Oil Watchdog

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.