4 ms·

I don't know anything about the merits of this case, but there is something disquieting about a taxpayer financed non-profit entity, supposedly pursuing truth i

I don't know anything about the merits of this case, but there is something disquieting about a taxpayer financed non-profit entity, supposedly pursuing truth in a disinterested way, doing this. If CMU wants the freedom to pursue its self-interest, it should not be accorded any special taxpayer funding and be stripped of its non-profit status. You cannot have it both ways. Next time a venture capitalist tries to talk me into taking venture capital because "our funds come from University endowments" - it is sacred money because you know it is sprinkled with the holy water of "education" - I know what I would say. CMU should be at liberty to pursue its self-interest. Let's just not allow it to claim a sacred disinterested pursuit of knowledge. Let me disclose my bias here. I have come to believe that the University system as it exists today is not true to its original mission. This case serves to reinforce my bias.

jamesaguilar 14y ago
CMU is privately funded.
- jcdavis 14y ago
  Its a private university, but they (like most research universities in the US) get a lot of federal research funding. As an alum, no idea what to thing about this ruling.
  - jamesaguilar 14y ago
    Personally, I'm a bit mixed. On the one hand, information wants to be free, blah blah. But on the other hand, if they really BASED the idea off what CMU did without compensating them, doesn't that mean the private industry is profiting off public work without compensating the public for it?
rayiner 14y ago
You're missing the fact that the university is not profiting here. This money doesn't go into shareholder pockets, it goes back into the university to support further research activities, reducing the need for government subsidy. This isn't a debate about whether universities should pursue their self-interest, but rather about how R&D costs for fundamental research are allocated among the government and industry. The fact that universities are publicly subsidized does not mean that Marvell should get to use the technology they develop for free. My tax dollars pay for the NYC subway system, but I still have to pay a fare to take a ride. Indeed, there is a very strong argument in favor of "charging fare" to companies that use publicly-funded technology. The university system is a huge subsidy to companies, particularly technology companies,* that benefit from the free R&D and free training of high-skill engineering workers. Requiring those companies to pay for access to that technology reduces the amount of government subsidy necessary to support the same level of R&D activity. *) Next time a Microsoft or Google publicly complains about the "shortage of engineers" and how the U.S. needs to educate more people in STEM, realize that they are literally asking for an increase in the subsidization of their labor costs.
- _dps 14y ago
  > This money doesn't go into shareholder pockets, it goes back into the university to support further research activities, reducing the need for government subsidy. This is a reasonable intuitive expectation, but it's simply not the case in reality (former academic from an academic family here). The vast majority of research, including graduate student stipends and professors' summer salaries, comes from sources outside the university's budget (this is complicated for the first few years of a professor's career during which they usually get "start up" funds from the departmental budget before they get their first external grant, but it is true over the long haul). A professor can almost never go to the university and say "I'm doing great research. You just made $X million from patents, so give me money to continue my work." In fact, nearly the reverse is true; when the professor finds outside funding, the university takes a cut. So, if Professor X gets $100k from the NSF to study mole rats, the university will claim as much as $50k of that grant and put it into the university's general fund. Now you might say, "Hey _dps that's fine first-order thinking, but if a university gets enough patent royalties they can reduce their demanded overhead percentage." In practice, overhead percentage at the best universities are set not by budgetary need but instead are set indirectly by the funding agencies themselves (e.g. the NSF has limits on overhead charges that institutions take very seriously in setting their internal schedules). The reason for this is that the academic employment market is extremely illiquid because transferring your entire research program from one school to another is a huge hassle; thus professors have comparatively little negotiating power in setting the university's overhead policies. Having said all that, it's not clear that there's an obviously better system. I recognize the need to cross-subsidize university activities that aren't easy to fund externally. But it's important to remember that universities, in practice, make profits just like corporations. It's just that the profits go back into the endowment, capital expenditures like new buildings (though rarely capital expenditures like new research equipment), or at some institutions, administrator bloat. These profits are almost never directly pushed into new research, or used to reduce grant overhead rates.

jamesaguilar 14y ago

CMU is privately funded.

jcdavis 14y ago
Its a private university, but they (like most research universities in the US) get a lot of federal research funding. As an alum, no idea what to thing about this ruling.
- jamesaguilar 14y ago
  Personally, I'm a bit mixed. On the one hand, information wants to be free, blah blah. But on the other hand, if they really BASED the idea off what CMU did without compensating them, doesn't that mean the private industry is profiting off public work without compensating the public for it?

rayiner 14y ago

You're missing the fact that the university is not profiting here. This money doesn't go into shareholder pockets, it goes back into the university to support further research activities, reducing the need for government subsidy. This isn't a debate about whether universities should pursue their self-interest, but rather about how R&D costs for fundamental research are allocated among the government and industry. The fact that universities are publicly subsidized does not mean that Marvell should get to use the technology they develop for free. My tax dollars pay for the NYC subway system, but I still have to pay a fare to take a ride. Indeed, there is a very strong argument in favor of "charging fare" to companies that use publicly-funded technology. The university system is a huge subsidy to companies, particularly technology companies,* that benefit from the free R&D and free training of high-skill engineering workers. Requiring those companies to pay for access to that technology reduces the amount of government subsidy necessary to support the same level of R&D activity. *) Next time a Microsoft or Google publicly complains about the "shortage of engineers" and how the U.S. needs to educate more people in STEM, realize that they are literally asking for an increase in the subsidization of their labor costs.

_dps 14y ago
> This money doesn't go into shareholder pockets, it goes back into the university to support further research activities, reducing the need for government subsidy. This is a reasonable intuitive expectation, but it's simply not the case in reality (former academic from an academic family here). The vast majority of research, including graduate student stipends and professors' summer salaries, comes from sources outside the university's budget (this is complicated for the first few years of a professor's career during which they usually get "start up" funds from the departmental budget before they get their first external grant, but it is true over the long haul). A professor can almost never go to the university and say "I'm doing great research. You just made $X million from patents, so give me money to continue my work." In fact, nearly the reverse is true; when the professor finds outside funding, the university takes a cut. So, if Professor X gets $100k from the NSF to study mole rats, the university will claim as much as $50k of that grant and put it into the university's general fund. Now you might say, "Hey _dps that's fine first-order thinking, but if a university gets enough patent royalties they can reduce their demanded overhead percentage." In practice, overhead percentage at the best universities are set not by budgetary need but instead are set indirectly by the funding agencies themselves (e.g. the NSF has limits on overhead charges that institutions take very seriously in setting their internal schedules). The reason for this is that the academic employment market is extremely illiquid because transferring your entire research program from one school to another is a huge hassle; thus professors have comparatively little negotiating power in setting the university's overhead policies. Having said all that, it's not clear that there's an obviously better system. I recognize the need to cross-subsidize university activities that aren't easy to fund externally. But it's important to remember that universities, in practice, make profits just like corporations. It's just that the profits go back into the endowment, capital expenditures like new buildings (though rarely capital expenditures like new research equipment), or at some institutions, administrator bloat. These profits are almost never directly pushed into new research, or used to reduce grant overhead rates.