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Ethical Analysis of Public-Private Commercial Arrangements in Academia

Issues Surrounding the Transfer of Technology

Extensive transfer of technology from university and nonprofit laboratories to the commercial sector is an increasingly common occurrence in the U.S. Widespread university activity in technology commercialization began only with the passage of the Bayh-Dole Act in 1980. This legislation enabled universities, nonprofit research institutions, and small businesses to own and patent inventions developed under federally funded research programs. One purpose of the act is to provide incentives for universities to patent and commercialize their research discoveries and for industry to make the long-term, high-risk investments at universities and other institutions that are necessary for product development and introduction.

The Bayh-Dole Act has served as a catalyst for the development of patenting and technology transfer as new university functions, for the emergence of a new discipline of professional university technology management, and for the encouragement of greatly expanded university interest in economic development.

Among other things, under the Act the federal government is given a nonexclusive, royalty-free, irrevocable license to use the invention to which the university retains title or have the invention used on its behalf. Any licensee holding an exclusive license for sales of products in the U.S. must substantially manufacture the product in the U.S. This rule can be waived by the sponsoring agency if the university can show that a reasonable effort was made to find a company that would manufacture the product in the U.S.

What are the ethical issues surrounding technology transfer? These issues can be analyzed from the perspectives of Kantianism and Utilitarianism in terms of moral considerations – i.e., social responsibility; social utility; and individual, professional and institutional survival. Froehlich addresses Utilitarianism, that is, weighing the costs of technology transfer and benefits derived therefrom. The problem is in projecting the consequences of technology, many of which may not be known at the time of transfer. Moreover, utilitarian principles can be sabotaged by self-serving goals. In other words, those who use this method of reasoning might rationalize one position or another under the “ends justify the means” approach that derives from utilitarian thought. The problem is in analyzing technology transfer, issue such as new product development, benefits to society, and enhancing the universities’ image can be over-valued while the costs of transferring new technology understated.

Some say that the Kantian position of the “categorical imperative” appears to be a rationalization for the golden rule: do unto others as you would have them do unto you. Kant’s foundational principle says: “Act so that you treat humanity, whether in your own person or in that of another, always as an end and never merely as a means.” In other words, the way we get to our goals is important – maybe more important – than achieving the desired end result. The transfer of technology might be motivated by advancing the social good thereby creating a sound basis for how and when to transfer technology. On the other hand, there may be self-serving goals involved that relegate societal needs to the back of the bus.  Tech transfer

Froehlich points to the moral agency of institutions to serve the public good. He seems to favor Kant’s categorical imperative, which gives rise to three factors for ethical considerations in technology transfer: promotion of the organization survival, preservation of individuality, and presence of goodwill. For this discussion, the fundamental function of an organization’s survival is paramount.

An organization must perpetuate itself so that it survives and prospers. Having spent over thirty years in academia, I can tell you this is a critical component of research-oriented universities that rely on technology funding to maintain the image of the institution and engage faculty in rewarding experiences. Many of our best universities are considered the best because of their technology transfer arrangements with nonprofits and the government that hold hope for advancements in society including new product development, invention of new pharmaceuticals to fight disease, and encouraging new business through entrepreneurship. The fact is universities can’t survive without technology transfer arrangements that lead to patent development and new products.

One word of caution from an ethical perspective. Increased involvement in technology commercialization can result in heightened awareness of, and opportunity for, conflicts of interest. As W. Mark Crowell from North Carolina State University points out, many universities have addressed these conflicts within their intellectual property policies. Issues of concern include manipulation of research results for personal enrichment, inappropriate use of university-owned facilities and equipment and improper influencing of research assistants to pursue research for profit rather than for knowledge. As universities have become involved in the creation of start-up companies to commercialize their technologies, the results can include the acquisition of stock in the new entity.

It’s essential that universities develop sound conflict of interest policies to deal with these issues. Many have them have done so while others address these issues around the periphery and still others barely look carefully at the pending conflicts before it is too late. Given the speed of technology transfer, universities should act quickly to establish sound policies that address all the stakeholders, not just the university and funding agency.

Blog posted by Steven Mintz, aka Ethics Sage, on April 12, 2018. Visit my Facebook page and sign up for my newsletter.

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