I saw a mention of the iShoe guy earlier today, but didn't read too much about it, so it was nice taking a closer look. My initial reaction is that MIT is being overly stingy with the licensing and ownership, and it is creating a worse situation for research. In the true spirit of Laissez-faire economics, the "research-by-students" market is readjusting itself in that, according to the article, students burned by this policy are moving their operations off-campus.
The problem I see with it is that it becomes a huge duplication and waste of effort. If a university sets up a bunch of labs, machine shops, and facilities for its students to use, but they all go off-campus to be able to keep ownership of their inventions, all that lab space at school is wasted.
I can see the school wanting to make back money on its investments in facilities and teaching, both of which can be hugely expensive. However, it seems like there should be a clear distinction between a "university" and a "corporate R&D department." To me, the purpose of a university is to promote the progress and learning of its students as well as support its faculty to conduct basic research. The R&D department is devoted to creating new products for its company to sell, with a focus on shorter-term commercialization.
These two goals are not incompatible and often intersect, but some level of separation should be kept between them in order to let them do what they do best. Universities can conduct research on a wide range of topics without the pressures of needing to produce a viable product. On the other hand, R&D labs have the task of making something you can actually use without a PhD in mechanical engineering. Universities produce tons of raw ideas, companies mine that raw idea-ore and smelt it into products.
A school saying "we want to try to commercialize anything coming out of our students" is like a group of civic engineers saying "let's forget about that whole bridge-building thing and just do some quantum physics." If you want to do quantum physics, become a quantum physicist, but in the mean time, people need bridges now. Similarly, if you want to make money off of selling products, become a company, but don't interfere with the learning process in order to make a buck.
If a student has money to develop and protect an invention on his own, should he? It depends. Turning the job of commercializing a product over to a university is a better bet if you have no interest in business or if finishing school is a priority.
That's a false dichotomy. The student could put the research in the public domain, have a nice bit of padding on their resume, and let the research benefit the maximum number of people.
Invention-hoarding (or "intellectual property" in general) seems to be good for inventors, bad for inventions. It isn't pretty hard to see that being able to sell licenses for an invention you make gives you more money. On the other hand, Erez Lieberman (the iShoe guy) now has to pay $75,000 up front to MIT just to try to commercialize his idea (and even more should he succeed). Also, assuming he does gain exclusive rights, what if someone else wants to come along and make the same thing? If the idea were unpatented (or whatever the equivalent to public domain is for patents), then anyone could try their hand at making such a shoe, and whoever had the best design or best business plan would succeed. If the license is exclusive, only one person can work on a self-balancing shoe at a time.
On a brief societal note, the challenge would become to figure out an appropriate balance between good for the inventor and good for the invention such that a maximum number of stuff is created. Too much "intellectual property" ownership and individual ideas are never combined due to prohibitive licensing costs; too little, and nobody ever makes enough money off of their inventions for it to be worthwhile to invent them (in theory. It's assumed that this would be the case, so nobody has ever really tried).
Last month, the university determined that while the students own the design, R.P.I. owns the idea for the bottles. The students must license it from them [...]
What? That's just absurd. I have an idea for a machine to solve world hunger. Now anyone who invents one may own the design, but they have to pay me for the "idea." How is this "promoting the Progress of Science and useful Arts" again?
"At the same time, they have real potential, and our goal is to encourage them."
That seems to be the heart of it (right at the end of the article). By maintaining strict control over ownership of ideas and design, the university is discouraging invention with university resources, making it more difficult to conduct research and development at all. It seems like RPI is coming up with a more sensible policy, so I guess some good is coming of it.
1. That part isn't even completely clear-cut. A company like Red Hat wouldn't be viable if it didn't share alike its inventions.