Pure Knowledge vs. Pure Profit

For universities, corporate research grants are a mixed blessing

Doctor Joseph Davie was caught in a dilemma. Davie, head of the microbiology and immunology department at Washington University's School of Medicine in St. Louis, was coordinating a joint effort among 15 university laboratories to create hybridomas, cells that produce the protein antibodies that attack viruses and bacteria. He wanted to be sure that any discoveries made in the labs could swiftly be applied in practical medicine. He also hoped to find more money so the project could continue its basic research.

Davie got in touch with Mallinckrodt Inc., a St. Louis medical supply company also engaged in hybridoma research. The result: a $3.8 million three-year agreement in which Washington University gets funding for research and Mallinckrodt gets copies of all resulting scientific papers--before their publication. If any discoveries are commercially viable, the university will hold the patent and receive royalties; Mallinckrodt will have an exclusive license to market the product. Says Mallinckrodt President Raymond Bentele: "The agreement allows the university to do what it does best--that is, basic research&3151;and it allows us to do what we do best, develop usable products."

In an era of cutbacks in federal grants to education, universities are increasingly being forced to turn to industry for help, and companies are increasingly coming through with money. Although corporate funds still account for only 6% of the nearly $3 billion spent annually on basic university research, contributions have risen dramatically this year, especially in contract grants that demand something in return. At the Massachusetts Institute of Technology, private help has jumped from $6 million in 1979 to $18 million this year. At M.I.T. Exxon is financing an $8 million project on combustion research. Harvard Medical School has announced a $6 million grant from Du Pont for genetic research. Carnegie-Mellon University in Pittsburgh has signed a $5 million contract with Westinghouse to fund the Robotics Institute, granting Westinghouse first patent rights on any research findings. Dartmouth College receives $75,000 a year from DePuy, a medical manufacturer, to develop prosthetic hip replacements. Columbia University has hired a director of corporate relations just to woo more corporate aid.

Can the pursuit of pure knowledge be compatible with the pursuit of profit? Some observers are skeptical. Corporate funding provides a boost to research and is relatively free of the red tape that often entangles Government grants. Yet one ideal of a university, however fitfully adhered to, is the sharing of information. Most contract grants between business and universities allow the donor corporation to review findings before publication, ensure exclusive patent rights and sometimes keep key data secret so competitors will not get them. While many technological breakthroughs have resulted from purely theoretical research, corporations tend to be more interested in encouraging short-term solutions to specific problems or in developing products. Concedes Wilbert Ferguson, a Westinghouse engineering director, discussing his firm's arrangement with Carnegie-Mellon: "There may be an element of support for academic research, but we really are trying to get as much out of it as we can."

Rich and prestigious institutions like Cal Tech, Harvard, M.I.T. and Stanford are able to dictate strong terms, including university control of patents and freedom to publish all research; the donor company usually just gets first bid on licensing. Says James Lewis, director of projects and grants at Columbia: "We want no publishing restrictions, no undue influence on courses and research, and no classified or secret research." But many universities accede to less favorable agreements. At Texas A & M, which gets 35% of its $30 million research budget from corporations, W. Arthur Porter, director of the Texas Engineering Experiment Station, acknowledges, "We're tied to delivering results."

Earlier this month, faculty members at Stanford and the University of California at Berkeley introduced an ingenious corporate structure to regulate funding and profits with less danger of compromising research priorities. They created a nonprofit Center for Biotechnology Research and have already raised $2.4 million from six major corporations, including General Foods and Bendix, to fund research. If the research develops into fruitful ventures, profits will come under the jurisdiction of a separate company called Engenics. Since the center owns 30% equity in Engenics, those profits will enable the center to aid university research, no strings attached. Says Harvey Blanch, U.C. professor of chemical engineering and a founder of Engenics: "I think this type of arrangement is a first." With Government grants decreasing and inflation pressing, it is not likely to be a last.--

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