10 Ways Universities Deal in Patents

I have been thinking about how university technology transfer is depicted, versus how it actually happens. The depictions are something of a prophetic hope–inventions reported to the university’s licensing office will be evaluated for “commercial potential” and those that look promising will be acquired, patented, and marketed to companies to develop into beneficial products. A win for the public, for industry, and for the university and its inventors (in the form of royalties and prestige). It sounds wonderful, but practice does not follow the prophecy, and there’s a big problem with that–repeating the wonderful depiction in the absence of practice is disingenuous, even false, even fraud. It’s not even just putting a positive spin on things. It’s just not what happens.

Universities expanded their patent policies from voluntary reporting and assignment to compulsory assignment of inventions. They expanded the scope of what is to be reported from patentable inventions made in the course of their official duties to anything a licensing officer describes as inventive even if not patentable made within the field of an inventor’s professional expertise. That expansion means university licensing offices claim an awful lot of stuff that they cannot possibly deal with. This, in turn, means that the most frequent outcome of a university taking ownership of an “invention” is that nothing, nothing ever happens. If this were a Talking Heads song, then it would be “Heaven.” But that heaven, described, is a sort of undesirable hell.

Consider the possible outcomes. Here’s a sketch of what typically happens. No one keeps records to document all this, but from twenty years in the technology transfer world, here’s something to start with, going from most frequent to less frequent, if not rare. Continue reading

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Bayh-Dole, Federal Agency Conflict of Interest, and the Covid Vaccines

Here is a recent video clip of an interview with Robert F. Kennedy, Jr. He asserts that it was known that HCQ and Ivermectin were effective in treating corona viruses by 2004.

Kennedy cites 21 CFR 56.102(d):

Emergency use means the use of a test article on a human subject in a life-threatening situation in which no standard acceptable treatment is available, and in which there is not sufficient time to obtain IRB approval.

You can’t have “emergency use” if there’s an available “standard acceptable treatment.” Continue reading

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Faculty Strategies for Getting Their IP Back, 2

Here are some strategies for getting IP back that don’t work or avoid IP ownership.

(1) Don’t disclose an invention to the university, and file for a patent on your own. Your application will be published in a year or so. Someone will see it and ask questions. If you spin up a company someone will notice. If you license to a company someone will notice. At some point you will be asked to assign and you can fight it then, in court and with the university ready to smear your reputation and ruin your career, or you will cave.

You may be able to work the system if you have a consulting deal with a company. That depends on how well drafted and guarded the university’s policy is on consulting. Many university policies on consulting these days try to stipulate that any consulting agreement’s terms on IP are subordinate to a university’s claims. That stipulation may not hold up, but the university has more money for the legal fight than you can imagine. That’s even more the case if you also are a co-owner of the company you have set up to consult for. Then there’s likely also a policy on “deeper involvement than consulting.”

Even though you might think that the university has no claim or it would be unfair if it did make a claim on inventions that you make outside the university, with a company, say, or at least not using university time and resources, many university IP policies make a claim to any invention you make in your “field” or in the area of expertise for which you are “hired” or “employed” (ignoring that faculty are not “employed” for IP purposes unless they expressly agree to be, but for another time). Continue reading

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Faculty Strategies for Getting Their IP Back

If you are a faculty member at an American university, you will get a lot of twisted advice from your university technology transfer office about intellectual property, Bayh-Dole, and patent policy. The advice (and descriptions about technology transfer) is mostly wrong or ill-conceived but it might sound plausible if you don’t know practice, and to contest it will cost you somewhere over $200,000 in attorney fees. You may win, in a pyrrhic way, but even then you won’t be better off for it. They will just double down, change their policy to try to cover for whatever you forced them to admit, and continue on. It will cost the next person another $200,000 five or ten years on when the next opportunity arises.

Anyhows, there are ways to navigate university technology transfer without the big fight. Here are some thoughts on strategy. Your situation may be different. Your circumstances may be different. You may not have the interest or connections or time. But maybe these thoughts give you some ideas about how to work the system to your advantage, and to that of the stuff you create, make, collect, discover, invent, realize, cultivate, and compose.

