Post details: A Faustian Bargain for Academia?

A Faustian Bargain for Academia?

Posted by Jay on October 12th, 2006

"When you’re working with the ultimate driving machine, you have to keep on your toes," said James F. Barker, President of Clemson University, as quoted in the New York Times a few weeks ago.

Having forged an alliance with BMW a few years ago to build an International Center for Automotive Research, Clemson has much to look forward to. After all, BMW has already contributed $10 million towards the building of a $1.5 billion center devoted to automobile research and education.

But there are some strings attached.

BMW wanted approval rights over the school’s architectural look, it provided Clemson with profiles of its ideal students, and it gave Clemson a list of professors and specialists that it considered suitable. BMW meets monthly to provide guidance on the curriculum in this graduate engineering program, and it reviews student papers to make sure that proprietary information does not get submitted for publication.


All of this is perhaps to be expected when the private sector provides funding to universities. But these alliances between the private sector and universities have not always gone well.

Readers of this blog might remember the Novartis-University of California, Berkeley deal from several years ago which was not renewed by Novartis when the general economic climate took a downturn. Long-term R & D is a high risk proposition and the rewards are not amenable to quick evaluations based on the last quarter’s performance.

In addition, the incentives and objectives of university faculty and graduate students are not naturally well-aligned with those of the private sector. When universities pursue intellectual property (IP) rights and act like any other player in the marketplace, they sometimes discover that IP can both help and hurt. If you produce technology and choose to protect it, as a producer of IP, you will benefit, but the same IP regimes can be a burden when universities, acting as consumers, try to get access to someone else’s cutting-edge technology that is protected by IP rights.

And then litigation is not far behind: think of Madey v. Duke and Fenn v. Yale. In the Clemson-BMW venture, a Florida developer, Clifford D. Rosen, is claiming that the BMW and Clemson have joined forces and pushed him out of a deal that he previously had with Clemson to build a top-notch center focused on the motor sports industry.

At minimum, it takes long-term thinking, flexibility, and some foresight from both sides to make these deals between universities and the private sector turn into successes.

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