Academic Freedom Under Siege: Intellectual Property at Risk

Authored by Babak Akhlaghi on April 25, 2025. Federal funding has played a critical role in advancing academic innovations since the mid-20th century. This relationship was further cemented in 1980 with the Bayh-Dole Act, which allowed universities to retain ownership of their federally funded inventions. This landmark legislation enabled institutions to commercialize their patented innovations and begin collaborations and partnerships with industry. But now this foundation is cracking before our eyes.

The confrontation between Harvard and the Trump administration is significant from an intellectual property standpoint because it threatens to reduce the ability of many universities who rely on governmental funding to protect their innovations. This will trigger multiple negative outcomes that extend far beyond a single institution.

When Funding Becomes a Political Weapon

Government can certainly set conditions for providing funding to academic institutions. However, these conditions must be related to the purpose of the funding and cannot violate constitutional rights. If the funding is for research in a specific technological field, for example, the government can put limits to ensure the funding is being spent in that direction. Similarly, funding can be tied to protecting and promoting civil rights such as prohibiting discrimination based on race, color, or national origin.

We must be mindful, however, that these conditions cannot violate constitutional rights such as free speech, freedom of press, freedom of peaceful assembly, or freedom of religion. As soon as we use federal funding as a means to violate any of these fundamental rights, we start going down a slippery slope. Today, it may be freedom of press or free speech. What about tomorrow? Can we withhold governmental funding from schools to prohibit or promote exercise of a specific religion? Where do we draw the line?

We have all been granted some fundamental rights and principles by our constitution which must be upheld no matter the political climate.

The Ripple Effect on Research and Innovation

A lot of research at universities is tied to governmental funding. Withdrawing or withholding these funds will have ripple effect. First, it will result in important research being halted and the intellectual property they would generate not seeing the light of day. Second, even if such research is funded, the very IP they create may not be protected due to budget limitations, which could result in loss of revenue for universities. Third, it may result in brain drain from our country.

We may see researchers leave their posts to take positions at universities outside of the country to fund their research, which would further accelerate this brain drain. We could see universities turn to foreign governments for funding, which may result in foreign governments owning the IP generated by the research. Either way you look at it, withholding governmental funding won’t be good from an innovation standpoint. It will work against our interest to remain a technological powerhouse.

Global Competition for American Talent

Nations like Germany, Switzerland, Singapore, and China are increasingly investing in infrastructure and grants designed to attract talent. They will be well positioned to attract brilliant minds from the US whose funding has been cut or altogether eliminated. If funding instability continues, the global landscape of academic research and IP ownership may shift toward these countries, helping them advance technologically ahead of the US.

Our country has been very effective up until now in attracting the brightest scientists from across the world. We have some of the best universities, some of the best technologies, and certainly the best startup ecosystems for establishing new companies. However, lack of funding may adversely affect this advantage we’ve built over decades.

Beyond Harvard: A Broader Pattern

I don’t believe this is an isolated case. Harvard has dominated the headlines because it is among the few universities which has outright rejected the administration’s demands. Institutions like Princeton, Cornell, and Northwestern have also faced funding freezes or investigations. While some universities have expressed solidarity with Harvard, others are navigating their own negotiations or legal challenges.

Columbia, for example, started negotiating with the administration when $400 million of its funding was frozen. Many other universities have had their funding substantially reduced as the government tries to curb expenses. Regardless of how the battle between Harvard and the administration plays out in court, this should be a reminder to university leaders that there are no constitutional requirements or laws that mandate government to provide funding to them.

Strategic Preparation for a New Reality

Universities and research institutions should prepare themselves strategically to become less dependent on federal funding. Like any business, the survival of these universities depends on diversification. I know firsthand how important diversification is. As a former partner of a large international firm and an entrepreneur, I know you never want to put all your eggs in one basket; otherwise, you risk losing your business.

The idea would be that any single source of revenue for your organization should not reach double digits as a percentage of total funding. This holds true for universities as well. One area they should focus on is increasing their funding from the very IP they generate.

I have worked with well-established universities and I know they have great IP portfolios. Some of these universities are doing a fantastic job in monetizing them by partnering with industries. I believe universities can do more. The tech transfer offices at these universities need to modernize their IP monetization systems.

Modernizing IP Monetization

One of the key challenges in traditional IP frameworks is the difficulty of monetizing intangible assets. For universities, this can be particularly daunting given the abstract nature of IP and the fact that seasoned individuals at universities are not sales people like in startups. How do you effectively commercialize something you can’t see or touch? Yet, IP often represents some of the most valuable assets universities develop through research and innovation.

