As university after university joined the patent chase, one academic institution stood out as a bulwark of ethical resolve—that is, until now. The university was Harvard, and even though the school began licensing inventions more than a decade ago, it earned its reputation as a bastion of purity because of landmark decision in 1981. At issue then was a controversial proposal involving molecular biologist Mark Ptashne, whose advances in recombinant DNA techniques were giving rise to new technologies. Rather than merely licensing his developments, Harvard considered helping Ptashne found a new company —a firm in which the university would then maintain a minority interest.

The case divided the faculty for months. And in the end, Harvard decided that the plan contained too many pitfalls. In his annual report for the 1979-80 school year, president Derek Bok explained that “in attempting to achieve practical results, the university must not endanger its...

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