IMG_3421Tunnelling Out: How Intellectual Property Created in Scottish Universities using Your Money is Given Away ‘For Free’ by the Neoliberal Scottish Funding Council.

In a previous article, I showed that the Scottish Funding Council (SFC), the body that funds Scottish Colleges and Universities, was using Scottish Government funds to pay the European subsidiary of the Trident promoting RAND Corporation, a military think tank implicated in torture, for work promoting the neoliberal Research IMPACT programme. In this article I explore how SFC in furtherance of a clear neoliberal agenda, is requiring publicly funded Intellectual Property (IP) from Scottish Universities to be given away to companies free –  to the clear delight of some of the largest tax-avoiding corporations on the planet.

The Scottish Funding Council and Compulsory ‘Easy Access IP’

In 2011 SFC announced an increase in teaching and research funding for Scottish Higher Education Institutions (HEIs) in return for support for the “Easy Access IP” (EZIP) initiative for universities and industry “to share intellectual property”.  Cabinet Secretary for Education and Lifelong learning, Mike Russell, hailed this “voluntary agreement”   “strengthening the links between Scotland’s businesses and universities” as “key to this Government’s ambitions for Scotland”.  A single set of contracts would cover “easy-access IP licensing” which, he said, would  “protect both university and industry partners”.  Badged as “University Technology: Invented in Scotland” it was  part of the Scottish Government’s  “drive”  to ensure that  “as much intellectual property as possible generated by the sector is readily available to business and industry, particularly to Scottish small and medium sized businesses”.

Thus, the minister whetted neoliberal industrial fantasist appetites to obtain ‘for free’ the intellectual product of Scottish universities bought and paid for by the Scottish public.  It would not remain “voluntary” for long.

Is SFC really being run by arch-unionists and do the ‘Scottish’ civil servants that control it, take their primary lead from Whitehall rather than Scottish ministers? Control of the civil service is not devolved.  Can it be that they do their best to out-Brit the mother ship? 

This victory was a cue to an already frantic business lobbying operation to increase the pressure to turn a “voluntary” agreement into a non-negotiable condition of university funding.  Questions and answers in FOIs reveal that this included members of the Scottish Life Sciences Association, the trade association which describes itself as “the voice of Scotland’s vibrant life sciences industries to investors” in: “lobbying the Scottish Government and the Scottish Funding Council to adopt the Easy Access IP initiative”.

On 29th of February 2012 an ‘Easy Access Innovation Summit’ opened by then UK minister for Higher Education, David Willetts, took place at the Royal College of Physicians in London.  In an up-beat report from EasyAccess IP, the body promoting EZIP, which describes itself as an “International collective of Universities and Research Institutions who believe in creating impact from research outcomes via knowledge exchange”, we discover that:

“Key opinion leaders from across the UK innovation system met at the Easy Access Innovation Summit debate the theme of driving innovation across industry and universities. The (Summit) brought together leading representatives from industry including Unilever, AstraZeneca, Rolls Royce and GlaxoSmithKline, to discuss the key issues and challenges of university and industry engagement. The message from industry was clear; The UK is one of the best and easiest countries in which to build and transact relationships with universities, due to professionalism, flexibility and the excellence of its research base.”

It would perhaps be unduly disobliging to carp that Unilever, AstraZenca, Rolls Royce and GlaxoSmithKline are not exactly the “Scottish small and medium sized businesses” of the minister’s imagining.  When playing Santa Clause to some of the richest companies on Earth the PR plays better if the script states that the largesse is intended for Scottish widows and orphans.  Nor does it appear that there was a surfeit of ‘debate’ at this wonderful celebration of endeavour and enterprise, since those universities adopting Easy Access IP:

“No longer place disproportionate emphasis on intellectual property as a revenue source” and that the “key to the success of Open Innovation is that partnerships need to be bounded by quality, trust, and commercial values.”

Note that word “disproportionate” – in EZIP land “commercial values” apparently do not include universities recouping the costs of publicly-funded research and Intellectual Property (IP) from companies that use publicly generated IP to make profits from it.

