Apparently Stanford University thinks they do. And if they succeed in a court case to be argued at the Supreme Court on Monday their approach to faculty inventions would be a reversal of nearly a century of protections of faculty academic freedom.

The case (Stanford v. Roche) involves an interpretation of the Bayh-Dole Act which was passed in 1980 to encourage the commercialization of research funded by the federal government. Congress granted universities who receive federal research money the right to commercialize new technology through the licensing of patents to which they have proper title. Stanford maintains the Act gives them, automatically, full title to faculty inventions.

Typically, when hired faculty assign their rights, in writing, to inventions to their university in return for a division of any royalty revenue the invention might generate if licensed to the private sector for commercial purposes. For some universities, particularly Stanford and U.C. Berkeley, this has been a very lucrative arrangement. Companies like Genentech and Google have generated billions of dollars of licensing revenue back to those universities and to their faculty inventors for use of those original inventions.

Since the federal government did not think they were very good at that process of spinning off intellectual property they allowed universities to step into their shoes when inventions emerged from federally funded research on university campuses. But that grant of any rights the federal government may have had was not meant to take away the right of faculty to their own inventions much less to any revenue stream those inventions might generate.

If Stanford’s view of the world were to prevail it would reduce the status of faculty, who hold appointments, into mere employees engaged to do “work for hire” that belongs to the university. In other words, the university would cease to be a university, it would become no different than a private sector corporation. This would of course destroy the unique incentives and culture found at a university that lead to pathbreaking innovation in the first place.

An amicus brief defending the rights of faculty has been filed by the AAUP (of which I am a member), the IEEE-US and IP Advocate. The American Intellectual Property Law Association has also filed an amicus brief that makes a parallel argument.

So what is it about HP these days? It’s top management is looking more like a home for executives who fail elsewhere.

Since when did the foundational Silicon Valley firm become a way station to retirement?

The new CEO, Leo Apotheker, was fired from SAP after 8 months as its CEO. The new Chairman, Ray Lane, was fired as President of Oracle. And three of the newest board members failed at their last gigs: Meg Whitman was trounced by a 70 year old in the governors’ race and some believe her last few years at E-Bay were nothing to brag about, Patricia Russo was pushed out in a shareholders revolt at Alcatel/Lucent, and in circumstances that are not clear Gary Reiner left GE as its Chief Information Officer after a long career there.

If one is looking for a logical explanation for the new board members, it is striking that two have long time consulting backgrounds and two have strong connections to private equity groups. This suggests that the real plan is to break up the company – since there is no word from Apotheker, a software salesman, about how he intends to run a hardware company, perhaps this is the real explanation – he isn’t going to run a hardware company. He is going to break it up and sell it off and use the cash to build a new business. I made that point in the Mercury News coverage this afternoon here.

H-P Shakes Up Board of Directors – WSJ.com.

The UAW is starting out contract talks with the Big 3 auto companies in a defensive and paradoxical position. The employers are pushing for a link between pay and productivity and quality as this Wall Street Journal story notes. Of course, most assembly line workers have little serious influence on these goals given the heavily engineered modern assembly plant.

But all collective bargaining is as much political as it is economic. Public sympathy for industrial unions is at an all time low, even inside the labor movement itself where concern with immigrant rights and keeping a tenuous grasp on political influence takes up more time.

And greatly complicating the situation is that the UAW run healthcare retiree trust sacrificed economic independence and now owns a big equity position in Chrysler and GM. Thus the union, for the first time in its history, is really on both sides of the bargaining table. That is an untenable position.

And it does not help that so much of the rest of the labor movement has been distracted by issues like immigrant rights and rather desperate efforts to maintain political influence in the Democratic party. The decline of manufacturing employment in the U.S. has left unions like UAW without the broader support they need. Unless the new UAW leadership under Bob King has plans to aggressively engage the UAW rank and file in a broader campaign to change the balance of power in the industry these will not be easy negotiations.

I knew Ron Santo, first, from a distance, as a lifelong Cubs fan and then, when he retired, as one of his regular caddies when he turned to golf at the local country club.

He was a generous and warm person with a giant personality who dominated the golf course the way he dominated the field. Within a few short years he was a scratch golfer and club champion, regularly smashing 300 yard drives down the center of the fairway, in an era long before 300 became the norm among professional golfers – prima facie evidence of his tremendous athletic ability.

He was a breath of fresh air in that all too clubby and cloistered leafy green suburban environment.

He will be missed.

Ron Santo, Longtime Cubs Stalwart, Dies at 70 – NYTimes.com.

