The World Is At The DoorThe World Is At The Door

Worth The Trouble?
The haggling may not be worth it. Unlike fields such as biotech pharmaceuticals, where researchers and universities have reaped windfalls, patents from the kind of IT research performed at most universities don't produce much revenue. "It's not a profit center by any stretch of the imagination," says Jilda Garton, associate provost for research at the Georgia Institute of Technology.

To try to resolve some of the intellectual-property barriers to working with U.S. universities, IBM and the Ewing Marion Kauffman Foundation last summer co-sponsored a summit between U.S. IT vendors and American universities. "The concern is that we're outsourcing our knowledge economy," says Lesa Mitchell, VP for advancing innovation at the Kauffman Foundation, which focuses on advancing innovation and entrepreneurship.

The result was a set of principles endorsed last month by Cisco, HP, IBM, and Intel along with Carnegie Mellon University, Georgia Tech, Rensselaer Polytechnic Institute, Stanford University, and the universities of California, Illinois, and Texas. It says the results from collaborative research on open-source software would be free for commercial and academic use.

While it covers a limited area of research, backers believe the framework will hasten IT product development. "Universities are concerned about the role we can continue to play if we're not competitive in terms of the ability to reach agreements in a timely fashion," says Bud Peterson, provost at Rensselaer. "And the industries are concerned about that fundamental research leaving the United States and being done elsewhere."

That's an important point to IBM, which spends roughly $50 million funding university projects worldwide, mostly in research and development. "U.S. IT companies really do want to work with the powerful, 'research-one' universities in the United States," Masi says.

Let Knowledge Go
The stumbling block isn't always royalties. Vendor lawyers often don't want university researchers to share the knowledge from industry-backed research in academic journals and forums. That conflicts with universities' spread-the-knowledge mission--and academics' publish-or-perish career paths. "We really have to preserve the right--and every university does--for faculty members to use intellectual property in future research and education," Garton says.

The agreement between the vendors and the universities comes at a time when university research has become more important to IT vendors. As companies cut basic research in favor of applied research, they turn to academics for that fundamental exploration. By one estimate, 70% of university research is basic. And it matters a lot to the schools: At Rensselaer, about 30% of its R&D budget--some $14.5 million--comes from nongovernment sources. (The U.S. government, in particular the Defense Department, remains by far the largest sponsor of universities' IT research.)

The open collaboration principles only cover one type of academic research. Vendors still hire university researchers to conduct applied research, with the companies keeping the intellectual-property rights.

Even with the agreement, there will be times when it makes sense to fund IT research projects at overseas universities. When Cisco looked to conduct research on the renumbering of addresses for Internet Protocol version 6, the next generation of the Internet, it turned to researchers at the University of Manchester in the United Kingdom because company officials believed there was a higher interest in the subject in Europe than the United States. "We weren't looking to go to the U.K. because intellectual-property issues here were too difficult," Holmes says. "The driving factor for us is what we expect to see come out of the research and the ability of that [researcher] to deliver on that particular project."

That example shows how, far from having a lock on grants from U.S. IT vendors, in some cases, U.S. universities are at a disadvantage. The United States isn't the cutting-edge market for some IT arenas. IT vendors are eager to invest in growth markets. And the intellectual-property environment can be unfriendly. But some U.S. universities are taking the threat of global competition seriously and knocking down obstacles to doing business with them. How well they learn the lesson is one factor in whether the United States remains a leader in the knowledge-based IT economy.