Berkeley’s Pact With BP for Research Institute Gives Company Favorable Terms on Intellectual Property

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The Chronicle of Higher Education

The University of California at Berkeley and its two academic partners have signed the much-anticipated and controversial contract with the energy giant BP for the new $500-million Energy Biosciences Institute. Some of the intellectual-property terms of the research sponsorship, which favor BP, appear to be unusual for a university-industry deal.

As part of the 10-year deal, which was signed and made public on Wednesday, scientists from BP will collaborate with academics from Berkeley, Lawrence Berkeley National Laboratory, and the University of Illinois at Urbana-Champaign on research related to biofuels and other alternative-energy sources. Researchers at other institutions will also take part.

Nearly a third of the expected $50-million a year that BP will provide for the institute, known as EBI, will be designated for confidential research in laboratory space rented from Berkeley or Illinois. As outlined in a summary of the deal, such research will be conducted solely by BP employees, consultants, and agents, and the products of that research will be owned by BP. “To facilitate advancement of the EBI mission through strategic interaction, proprietary labs will be situated adjacent to open, academic labs,” the summary says.

The contract also assures BP rights to negotiate for exclusive licenses on research results from the “public” part of the venture, without having to spend more than $100,000 a year in royalties per license, although in “exceptional cases” involving breakthrough technologies, the licensing fee could be higher.

While many university-industry deals have similar provisions giving research sponsors the first shot at negotiating for exclusive rights to intellectual-property produced from the research they helped finance,
experts say offering a company a cap on that fee is unusual, and not necessarily prudent.

“Universities have been so eager to enter into business deals with industry, they will do quite stupid things,” said Daniel S. Greenberg, author of Science for Sale: The Perils, Rewards, and Delusions of Campus Capitalism (University of Chicago Press, 2007).

Carol Mimura, assistant vice chancellor for intellectual property and industry research alliances at Berkeley, said on Wednesday that it was “not so unusual” for Berkeley to agree in advance to a deal that provided a range of fees for exclusive licenses, although she acknowledged that a deal involving a “static” cap is “very unusual.”

Ms. Mimura said that before agreeing to the cap, Berkeley looked at the portfolio of UC’s patents and found that only slightly more than 4 percent of them earned more than $100,000 per year. Given that, “we thought that it would not be an unreasonable cap,” she said.

First announced in February (The Chronicle, February 16), the deal was criticized even before final details of the relationship became public. Faculty members and students from Berkeley, as well as consumer and environmental groups, have questioned whether the biofuels institute will be too influenced by BP‘s corporate agenda (The Chronicle, April 5).

One of those groups, the Foundation for Taxpayer and Consumer Rights, reiterated that criticism on Wednesday in a blistering news release that called the deal a sellout of the university’s values and an insult to the California Board of Regents and the public. Because four of the eight seats on the governing board will be controlled by BP, the company can block proposed research from going forward, the foundation said in its release.

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