom - as well as the conflict of interest and commitment - is treacherous and complex in today's entrepreneurial university.

The Patent and Trademark Act Amendments of 1980 enable US universities to commercialise - that is, to own, patent and retain title to inventions developed from federally funded research programmes. Before 1980 fewer than 250 patents were granted to institutions each year; in 1996 more than 2,000 were granted. Since 1980 more than 1,500 start-up companies, including 333 in 1997, have been formed on technologies created at universities and research institutions.

University-industry relations are far more conjoined than is usually understood. Start-up companies form a satellite R&D community, providing students with jobs and training, while the companies receive information and technology from the universities. Moreover, some of the university-related labs and companies grow into corporations that then form industrial research parks.

The competition among universities for a larger share in R&D resources is fervent. The UC system is by far the largest research university, with sponsored research expenditures in 1997 surpassing $1.6 billion, followed by Johns Hopkins University ($942 million) and the Massachusetts Institute of Technology ($713 million). These use federal funds to generate university inventions that are then licensed or contracted to commercial developers. According to Atkinson, UC is "an $11.5 billion-a-year enterprise. The state of California contributes about $2 billion of that $11.5 billion, which means that for every dollar the state provides we generate almost five dollars in research funds."

There are, however, a number of traps and snares that enthusiastic administrators are all too eager to ignore. First, the emphasis on patenting - the conversion of knowledge into intellectual property - means excluding others from sharing that knowledge. The fear of public disclosure that would nullify the commercial possibility of a patent and licensing income hampers the free flow of information. Federal sponsorship ought to offer wide-open access to all discoveries and inventions created under it. Second, the real beneficiaries of academic technological inventions are not consumers and taxpayers but corporations and entrepreneurs.

One of the most controversial cases of the use of federal funding is the 1993 agreement between the Scripps Research Institute and the biotech company Sandoz. In exchange for a $300 million grant, Scripps gave Sandoz a major role on its joint scientific council, access to research findings even before notifying the funding agency (the National Institutes of Health) and licence to market all of Scripps's discoveries, all funded by the federal government to the tune of $1 billion. A congressional subcommittee investigated, and Scripps and Sandoz were forced to scale down the contract.

Sandoz made a very similar deal with the Dana-Farber Institute, a Harvard teaching hospital. For a $100 million grant, Dana-Farber gave Sandoz the rights to government-funded colon-gene research. The agreement also stipulates that anyone who takes Sandoz money must give Sandoz licensing rights to their research findings.

Corporations make vast savings by letting universities conduct research and reaping the profits by investing a relatively meagre amount in fees and royalties. Their funding of some aspects of the research is far from ample. Shouldn't a portion of the corporate profit be returned to the public?

Just as alarming as the uses made of federally funded research is the problem of conflict of interest and/or commitment - inasmuch as it involves questions of academic integrity, free intellectual inquiry and academic freedom. The college of natural resources at UC-Berkeley is involved with Sandoz, which is now merged with Ciba-Geigy and renamed Novartis Pharmaceuticals, the world's largest biotech firm.

The deal is similar to the Sandoz-Harvard partnership. A new Novartis subsidiary institute will pay $25 million to UC for research in plant genomics, housekeeping and graduate-student stipends at the college. For this, Novartis will get first rights to negotiate licences for 30 to 40 per cent of the research products. Research will be guided by a committee of three Novartis scientists and three faculty members. Another committee, which will determine which projects to fund, will consist of three faculty and two Novartis scientists. This is the first research agreement between an entire instructional department of a university and a for-profit corporation. Is this alliance what was intended by the framers of the 1980 act? Is the public the beneficiary of the released research results?

The CEO of the new Novartis institute expressed his view thus: "This research is the final statement in academic freedom. It's not just the freedom to wish you could do something, it's the resources that give you the freedom to do it." But academic freedom is not the same as free enterprise in academia.

A proposed $25 million lab to be provided by Novartis for UC-Berkeley and the appointment of Novartis scientists to adjunct professorships at UC-Berkeley are also now being discussed. Since the talks were made public, there have been several protests, including those from graduate students of the college of natural resources.

Universities are engrossed in forming partnerships with business. They seek more funds and resources that will generate marketable intellectual property that will, in turn, benefit academia and business. The cycle will be repeated by the corporations that repay the universities in grants and funds. The University of Chicago, which has no engineering school, saw its national rank in science funding sink over two decades from among the top ten universities nationally to about the top 20. To catch up, it launched in 1986 a venture-capital operation with Argonne National Laboratory to "cultivate an expanded community" of administrators, faculty, "potential CEOs, consultants, associates and investors". The head of the operation talks of a new ethic: "I've told the faculty they have an additional responsibility to go beyond the discovery of new knowledgeI No longer is the job to sit in your laboratory and think, and expect me to provide all the resources."

Everywhere, such ventures show signs of a growing synergetic relationship between industry and academia. "Historically," says the director of industrial partnerships and commercialisation for Lawrence Livermore National Laboratory, "we were a closed place until about five years ago. Now we are more interested in maximising the bang for buck." From the east coast to the west, from America to Japan, from Australia to Europe, the transformation of academia is indisputable in nearly all of the institutions that are capable of attracting corporate interests.

Masao Miyoshi is professor of literature at the University of California, San Diego. This is an extract from a longer paper to a workshop on scholarship and commitment at the MLA on December 28.

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