Without clear pathways to monetize these assets, universities may struggle to translate groundbreaking inventions into broader societal and financial benefits. I was reading recently an article suggesting that most universities actually lose money on their patent portfolios, meaning the cost of patenting their innovations exceeds the money generated. If this study is indeed true, then something is wrong, and I believe it’s the outdated monetization system.

Even with robust IP protection, the process of securing funding to translate academic research into market-ready innovations remains a hurdle. Start-ups launched from university research often possess valuable IP portfolios tied to their core technologies. However, in today’s competitive and resource-constrained funding climate, they frequently find raising capital to be a prolonged and costly endeavor.

One main reason is that academic inventors, like their industry counterparts, often face challenges in accurately valuing their patents or other IP assets. This uncertainty makes attracting investment even harder. Additionally, outdated funding structures exacerbate the issue. Researchers and their spin-offs may spend months negotiating agreements with corporate partners, venture capitalists, or other stakeholders. This lengthy process often involves high legal costs and, ultimately, results in giving up significant equity or control, leaving less room and resources to advance their innovations.

Tokenizing IP: A Forward-Thinking Solution

Tokenizing IP presents an exciting and forward-thinking solution for universities to reshape how they monetize their intellectual property. Universities could tokenize patents, converting them into digital assets on a blockchain. Each token could represent fractional ownership of future revenue from licensing agreements or enforcement of the patents.

By leveraging smart contracts, these tokenized patents can automate royalty distribution, ensuring fair and efficient sharing of revenues. Investors or stakeholders could then purchase tokens to secure a stake in the potential commercialization success of specific university technologies without directly involving themselves in complex licensing negotiations. This approach allows universities to attract funding, ensuring that their innovations directly benefit both researchers and the academic institution.

Tokenization could streamline the technology commercialization process, reduce financial barriers for early-stage projects, and create new, flexible ways for universities to derive value from their IP portfolios. By modernizing their approach to IP monetization, tech transfer offices can bolster innovation, promote investment, and strengthen the long-term impact of academic research on both society and the economy.

Alternative Funding Models

Strategic partnerships with industry, joint research agreements, and international collaborations can be great additional sources of funding. These are excellent mechanisms for advancing innovations both for industries and universities. They can bring brilliant minds from inside and outside the universities together, utilize state-of-the-art equipment either at the university or in their industry counterpart, and naturally minimize expenses.

It would also be prudent for universities to start diversifying their sources of revenue and minimizing their expenses. I have been visiting some of these universities, and the amenities being provided for students are mind-blowing: state-of-the-art gyms, dining areas, and sometimes you feel like you are in a resort. This was not the case 20 some years ago when I was going to school. Perhaps it’s time to cut back on some of these unnecessary expenses.

Standing by Principles While Adapting

If I were advising a university president today, I would offer three key recommendations. First, don’t compromise on your principles. Gandhi used to say “Even if you are a minority of one, the truth is the truth.” If you strongly believe in your principles, stand by them; otherwise, you face a threat of becoming an existential vacuum without any values.

Second, immediately seek diversification of sources of revenue, whether by pursuing strategic partnerships or joint ventures. Third, do a better job in monetizing your IP. Spend money to strengthen your tech transfer offices and modernize your IP monetization strategies.

The relationship between universities and government is rapidly shifting before our eyes. If universities want to maintain their academic independence, they will have to become less reliant on governmental funding; otherwise, they risk losing the very independence they desire.

Looking Forward

I believe this tension between government funding and academic freedom will negatively impact America’s position in global innovation because we will see important research being delayed or completely abandoned due to lack of funding. We will see brilliant minds leaving the country for other countries which are actively providing grants and infrastructure to attract them, and I think our universities’ rankings across the globe will suffer.

Yet I remain optimistic. I believe these challenges will force universities to diversify funding sources, reduce reliance on federal dollars, and innovate in research funding models. I also believe our government will continue to fund these universities to maintain its global standing in the world. However, this is a good reminder that such funding is merely a gift that can be taken away at any time. So, it is important not to be dependent on it.

The broader societal costs associated with political agendas interfering with knowledge creation will ultimately affect researchers and the nature of their research. But with strategic adaptation and principled leadership, our academic institutions can navigate these challenging waters while protecting both their intellectual property and their fundamental mission.

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