It's more than a little reminiscent of the history of chemotherapy. All the commonly used drugs, the mustards, the folate antagonists, the vinca alkaloids, the platinum drugs, the taxanes, camphotecins, anthracyclins and nitrosoureas, and combination therapy were discovered at universities, financed with public funds and brought to market by pharmaceutical companies.

The same questions apply, the same dilemmas. Should research funded by taxpayers' money be free, or should it be licensed to private entities, so that the university can continue its mission. Should a university be allowed to do so in the face of shrinking public funds? Should a private entity be allowed to profit from publically funded research?

These aren't easy questions to answer, but they must be thought over before giving an answer.

This is where a lot of R&D happens.

Universities have been among the biggest producers of patents for 50+ years now.

The patent system is, in fact, extremely well suited to the university research model. First, they generally produce technologies that involve very high R&D costs. The major U.S. research universities spend $350-$1,500 million per year on R&D. They work in fields like aerospace, medicine, etc, where the inventions take years and millions of dollars to make. These aren't "One Click" type patents here. Second, universities are not in the business of bringing products to market. But they are responsible for much of the basic technology that goes into those products. By taking out patents on those inventions and licensing them out, they can get a cut of the revenues that accrue from products based on technologies they developed. Patents also allow for the orderly creation of spin-offs to bring products to market while kicking back some revenues to the parent university.

I think one fact that is often lost on HN is that this kind of thing is what most engineers outside the software niche think of when they think about the patent system. In most engineering fields, there is a much tighter synergy between the universities and industry than there is in software, and patents are a key mediator between the two spheres. Most of the engineers I know (aerospace, chemical, mechanical) would consider it unfair for a company to implement the technology they read in a university research paper, technology that cost a lot of money to develop, without paying the university a license.

You know, people who does the work to create the patent for $500 rewards then get's nothing ;)

Developers.