The Summit, part of a project led by the Universities of Glasgow, Bristol and King’s College London (all three undeniably academic institutions of international standing), was supported by the UK Intellectual Property Office (formerly the Patent Office).   Apparently:

“Glasgow, Bristol and King’s, along with the University of New South Wales (Australia), have pioneered a new way of working with industry – Easy Access IP. Using quick and simple one-page agreements, certain early stage intellectual property is licensed free to companies.

Well, there’s no denying that their stated objective was to:

“Move new ideas swiftly into the hands of companies who can then develop new products and services that will benefit people and the economy. “

Not to mention assist the likes of Unilever, AstraZenca, Rolls Royce and GlaxoSmithKline to make even more millions for their shareholders, whilst paying large fees to the Big Four accountancy firms (Deloitte, PwC, Ernst & Young and KPMG)  to ‘minimise their tax liabilities’ in this country.

Apparently the EZIP approach was:

“Welcomed by industry and policy makers”

What’s not to like about the offer of ‘free IP’ paid for by the tax-payers?

For example, Dr Malcolm Skingle, Director, Academic Liaison at GlaxoSmithKline praised the consortium’s efforts to explore new ways of sharing university IP. He said:

“We welcome new mechanisms that open up the opportunities for engagement between industry and academia, and transfer new technology into the marketplace quicker”.

Not to mention “for free”.

The report concluded:

“Easy Access IP has been adopted by 11 universities in the UK and internationally, with others adopting Easy Access-like approaches”.

Pointedly missing from these 11 universities were Oxford, Cambridge, Imperial, UCL and Edinburgh in the UK, all of which have highly successful and lucrative IP portfolios. Also absent were MIT and Harvard in the US – indeed any US university whatsoever.

Not only would these highly commercially successful US academic institutions regard giving away valuable IP from Federally funded research ‘for free’ as a somewhat quaint proposition, it would contrary to the terms and conditions of Federal research funding, and illegal under the BayhDole Act, which also requires that if IP is licensed to use or sell in the USA, all products must be “manufactured substantially in the United States”.

No such strictures have apparently been placed by the Scottish Government on the EZIP  largesse –  now required as a condition of SFC funding to all Scottish universities. The notion that EZIP will make “as much intellectual property as possible generated by the sector is readily available to business and industry, particularly to Scottish small and medium sized businesses” is little more than a pious hope (or PR stunt) and is in fact (as I explain below) the least likely outcome of the exercise.

Intellectual Property and Scottish Business

So what is being given away ‘for free’? A patent is a state-granted monopoly guaranteeing competition-free sales of the patented technology or products that contain it – with resulting monopoly profits.  Thus the government (through, for example, funding from the Scottish Government or a UK Research Council) both creates patented technologies and provides the legal framework for monopoly profits for those who hold or license the patents.  That’s why companies pay legions of expensive lawyers, patent attorneys and accountants to procure and defend them.  In the end the consumer pays for all their fees, and the companies pocket monopoly profits.  So much for ‘free-trade’!

Because of the centripetal forces of neoliberal globalisation, and the fact that the Scottish business class has a sense of entitlement in inverse proportion to its abilities, competence and success, the patents created on successful Scottish university-generated technologies generally result in licences to multi-national conglomerates, or the creation of spin-out companies which, if successful, will in turn be acquired by the same global companies – and then closed down as production is moved elsewhere in the neoliberal process of labour arbitrage.  Unless such companies operate here (few of them do) – this does Scotland little good.

The problem for Scotland is that, partly as a result of the neoliberal revolution which deliberately and systematically destroyed Scotland’s industrial base  – and partly because the present Scottish business class is possibly the least-able, most incompetent, risk-averse, in-bred, rent-seeking, low-grade, spiv-ridden, publicly-subsidised, funny-handshaking group of Rotary-club spinners , exclusive-golf-club swingers and greedy mountebanks that it is possible to imagine, Scotland’s world-class universities, if they wish to see their IP used and realise a return, have little choice but to licence their most innovative technologies to the only companies able to exploit them successfully.  Few of these are in Scotland.

However, Scottish business has at least one world-class attribute:  Lobbying government and civil servants (many of whom are in the same clubs and societies).  It is quite simply unrivalled at self-serving special pleading.  And they expect – and receive – lots of public sector help: Scottish Enterprise is social security for lame businesses, but without the Atos-style work capability tests for our Business Class subsidy junkies.

