Universities Drive Lifesaving Research, But Industry Has Monopolized Patents

Universities Drive Lifesaving Research, But Industry Has Monopolized Patents

The emergence of parallel knowledge monopolies is more siloed than ever before — patents on the one hand, basic research on the other — sparking worries about how smoothly innovative ideas will flow in the future between universities and industries.

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Why you should care

Industry is buying control rather than funding research, which means a world of pain may result.

When University of Toronto scientists discovered insulin, they intended it to be much cheaper than the $1,251 it costs the average American annually. That’s why they sold their patent to the school for just $1 in 1923, allowing the university to license the lifesaving medicine to many manufacturers to keep prices low. But in 1972, the university sold the lab manufacturing insulin, which was then sold again, to French pharma giant Sanofi, one of only three companies controlling prices in a global insulin market worth billions.

It’s a classic case of the difference between when academics, rather than private interests, control new discoveries. Industry is becoming increasingly voracious, gobbling up profitable knowledge by creating a monopoly on patents — a shift that comes as companies off-load the cost of basic research to universities and public institutions. And it is sparking concerns, from the cost of future lifesaving medicine and technology to job opportunities for Ph.D. scholars.

For more than a century, industry formed an important pillar along with universities and governments in propelling basic research. In the 1980s, both Apple and the iconic Bell Labs, whose scientists have won eight Nobel Prizes for creating everything from the transistor to the laser, produced five times more scientific papers than patents. That ratio is important: The scientific community can access papers, while patents restrict the use of their knowledge to the owner.

Universities are at the heart of the ecosystem.

Vincent Lariviere, researcher, University of Montreal

But industry leaders are moving away from basic scientific knowledge generation to market-oriented findings aimed at winning patents. Companies produced 74 percent of patents in 1976; by 2014, it was 88 percent, according to an evaluation in the peer-reviewed journal PLOS One of all research published and patents filed in America since the 1970s. On the other hand, individual scientists won 26 percent of all patents in 1981 but received only 8 percent of patents in 2014.

Bell Labs, after shuttering its basic physics research program in 2008, now produces five times more patents than research papers. Apple publishes barely 10 research papers a year but secured 2,200 patents in 2014. Until 2009, Google published more papers than it filed patents, yet in 2014 it registered more than 10 times as many patents as papers.

Universities are moving towards “a nearly exclusive monopoly” over basic research, taking up the space ceded by industry, says University of Montreal professor Vincent Larivière, lead author of the PLOS One study. Their share of engineering and technology publications, less than 60 percent in the 1980s, rose to 87 percent in 2014. Meanwhile, government’s share of basic research papers declined by 50 percentage points.

“Universities are [now] at the heart of the [research] ecosystem,” Larivière says.

The implications of industry’s desertion of basic research and its monopolization of patents extend to future researchers. Nations now churn out Ph.D.s twice as fast as a decade ago, but that highly educated workforce has fewer jobs in industry, as companies cut back on their research workforce. Academia alone can’t fill their absence. The percentage of tenure-track faculty positions in U.S. universities declined from 45 percent in 1975 to 30 percent in 2015.

By moving away from research, governments also lose expertise and “cannot make sound policy or informed decisions,” warns Larivière. Government contribution to basic research dropped from 31 percent to 14 percent between 1981 and 2013 across the 36 member countries of the Organization for Economic Cooperation and Development.

So how are corporations producing more patents with less research of their own? By partnering more with universities. Companies like General Electric and Phillips Health Systems are moving their research and development arms closer to college campuses. The percentage of industry-produced research papers that were co-authored with universities increased from 21 percent in 1980 to 76 percent in 2014.

Some companies establish grants for faculty positions or directly fund research projects. Others, including Amazon, are discussing deals where researchers take sabbaticals to work with them. “We’re moving to a system that is actually … accelerating innovation,” says Ken Lutchen, dean at the College of Engineering at Boston University.

But the growing industry monopolization of patents suggests that the profitability of these partnerships often goes to the one funding them: industry. That’s not necessarily a bad deal, says Lutchen, since schools (faced with cuts in federal support for basic research) just “don’t have the resources or ammunition.”

Still, if companies are doing less research — and refusing to publish what little they do — the collective pool of knowledge could be depleted, critics caution. The next life-saving drug could become expensive much faster than insulin did.

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