Challenges and Opportunities for Innovation in the Public Works ...

without evaluating the exposures that may arise.
The models examined are ownership of rights and control of commercialization by
investigators; licensing of discoveries by the agency or institution, either directly or
through a third party; and organization involvement in the commercialization of the
discovery, either directly or through intermediaries such as joint ventures or spin-off
entities.
A. Ownership and Control of Commercialization by the Investigator.
The simplest, although for most agencies and institutions no longer the best, way
to deal with the commercialization of discoveries is to treat them in the same fashion as
the authoring of books and articles. Among educational institutions, it is common that the
institution does not retain any residual rights in the work and does not receive any direct
benefit from its publication, except where the authoring involved a very specialized use
of institutional resources.
Some institutions continue to treat all intellectual property created by their faculty
as undifferentiated, even without regard to the locus of the work out of which the
discovery may have arisen. A faculty member who creates a new superconductor in his
or her laboratory at the institution stands in the same position relative to the ownership
of that discovery as one who writes a new textbook: both are free to sell all or some of
the rights their work, in the latter case through publication and the former through
production, most often under a licensing agreement.
Under such an arrangement, there is no oversight by the institution respecting the
manner through which the investigator seeks and obtains commercialization of his or her
discovery, and often no restrictions on the manner or degree to which he or she may be
personally involved in that process.
This approach has the positive attributes of requiring a minimum of institutional
involvement, and therefore virtually no overhead investment, as well as affording the
investigators the utmost freedom in the management of their affairs, including their ability
to profit from their efforts. However, the absence of institutional involvement is a doubleedged
sword. First, regardless of the niceties of academia, a an investigator is an
employee of the institution, and work done by such an employee on the employer's time
(that is, while being compensated by the institutior' and while using the facilities of the
institution is work for the institution. While under pi -vailing intellectual property law, the
creator of a work (whether a writing or an invention) "owns" the work, the fact that the
discovery was made by its paid employee on its premises under its overall supervision
inextricably links the institution, as a legal entity, to the resulting product. Even though an
institution may allow a faculty member free rein to commercialize his or her discovery, that
does not necessarily relieve it of potential liability, although in some instances it might.
Thus, such an exercise of rights does not absolve the institution from responsibility
respecting the effects of the discovery on third parties. Of course, the institution and the
faculty member may agree that the faculty member will, as a condition of receiving all
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