By the 2nd of April 2012 all of this EZIP lobbying had translated into a Policy Paper  (that can be seen included in response to an FOI ) that contained  Ministerial Guidance that stated:

“Specifically, I believe there is merit in the model of Easy-Acces IP …. being adopted by all institutions in receipt of SFC support for research and knowledge exchange”

Whether or not tying EZIP to higher education funding in Scotland was exactly “voluntary” in 2011, by academic year 2012-13 it had become (and remains) compulsory.

The Scottish Funding Council Circular for Indicative Main Grants for that year stated:

“For universities in receipt of research and knowledge exchange funding, it will be a condition of grant that they ensure an ‘Easy Access IP’ model is in place by 2012-2013. ‘Easy Access IP’, allows university generated IP to be released to companies for free, using quick and simple agreements”.

At the time of this writing, no other part of the UK has followed Scotland’s lead on this.  This is probably due to successful counter-lobbying by the Oxbridge-London Golden Triangle universities (see the Oxford view below).

Publicly Funded IP Global Corporations:  Tax Avoidance Spying and Blacklisting of Green and Social Activists

To be fair, Glaxo’s Dr Skingle’s comments (above) are neither unusual nor remarkable. They are consistent with comments I have heard for over 20 years from company spokespersons regarding what they see as their ‘dues’ from universities – usually justified by statements that their companies “fund the universities” through taxation, and so it is entirely right and proper that university science should be conducted for company benefit.  They have long railed against the ‘unreasonableness’ of universities that demand licence royalty income from companies that use their IP – this being regarded as universities placing a “disproportionate emphasis on intellectual property as a revenue source”.

But such arguments are wearing increasingly thin in the light of revelations from tax justice organisations concerning just how little tax such companies actually pay, the ends they go to avoid paying tax, and their extensive use of tax havens and offshore companies to avoid paying both company and personal tax by the senior executives of such companies. (See for example David Whyte’s splendid little book: How Corrupt is Britain?).

Whilst it would be invidious to select any such companies at random (they are just about all at it) it is a useful – if far from comprehensive – exercise to take even a cursory look at the named companies that attended the Easy Access Innovation Summit for evidence of their commitment to societal debts to the countries in which they make so much profit, and the funding of our “professional, flexible and excellent” research base.


Well, apparently GSK “has a long history of tax avoiding, on transfer pricing and of using of tax havens”  see here:

GlaxoSmithKline still can’t get its tax right. The US Internal Revenue Service (IRS) is now challenging it concerning the period from 2001 to 2003. The dispute is over inter-company financing arrangements. Call that transfer pricing by any other name. GSK, of course disputes the claim. But let’s recall, this is the company that has already settled $3.4 billion over transfer pricing issues with the IRS in 2006 (the biggest tax settlement ever), and remains in conflict with HM Revenue & Customs on the same issue for all periods since 1994.”

And again here:

“GlaxoSmithKline PLC is embroiled in a potential $1.9 billion court battle with the Internal Revenue Service, which says the drug maker owes back taxes, interest and penalties stemming from tax deductions Glaxo generated essentially by making payments to itself…The company claims deductions on its U.S. tax return, but no money ultimately leaves the parent company’s coffers, and publicly reported profit is unchanged.”


AstraZeneca has settled a long-running tax dispute in a deal which sees HM Revenue & Customs refund tax payments that will now go to America instead.

The pharmaceutical company announced on Monday morning that US and UK tax authorities have reached an agreement over where it declares certain profits. The dispute over so-called “transfer pricing” dates back to 2002, and was the most significant of AstraZeneca’s ongoing arguments with tax authorities. Under the agreement, AstraZeneca will pay out a total of $1.1bn (£689m) in taxes, substantially less than it had budgeted for. This means the company can unlock some of its outstanding tax provisions, increasing its earnings this year by $500m and raising its profit targets by almost 7%.

Its effective tax rate will also be slashed from 27% to 21%.”

They’re all at it:  The Tax-Avoiding Subsidiaries of the FTSE Companies

Action Aid has detailed the tax haven subsidiaries of FTSE 100 companies, building on work first done here. (The full list published by the Guardian can be found here).