Unfortunately, too few details in this story but it confirms what I said yesterday – that the NY Times had it wrong and late. The conflict over unionization of The Hobbit appears to have been settled but Jonathan Handel is suggesting that terms do not favor the unionization of film industry workers.

Hobbit Staying in New Zealand – The Hollywood Reporter.

Where was the Times when this was a labor dispute? Now it seems they are just trying to stir up trouble. As the story indicates, the labor issues have been settled.

A Labor Issue Entangles ‘The Hobbit’ – NYTimes.com.

This is a setback for the corporate governance movement. Business representatives so fear their own shareholders that they are suing to overturn the new proxy access rules put in place by the SEC. In response, unfortunately, the SEC has stayed implementation of the rules.

More on this soon.

Back in 2008 I found myself in a somewhat heated exchange with Yale’s Jeffrey Sonnenfeld at a conference at the Yale School of Management. He heartily defended the HP board of directors for ousting veteran technology oriented directors Tom Perkins, founder of companies like Genentech and a 20 year veteran of HP under its founders Bill Hewlett and Dave Packard, and George Keyworth. Of course, it turned out the “spying” methods used to go after Keyworth were anything but moral and touched on being illegal.

Sonnenfeld has once again come to the HP board’s defense in its latest ouster, this time of its wildly successful CEO, Mark Hurd. Hurd’s “sins,” at worst, remind one of the silliness that led right wing Republicans to impeach President Clinton. Both men landed on their feet, to say the least. Clinton is now one of the most respected political leaders on the planet and Hurd is now helping HP’s frenemy, Oracle, integrate newly acquired Sun into a rapidly evolving tech services market for Larry Ellison.

So what is that people like Sonnenfeld, not to say the current HP board itself, don’t understand?

The problem is that the mantra for board independence has in fact led to a culture of “politically correct” conservatism in American capitalism as a whole that threatens American leadership in innovation, creativity and productivity. HP’s board is independent, alright, so independent that only two of the ten board members (prior to the elevation of Ray Lane as chair and Leo Apotheker as CEO) had any serious technology experience. None has a real science background. The only stock the board members own appears to have been given to them by the Company for their “service” to shareholders.

Compare this to people like Ellison, who still has the bulk of his wealth tied up in Oracle, a company he founded several decades ago. Steve Jobs at Apple would have most of his wealth still in the company if their board hadn’t stupidly fired him some years back only to have to finally admit the silliness of their move and bring him back. Apple is now one of the most successful companies in modern business history.

Suffice to say when a board looks like that of HP, filled with bean counting finance people and other non-entities, it tends to look for leaders who have the same look and feel. So they have come up with a Leo Apotheker who was ousted from SAP after only 8 months as its sole CEO last year in the wake of a short but disastrous run in which he alienated, in turn, employees, shareholders, customers and fellow executives.

Despite the opportunity to hire from among the world’s best and brightest and to take on their board, no doubt, some of the world’s leading business and political leaders, the HP board circled the wagons and coughed up someone who in his first phone conference with Wall Street analysts did not even know the correct name of the company he was hired to lead. The market proceeded to wipe billions off HP’s share price.

To make matters worse, the board recruited Ray Lane, a venture capitalist, as board chair. Lane was pushed out of Oracle when he was no longer seen as a potential replacement for CEO Larry Ellison. But Lane no doubt remains hungry to become a CEO and will be waiting to pounce if, or when, Apotheker screws up.  This is an unstable and unworkable governance structure.

No wonder the HP board has been blasted publicly by, among others, Jack Welch and Larry Ellison. No wonder the stock lost billions in value after the ousting of Hurd and lost billions more after the elevation of Apotheker to the CEO spot.

Of course, life under Hurd was not great. He, too, was largely a number cruncher who relied heavily on buying R&D instead of nurturing it as had been HP’s “Way” under its founders, Bill Hewlett and Dave Packard, two of the founding giants of Silicon Valley.  Employee morale has sunk to historic lows as many talented engineers and scientists leave for greener pastures as their stock options vest.

No doubt, Hurd, and his predecessor Carly Fiorina, were largely responsible for picking the current feckless board, using their control of the proxy system.

Recently, the SEC made it easier for investors to nominate candidates for corporate boards, the so-called “proxy access” rules. These allow investors who, together, hold 3% or more the stock of a corporation to put nominees on the same proxy consent request used by corporate management to solicit consent, or the votes, of shareholders. The rule changes turn the consent request into an actual ballot with competing slates appearing on the same piece of paper received by shareholders.

HP would make a perfect test case for the new rules. Let’s hope Cal/PERS and other large institutional investors step forward to change the leadership culture at our country’s most important technology company.