Today, land-grant universities such as Penn State are called upon to be engines for national and regional innovation. To fulfill that mission, these universities need all innovation avenues to be wide open for the two-way traffic that is translational research and development. At Penn State we are responding to that call by seeking to transform our culture from that of a traditional research-intensive, public land-grant university to one that is more dynamic and nimble and better able to drive the transfer of science into technology. As a part of this effort, in addition to fostering entrepreneurship, we seek to spur the growth and development of industrial research partnerships. The goal is to make the university a model for open innovation in the twenty-first century, while at the same time bringing us back to our core historical mission. To do all of this we have developed a seven-point plan to reinvigorate our culture (see "Penn State's Seven-Point Plan," p. 13), to be implemented over the next two years.
Of these seven points, none is more important than the second-to spur growth in research by taking a more flexible approach to IP ownership-nor has any garnered more attention from industry and from academia. After a thorough analysis, Penn State has concluded that it is no longer viable to maintain the long-held position that we must own all intellectual property that derives from any and all research that we do, even that which is the product of industry-funded research. This change in approach arises directly from a renewed engagement with our core mission to benefit students and society. It is our view that it is to the benefit of society, and to our students and faculty, to let the ownership of IP developed with industrial funds flow back to the sponsor. This, we believe, will catalyze more commercialization of new technology, help the university build stronger ties to practitioners, and create new adjacencies between theory and practice from which both students and faculty can learn. In this article, I lay out the factors that led the university to make this change and try a wholly new approach to IP developed at the university.
Land-grant universities were established by the Morrill Act of 1862, which allocated land grants to each state and specified
that all moneys derived from the sale of the lands aforesaid by the States . . . the interest of which shall be inviolably appropriated, by each State, . . . to the endowment, support, and maintenance of at least one college where the leading object shall be, without excluding other scientific and classical studies, and including military tactics, to teach such branches of learning as are related to agriculture and the mechanic arts, in such manner as the legislatures of the States may respectively prescribe, in order to promote the liberal and practical education of the industrial classes in the several pursuits and professions in life.
This is the historical basis for Penn State's mission, its raison d'être . As the nation's first land-grant institution, Penn State's core purpose has always been to do research with practical value and to disseminate that new knowledge for the betterment of society. For most of its history, the university did exactly that and did it well. The creation of new inventions and innovation was in the core mission, but we did not call it intellectual property, nor did we think in terms of its market value. For many decades, the university did not even seek to protect its inventions and innovations. Rather, as an institution well supported by public funding, Penn State simply disseminated findings as effectively and as quickly as possible, with little thought of institutional commercial gain.
This changed, for Penn State and for many universities, approximately three decades ago, circa 1980. In a significant departure from the practice of over 100 years, university inventions and technological innovations that were the products of our research, whether funded publically or privately, were to be protected with patents and held as the institution's intellectual property for license to industry. …