The list is long, very long, but among its entries are:

FTSE100 company Sector Total number of offshore companies Number of companies
 in tax havens
% of companies in tax havens
AstraZeneca Pharma/Chemicals 255 53 20.7%
Glaxsmithkline Pharma/Chemicals 420 97 23.1%
Rolls-Royce Engineering 323 79 24.5%
Unilever Household Products 696 172 24.7%


Thus each of the named companies attending the EZIP event has several hundred offshore subsidiaries, and in each case from a fifth to a quarter of these are registered in tax havens.

In addition to hiding profits in tax havens, and using transfer pricing between offshore subsidiary companies to minimise tax liabilities in the UK , where much of the profit is generated, all of these companies pay huge amounts of money in lobbying fees.  For example Big Pharma is massively involved in lobbying Europe with GlaxoSmithKline (GSK) and AstraZeneca both in the top five with a combined spend of between €3,250,000 and €4 million. A recent Corporate Europe Observatory report has highlighted how the Pharma corporate lobby massively outspends public interest groups on the medicines issue, with TTIP a growing focus of interest.

Tax avoidance and lobbying are not the least of the anti-social, indeed sinister anti-democratic activities of such companies.  A number of them have also been involved with an offshoot of the notorious Economic League in infiltrating and spying on protest groups, often resulting in blacklisting and loss of employment for those who try to exercise their legal and democratic rights of protest –as reported here by Phil Chamberlain:

Legal protest groups targeted by corporate spies

“Jack Winder spent 30 years with the (Economic) League – which kept files on people it considered subversives on behalf of corporations. He told MPs on the Scottish Affairs Select Committee that he and a colleague, Stan Hardy, set up Caprim “to warn companies about threats to their well-being”. He said: ‘Mr Winder said they targeted campaigners against the defence, pharmaceutical and agrochemical industries’. He named GlaxoSmithKline, Novartis, Rhone-Poulenc, Zeneca, Monsanto, Rio Tinto, JP Morgan and Morgan Stanley as among Caprim’s clients. He denied any links with the security services though he admitted that he regularly met Special Branch officers while with the League.”

Thus what can be said for sure about the companies who successfully lobbied the Scottish Government for EZIP, as a condition of grant for Scottish universities, is that among their number are corporations that actively avoid paying due taxes, spend huge amounts of money on influencing politicians and bureaucrats to give them favourable policies, and actively spy on and blacklist citizens who try to exercise their democratic and legal rights to influence the politicians who nominally represent them as electors in the only legal ways open to them.  Clearly, one method seems to be infinitely more effective than the other.

So, how have we arrived at a situation where the Scottish Government and its agencies appear to act as neoliberal agents of big business in making the Universities give away IP to them “for free”?


The Jarratt Committee and Report and the Neoliberal Revolution in UK Universities

The blueprint for the neoliberal coup against universities was the 1985 Jarratt Report – from the eponymous committee set up very early in the Thatcher regime. Its contents have had a revolutionary effect on UK universities.  I have written in some detail about this elsewhere. Its outcome was the takeover of UK Universities by, and for business.  One of the means of doing so was the replacement of the ‘arms-length’ University Grants Committee by the very hands-on Funding Councils – of which SFC is one, and replacing consensus collegial management of the universities by business-led – increasingly brutal – top-down management regimes.

In addition, the 1992 Further Education Reform Act (extending Jarratt’s earlier 1988 Act) abolished the “binary distinction” between universities and polytechnics, driving the latter into competition with the former as a “reward” for their successful compliance with the 1988 Act. Progressively thereafter, ‘competition’ was generated by deliberately increasing financial scarcity as the system was expanded and the unit of resource relentlessly reduced. As Hayward and Finlayson have observed:

“By creating a mass system of education and then neglecting adequately to fund it, successive governments were able to rationalise that part of the sector with the least sense of its own autonomy (the polytechnics) and then place them in direct rivalry with institutions with a more participatory and collegiate, but also conservative and traditional mode of institutional organisation.”

The universities have grown increasingly to resemble the downmarket polytechnics, with sweated resources, cramped conditions, falling academic standards, and browbeaten staff – and all are competing for diminishing resource in a vertiginous race to the bottom. McUniversities started awarding McDegrees for the benefit of corporations offering McJobs, as graduate salaries plummet and ever more are driven to the zero-hours-contract hiring fair.

