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From The Faculty Chair

The Intellectual Property Dilemma

Steven R. Lerman

In the past century, MIT and other major universities have evolved a set of policies and procedures for managing intellectual property created by the faculty. These policies were relatively stable for three simple reasons. First, the vast majority of intellectual property was easily divided between traditional inventions governed by patents and written works governed by copyrights. Second, despite the occasional invention that was licensed broadly or rare, spectacularly successful textbooks, the most patented and copyrighted works produced little or no revenue. Finally, while research itself is expensive, the creation of scholarly papers and books required very little in the way of university resources beyond the faculty member’s time and the use of the library and office space.

Much has changed since that simpler time. Computer algorithms and business processes are now patentable inventions. There is a growing number of sophisticated, multimedia Websites to support teaching and learning that require teams of specialists to create and maintain. New companies with significant economic value are being created to provide for-profit educational services. These organizations are seeking alliances with individual faculty members and the top-tier universities to provide educational content and brand name recognition. In addition, venture capital companies are routinely contacting faculty and students seeking new ideas upon which companies might be founded and are on occasion actively recruiting our students to leave MIT before graduating.

All of these changes have combined to undermine the usefulness of our traditional policies regarding intellectual property. There is widespread recognition among faculty and administration that we need to develop better ways to govern issues of ownership, faculty rights, faculty responsibilities, our relationship with our staff and students, the use of our university’s good name, and the sharing of revenues in this area.

It should come as no surprise that we are not the only university exploring new policies in the arena of intellectual property ownership. Both the American Association of Universities and the American Association of University Professors have studied some of these issues and developed policy proposals for their respective constituencies. Not surprisingly, these organizations have come to very different conclusions about whether the faculty should retain ownership of intellectual property such as courseware or educational Websites. The potential for conflict between universities and their faculties may well prove to be a key divisive issue on some campuses.

The good news in all of this is that, at least in my view, we have some important principles already established upon which we should draw in formulating sensible policies. None of these principles is more important than the dictum that we must continuously keep our mission as a university in mind. MIT and similar institutions do not exist for the purpose of generating royalties, licensing fees, stock options and similar remunerations for either the faculty or the institution itself. Rather, we exist to educate the next generation and to create new knowledge of value to society at large. To the extent that what we do creates financial gains, we should organize our policies to use such resources to further our long-term mission. For example, the financial gains from distributing courseware created by MIT faculty might support the continued evolution of those products, the development of new multimedia materials in different fields, or for that matter, the subsidization of other activities at MIT that are meritorious but not financially supportable without new revenues. Any restrictions placed on the distribution of new ideas in order to create licensing revenues must be carefully balanced against the effects of those restrictions on our long-term mission.

A second key principle is what is often referred to as "conflict of commitment." Being an MIT faculty member has always been seen as a full-time job in which our primary employment commitment is to the Institute. Our energies at creating new courses or developing new knowledge should, with some exceptions, be focused on our work here at MIT rather than in new companies or other universities. To the extent we serve as consultants to companies, it should be because these activities either enhance our effectiveness as researchers and teachers or enable us to migrate new ideas into actual use for beneficial ends. Similarly, if we are involved in creating new companies, it should be because that is the most effective way for us to translate our research into actual products and services.

It is notable that our universities have often interpreted conflicts of commitment quite differently. Princeton, for example, has generally placed significant restrictions on its faculty in applying the conflict of commitment principle; MIT has generally interpreted the principle far more loosely. As new opportunities arise for our faculty to teach and undertake research outside of MIT, we may choose to draw more heavily on the foundations of conflicts of commitment in limiting the faculty’s options. For example, we may decide that it is inappropriate for a full-time faculty member to develop new teaching materials for exclusive use of a for-profit distance education company, particularly if the materials draw heavily on lecture notes and other materials developed for his or her MIT courses.

Another central principle is the "use of significant Institute resources." Briefly stated, this idea has served as the basis for determining whether intellectual property created by a faculty member belongs to the individual or the university. As with most universities, MIT has asserted its own ownership rights for any intellectual property that was created using one or more resources of the Institute to some significant degree. Some of these resources, such as the faculty member’s office space or the use of the libraries, are by policy exempted from this criterion. Textbooks are considered the property of the author unless they were developed using MIT’s funds allocated specifically to support the writing of those books.

The critical problem MIT and its peers face in applying the significant use policy in today’s more complex environment is determining how resources such as computers, network servers, and support services for creating electronic media should be judged. Does it really matter if a textbook is in digital rather than printed form? Are Web-based lecture notes logically an extension of the idea of textbooks, particularly if these notes were created by a professor without the significant use of students or staff? How are ownership rights of such materials affected if funding from sources such as the d’Arbeloff Fund or the Microsoft-MIT I-Campus project is used in creating them? If MIT does retain ownership of such materials, does this imply that faculty members can no longer use these electronic resources if they leave the Institute for other universities? And, who shares in any revenues generated from the sale or licensing of such intellectual property?

In formulating any new policy, we should be careful not to confound the distinct issues of ownership, control of use, recognition for creative contributions, and sharing of revenues. Each is a distinct aspect of intellectual policy. For example, MIT’s current patent policy provides MIT with ownership rights in most cases but requires sharing of revenues. Similarly, one can be the recognized author of a work without owning the copyright. In fact, most faculty members routinely assign copyrights to publishers as part of standard agreements. In doing so, we still retain the recognition as the author of those works.

All of these questions reflect realistic concerns of both the faculty and administration. There are an infinite number of situations one can reasonably envision that make it difficult to determine the ownership of new types of intellectual property, and no written policy can eliminate the need for case-by-case judgment. However, we should expect MIT to develop concrete policies that meet the following tests.

 

I expect that there will be substantial discussion in the near future about intellectual property policies. The issues surrounding this area are complex and will require substantial involvement of both the senior administration and the faculty governance system. To be effective, any policy must evolve from a significant consensus that decisions derived from the policies will be fair to all involved and serve MIT’s long-term interests.

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