WSJ: Why Shouldn't Princeton Pay Taxes?

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<p>Sorry, you’re in over your head on this one, tiger cub. Yes, of course, U.S. Supreme Court decisions are binding on all courts, but sometimes those decisions reach only the operations of the federal government. The law of standing as articulated by SCOTUS is one such area of law: it’s based on the Court’s interpretation of Article III of the U.S. Constitution, which confers jurisdiction on federal courts (so-called “Article III courts”). Article III says federal courts may only hear “cases or controversies”; SCOTUS says that its doctrine of standing follows from this requirement. But Article III says nothing about the jurisdiction of state courts, and neither do SCOTUS’s various pronouncements on standing interpreting Article III. State courts, and state legislatures if they care to intervene, get to make their own law of standing, but generally speaking, state court jurisdiction is much broader than federal court jurisdiction, and in many states standing requirements are not as stringent as those at the federal level. On a closely related point, SCOTUS has long insisted that federal courts may not issue “advisory opinions,” e.g., advising the legislature on whether a proposed bill would or wouldn’t be constitutional, again stating this follows from the Article III “case or controversy” requirement; but in some states, state courts can and do issue advisory opinions.</p>

<p>I’ve actually discussed this at some length with a close friend who happens to be a leading expert on federal court jurisdiction and has written extensively about the law of standing. Trust me on this. Or if you don’t trust me, ask any lawyer. Or look it up on wikipedia, if that suits you. </p>

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<p>No, the complaint is that it didn’t go toward research; it’s just a profit-sharing arrangement with the particular faculty members who did the research and made the discoveries that led to the lucrative patents. It’s as if the university said to those particular professors, “Well, we (the university) own the patents because you signed away any intellectual property rights to us as part of your employment contract, but because we’re making so much money off this stuff, and because it couldn’t have happened without you, we’ll now in effect treat you as a co-owner and split the take with you.” Now that might indeed create an incentive for those particular faculty members to stay at Princeton, and it might make Princeton a more attractive place for others in fields that could yield potentially commercially valuable patent, it is rather unusual behavior for a university. Most that I’m familiar with keep the patent revenue, and distribute it in the form of research grants. To be sure, Princeton is doing that as well with the bulk of the money, but the amount being paid out directly to faculty for their own personal use is not trivial. There’s been a pretty fuzzy boundary between “academic” research and commercial research in some discipline for a long. I’m not sure Princeton’s practice is unique, but it does seem to make the boundary between academic research and commercial research even more indistinct.</p>