Scientists and other academics, in order to do their jobs, had to try to find alternative sources of funding for their research, which they were under increasing pressure to procure (often to justify their Principals’ grandiosely bogus ‘strategic plans’ and outrageously inflating salaries as they pretended to be company CEOs). This frequently involves serious bullying – with the desired (and planned) effect of driving academics into the arms of business and commerce.  Business progressively set the terms of engagement, and drove research in directions that suited their constricted, profit-driven, and ever-changing priorities, rather than by the intellectual prerogatives that had made Scottish academic research among the most successful in the world.  By such methods are golden geese slaughtered.

The Outcome

This has had a dismal and utterly devastating effect on both academic institutions, and the long-term viability and vitality of UK research.  EZIP is just one of the late  – indeed inevitable – manifestations of the business hegemony (in the sense first described by Gramsci) that overshadows UK academic endeavour.  But in so many ways it serves as a both metaphor and parable for the pillage of academe by business.  Would it not be ironic indeed that the one country in these islands least in thrall to neoliberal snake oil were to have, in the Scottish Funding Council, its most enthusiastic promoter and protagonist? Is SFC really being run by arch-unionists and do the ‘Scottish’ civil servants that control it, take their primary lead from Whitehall rather than Scottish ministers? Control of the civil service is not devolved.  Can it be that they do their best to out-Brit the mother ship?

Who has Political Control?

But what is most surprising is the apparently wholehearted participation and support of SNP ministers in this process. In my charitable moments I attribute this to an honest, if misguided, desire to create jobs and boost the economy; in darker nights I impute these actions alternately to profound naivety or murky complicity.  The banal likelihood may well be a lazy acceptance of the present neoliberal hegemonic zeitgeist, a lack of imagination and courage, and an unthinking blinkered view of the world through the neoliberal Overton Window.  Who knows? Perhaps the Scottish Government can explain?

The Process and Mechanisms of Academic ‘Primitive Accumulation’

In order to capture the promised bounty of the new commercial bonanza, institutions were ‘encouraged’ (compelled) by government (through funding and research councils’ policies) to set up Technology Transfer Offices (TTOs)  – whose real role was to facilitate the commercial pillage of academic intellectual product.  Once it was realised that, except for a starred (or lucky) few, that there simply was insufficient financial  ‘bounty’ to be had from ‘working with business’ – and certainly nothing like enough to match the shortfall in government funding –  TTOs were renamed Knowledge Transfer (KT) offices, and then finally re-designated Knowledge Exchange (KE) offices when it was realised that KT sounded too uni-directional – and therefore too near the truth.

The new myth of mutually beneficial ‘exchanges of ideas and personnel’ between universities and business was invented to mask the reality of this new round of primitive accumulation (ultimately) by the financial interests for whose benefit all economic and societal activities are now orchestrated by captured governments.

Apart from the parachuting of suitable hand-picked civil servants and ‘captains of industry’ into principals’ chairs to guide recalcitrant institutions along the ‘correct’ path (at this level parachuting is a more apt metaphor than revolving door, since few real businesses seem to want to hire the unrivalled skills of our thrusting mega-high-salaried native university CEO’s; only their hand-picked remuneration committees think they’re ‘worth it’ using your – not their money, naturally); the chief incomers from business to universities were not the industrial geniuses of myth and legend – but rather, drivel-spouting managers, human resources psychopaths and supernumerary accountants from Britain’s dead and dying industries.

Ah yes – the accountants!  The now ubiquitous bean-counters of Scottish universities – hundred of them – traumatised migrants from the Silicon Glen Clearances; the poured-out dregs of distillery mergers and acquisitions by foreign multinationals; refugees from defunct regional councils; ghostly remnants of the lost ship-building, steel and coal industries – accountants now haunt the hallowed halls of once-great universities in their incessant mission to work their accountancy magic (using intrinsically bogus numbers) on academia –  just as they once did on the lost industries of Scotland.

What they did for industry (and they are a large part of what ‘did’ for industry) they are now doing to the universities.  These managerialist legions are nowadays hired to regiment, surveil, intimidate and control increasingly exploited, abused and overworked university staffs.

