Foreign Firms with Deep Pockets Test U.S. Labs : Research: Science needs open borders, but critics say other countries are acquiring key knowledge on the cheap.


When Gerard Mourou, director of a big research laboratory at the University of Michigan, accepted $1 million in research funding from Japanese electronics giant Fujitsu Ltd., it seemed like a simple decision.

Without the money, key technologies under development at the university's Center for Ultrafast Optical Science would wither, and neither the U.S. government nor U.S. industry was offering any funds.

But when a lab researcher filed for a patent on one of the center's technologies and left to form his own company, the university was left in a quandary. Fujitsu had been promised exclusive rights to any inventions in exchange for its support. But now a U.S. firm was pledging to use the technology to create jobs in America.

This dilemma is becoming a common one in research institutions across the country. Taxpayer-supported universities and government laboratories--many of which had grown dependent on Cold War defense research--are starving for funds, and they are increasingly turning to foreign corporations for sustenance.

Critics say these firms are getting valuable technology on the cheap and transferring it overseas and that American workers and taxpayers are getting the short end of the deal.

"There is a lot of taxpayer money spent at universities and laboratories," says Norman Kreisman, an adviser on international research at the Department of Energy, the agency which oversees national laboratories such as Lawrence Livermore Laboratory. "You have to ask whether there are situations where the taxpayer is subsidizing the export of his own job."

Adds Erich Bloch, former director of the National Science Foundation and a frequent critic of the U.S. research establishment: "The U.S. taxpayer pays for the MITs and Stanfords of the world. The foreign companies just pay incremental costs. . . . They're paying 10 cents on the dollar for the research."

European drug companies have been among the most aggressive in mining America's rich trove of technology. Two years ago, for example, Swiss drug maker Sandoz agreed to pay La Jolla-based Scripps Research Institute $300 million for first rights to patents coming out of the institute over a 10-year period. (Pressure from the National Institute of Health later forced Scripps to renegotiate some terms of the agreement.)

But because America's trade with Europe is largely balanced and Europe's top research institutions are accessible to American scientists, there has been little alarm about European access to U.S. research.

Most of the concern centers on Japan, which has a large and growing trade surplus with the United States. Because Japanese research efforts are structured differently, with most important research taking place at private corporations, there is a sense of injustice among American companies. They don't have access to the leading-edge research in Japan in the same way Japanese companies do in America.

Many American researchers are also more concerned about Japan because of the comprehensiveness with which it has targeted every level of America's technology food chain--from basic research to acquisitions of technology companies. There is fear that the Japanese will use American technology against American industry, just as they did in the television and semiconductor industries.

"The question is, do we get as much R&D from them as they get from us?" Bloch asks rhetorically. "No. We have to look at this as a business relationship."

Few believe that American research universities should cut off foreign access to basic research. A free flow of information is critical if America is to maintain its strength in the basic sciences, and the country's research universities would be handicapped without access to talented foreign graduate students.

But cash-strapped universities are now focusing more of their efforts in areas with potential commercial applications. In fields such as biotechnology, scientific research is spawning commercial products much more quickly than in the past. That has raised new questions about exactly what constitutes the type of research that should remain accessible.

Well-funded foreign corporations that think long-term may be in a better position to capitalize on basic research advances than American corporations, which are often fixated on quarterly profits. U.S. firms voice support for university research and complain about foreign access, but they often fail to underwrite their rhetoric with dollars.

For example, Craig Barrett, chief operating officer at Intel Corp., is a former Stanford University professor and a staunch supporter of the institution. "Our research universities are an incredibly valuable commodity," he says, warning that universities should resist focusing on research with two- or three-year targets.

Yet Intel itself is negotiating with USC to fund a short-term research agreement on image and data compression.

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