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

ights to the discovery, indemnify the institution from any liability arising out of its
commercialization. However, if, as is probable, the faculty member lacks the wherewithal
to satisfy the claim of the injured party, the institution still may stand directly at risk.
Second, such an arrangement leaves with each faculty member the total
responsibility for negotiating the commercialization of his or her discovery. For a very few,
this is a reasonable burden. For most, however, the costs of acquiring adequate
protection, let alone obtaining qualified professional advice, is more than can be
reasonably expected. Whether the faculty member attempts to handle negotiations on his
or her own, engages an agent who negotiates for him or her for a fee or in return for a
share of the value, or enters into an agreement with a commercial entity for it to handle
commercialization, the interests of the institution are simply not on the table. While the
totally open playing field would seem to allow for the widest possible range of commercialization
strategies, in fact the exclusion of the institution from the equation denies the
process an important and effective player.
Third, the institution is denied any benefit from the discovery, particularly its value
in capital formation, even though it may have invested substantial resources in making it
possible.
The attributes of this approach are as follows:
Value for capital formation: Nil.
Commercialization flexibility: High, but potentially limited by a lack of tangible
resources on the part of the resources.
Benefit to the institution: Nil, except for possible sponsored research indirect cost
recovery.
Benefit to the investigator: Potentially very high in comparison to other alternatives,
but in practice aries from very low to very high. In large measure dependent upon
negotiating skill of investigator and nature of transaction.
Administrative burden: Very low.
Institutional risk control: Very low.
Institutional exposure to fiduciary liability: Probably low.
Institutional exposure to product liability: Varies, but could be very high.
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