The new power in the ivory towers (and the concrete carbuncles) is the Director of Finance (DoF).  This creature increasingly controls universities, deciding via pochled spread-sheets which subjects, courses, and professors are ‘viable’ (profitable). Remarkably, in the land of Hume, Smith, Fleming and Clerk-Maxwell, it is DoFs  who increasingly determine the shape, intellectual depth and scope of academic endeavours in Scotland. Usefully, many have never hitherto attended university, and carry no academic, sentimental or intellectual baggage that might interfere with their single-minded sacred mission to cleans universities of the unprofitable, the old-fashioned, and especially the oh so useless, unprofitable Arts and Humanities (with the exception of Media Studies). O tempora, o mores.

Hence the need to propound (or ‘roll out’) the new (‘ground-breaking’) PR claptrap proclaiming (‘cascading’) immemorial myths of the: “Challenges of university and industry engagement” to “ stimulate the flow of ideas and innovation, and conversations between business and researchers” in order to promote a  “deeper and broader relationships with a limited number of universities as a platform to drive the pre-competitive boundary” – get that? Me neither.  But I’m sure we can all get on-message about EZIP’s quality incremental time-phases as the upgraded model now offers ambient transitional processing towards the future sun-lit uplands in homogenised incremental contingencies.

These elements (in quotes above) form the mythology upon which EZIP was built and sold.   The underlying reality is that as genuine commercial deals either disappeared or failed to materialise for most institutions (but not all – not all TTO’s are equal – and some academic activities are more ‘marketable’ than others) new justifications for the burgeoning apparatus of commercial plunder had to be devised –  and giving it away ‘for free’ suited both sides of a nexus with an identity of purpose that dare not speak its name openly or frankly in plain English – especially in front of the dupes that pick up the bills.  Easy Access IP was born.

The Consequences: IP Plunder; Distortion of Academic Purpose; and Moral Hazard

University intellectual property is not ‘free’.  Apart from the (mainly) government grants that generate it, staff salaries are paid largely from public funds.  At a minimum of £50k to obtain a granted patent (triple for Pharma) not including renewal fees, transaction costs of university professionals and academic inventors and legal fees, it’s not a cheap giveaway: up to £500k for each granted patent from scarce University resources.

From the start EZIP, introduced without consultation or supporting evidence, troubled successful well-informed academics, patent attorneys, and IP lawyers, who mostly thought the initiative was wrong-headed, ill-considered, and perverse as between its stated aims, and its likely outcome.   There was absolutely no evidence that giving away free IP would benefit Scottish SME’s, and substantial reason to believe that the main beneficiaries, if any, would be those same multinational chemical, pharmaceutical, defence and other engineering concerns, mostly foreign-owned, that had long been promoting this agenda, making their aims clear at the summit launching EZIP in London in February 2012.

UK technology companies, increasingly including Big Pharma, have a poor recent record of in-house Research and Development (R&D) – that’s one reason why so many of them have disappeared or swallowed up in mergers.  Many have concluded that publicly funded universities can save them the effort – but especially the cost –  of R&D.  Their business models increasingly involve allowing start-ups or SME’s take the risk of developing innovation (usually with substantial public subsidy), and then licensing it from them, or buying up IP-based companies –  with the founding owners cashing out.  They then take manufacturing – and the real jobs –  where it is most profitable (labour arbitrage = cheap labour).  This usually isn’t Scotland, or even the UK.  That way, giant corporations obtain the beneficial rights to IP discovered and developed at UK/Scottish taxpayers’ expense, pocketing the profits and hiring accountants to avoid paying taxes.  EZIP just makes that process easier and cheaper for them.  It is yet another case of public cost; private profit.

The usual description when the risks and costs are borne by the public body, with a giveaway of public assets, and any up-side to private interests, is ‘moral hazard’.

Tunnelling and Trolling

Who decides, and how is it decided, who gets the free IP?  How do you prevent corruption?    EZIP opens the door to widespread abuse through un-policeable deals where publicly-funded IP is given away to mates, lovers, companies, and others where university staff may have covert interests or undeclared deals.  This is a recipe for scams such as tunnelling –  a type of fraud that involves the transfer of assets out of organisations for the benefit of those who control them.  With senior academics increasingly acting as external company directors or technical directors of spin-out and other companies, whilst having internal control or influence over the tech transfer function in their universities, the temptation and opportunity for corruption will inevitably be too strong for some to resist – especially as universities increasingly replace professional ethics with its evil oxymoronic cousin, business ethics.

And then there is patent trolling. This involves a person or company attempting to enforce patent rights against accused infringers far beyond the patent’s actual value.  Patent trolls usually do not manufacture products or supply services based upon the patents in question.  They simply take out, buy  – or now may be given ‘for free’ – patents, which they then use simply to extort money from those who might wish to use these or similar technologies.  Companies pay up to avoid expensive litigation – or abandon the activity all together.  Then no-one benefits from the research – except the trolls.

Interestingly one Scottish SME whose then CEO boasted about actively lobbying the Scottish Government and SFC on EZIP, stated on its website that its business strategy was to “secure as much patent space as possible to protect hundreds of thousands of synthetic (chemical) structures”.  Could a cheap and ‘easy’ way to do this be to obtain free rights on such compounds from Scottish Universities under Easy Access thus adding to the business “estate” of a company whose publicly stated business model was as stated above?

An exclusive licence to a patent owned by (e.g.) a Scottish University would have a similar effect.  The company concerned needn’t trouble itself making anything (this particular one doesn’t –its business address is a leafy Edinburgh suburb and its accounts show no major activity –  nor does it apparently employ any staff.  It need only seek to extract rents from anyone world-wide who tries to do something useful with ‘its’ patent.  As well as being morally questionable, it is difficult to see how this serves the stated purpose of the minister in driving SME’s to boost Scotland’s  economy – except at the margins occupied by the owners and directors of such companies – and boosting house prices in Labour’s last Scottish redoubt in Red Morningside.  Even if a mixed blessing, at least a proper market in University IP tends to ensure that a market rate is paid for public assets.

Untouchable for Oxbridge: Commercial Acumen; Moral Hazard and the Golden Triangle

Before 2011, Easy Access IP had failed to win voluntary support in all but a handful of UK Universities. By then, only four of the elite Russell Group’s 24 research-intensive universities had voluntarily joined up; the remaining two UK voluntary members were not research-led.  Of four international signed-up universities at that time, none was a leading institution, one was a third division Australian university –  and tellingly, none was or is in the United States where they know about exploiting university-generated IP.  Partly this is because Easy Access breaches the Terms and Conditions of US Federal research funding, specifically prohibiting recipients of research tax-dollars from just ‘giving away’ IP (see above).  Breach of these terms, could also affect Scottish institutions receiving US funding and partnering with US institutions, leading to ‘non-compliance’ for Federal funding.  This could significantly adversely affect research in Scotland’s world-class institutions, especially in leading medical schools, including those of the UK founders of EZIP, and would be a high academic price to pay for any imagined economic benefit to local SMEs.

A mainstream critique of the whole misguided project was published in Isis, the house magazine of ISIS Innovation (since renamed for obvious reasons), the University of Oxford’s highly successful tech transfer company. Isis, the authentic voice of the Golden Triangle in lobbying mode said:

“The idea of universities giving away their intellectual property is not new, they have been doing it for hundreds of years…..What is new is the idea of universities investing in technology transfer offices which invest in protecting technologies with the intent of giving away the IP in the technologies.” 

As they point out:

“The canny commercial company may use the Easy Access IP initiative in two ways (1) wait for projects to appear on the free list and (2) challenge the university TTO’s motivations in having something on the Commercial list if they want to use it, given the existence of the free list. What are their motivations; how do they decide?”

How indeed?  This takes us back to the moral hazard intrinsic to the scheme.

Time to Rethink Scotland’s High Tech Business Strategy?

Sadly, the intellectual product of our world-class higher education sector is largely out of the league of Scottish business.  Unless and until the calibre of business and business ‘leaders’ in Scotland improves substantially, that will remain the case. It is a perverse fact of neoliberal hegemony that the systems, methods and ethos of one of the least internationally successful areas of Scottish life are being imposed on its world-class universities.  In the meantime, projects like Easy Access could help reduce Scottish universities to the calibre of Scottish business – all the more perilous as we approach the second, and hopefully successful, independence vote.

There needs to be an urgent rethink about the shape, ownership and processes of how we support and gain social benefit from the undoubted gifts and genius in our Scottish universities.  A good start would be to return to the precepts and principles of Scotland’s Democratic Intellect