Most university IP policies now demand that all inventions must be assigned to the university. Invention is defined broadly to mean all patentable and non-patentable inventions, software, know-how, improvements (what are those?), and anything that might have “commercial value.” What’s a non-patentable invention? Anything that a university administrator calls an invention. Essentially, anything that doesn’t have an ownership theory in patent law. So, if you make something or think something or realize something, you are at risk that a university administrator will call it an invention and bring it under their policy of demanding to own it. There’s really nothing you can do once you report it to them. Continue reading

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AUTM arguments for not complying with Bayh-Dole

Just a quick note here on AUTM arguments are for not complying with Bayh-Dole. Just off a meeting that paid attention to AUTM’s position. I’ll summarize the main arguments here.

  1. Access in the form of commercial products is more important than compliance.
  2. Exclusive licenses are more difficult to close without the incentive of monopoly pricing.
  3. Without exclusive licensing, commercial products won’t be made.
  4. Bayh-Dole’s “reasonable terms” requirement would mean fewer exclusive licenses.
  5. “Reasonable terms” don’t include reasonable price because price isn’t mentioned.
  6. Senators Bayh and Dole claimed they never intended Bayh-Dole to be used for price controls (which they did).

In short, the argument goes–if we were to comply with Bayh-Dole, then we could not grant as many exclusive licenses–but rather than own up to our noncompliance, we claim that we are complying with Bayh-Dole and ignore the parts that we aren’t complying with. They don’t bother pointing out how few exclusive licenses they actually grant compared to the size of their patent holdings, or how few of those exclusive licenses that they do grant result in actual commercial products. It’s really hard, the way they do it, obviously.

Put another way, Bayh-Dole must be ignored to the extent that it expects reasonable pricing or the promotion of competitive use of subject inventions–even though these are express objectives of the law. Another way, AUTM argues that Congress intended patent monopoly pricing and suppression of competitive use of inventions made in federal work as necessary incentives for the commercial development of those inventions. Or, bluntly, the only way that new medicines get developed is if pharma companies have the freedom to screw the US public on pricing, and since that is just how it is, it makes sense for universities to get a share–however miniscule–of this price gouging of the sick and the federal government. The royalty paid to the university in a small way lightens the pain of the price gouging by giving the public a “return” on the federal payment of research funding. There is no point in finding other ways to develop new medicines–all other ways will fail. Continue reading

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Government Funding For Research, 1

Out in Twitterland, I saw this tweet by Brett Blackham:

Arguably, research and development is so important that government should have nothing to do with it. However since 1980 a company or university could get government money to do research & still be issued patent monopolies.

It’s easy enough to dismiss the tweet as silly or ignorant. Government letting companies deal in patent monopolies goes back to at least the 1963 Kennedy patent policy, and letting universities deal in patent monopolies for health inventions started in earnest with the NIH’s Institutional Patent Agreement program restarted in 1968.

But let’s not dismiss this tweet. Instead, let’s consider it as an interesting proposition. After all, if something that’s happening is a really great thing, like government funding for research, then there should be a good case to be made reciting the fundamentals that shows just how it is a great thing. So, let’s at it.

First, let’s add a few things to the potential problems with government funding, just to make its defense not merely facile. Continue reading

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Xtandi, Bayh-Dole, and how Pfizer might stop worrying and love the march in

The American Prospect has an interesting piece (“A Big Miss on Drug Prices”) on the NIH yet again defying the Bayh-Dole Act and refusing to launch an investigation into whether UCLA and Pfizer have met Bayh-Dole’s standard (35 USC 201(f)) to make the benefits of using a subject invention available to the public on “reasonable” terms. As Dayan points out, the NIH in its rejection of a petition to start march in proceedings, happily leaves out the “reasonable terms” part of the 35 USC 203(a)(1) condition for march in.

NIH refuses not only not to march in but also not to even conduct an inquiry to ascertain whether UCLA and Pfizer have met the requirement of “on reasonable terms.” The “reasonable” in 35 USC 201(f), given the remedy is licensing to introduce more independent use of a given subject invention, carries an effective meaning of “competitive.” Reasonable terms are those that would be reasonably expected if there were competitive use of the subject invention. NIH just ignores the law and also ignores its responsibility to the public under the law. The effect of NIH’s refusal to even start a march in procedure to evaluate the situation surrounding Xtandi is to claim that Congress passed Bayh-Dole with public protections delegated to federal agencies but did not expect federal agencies to protect the public by using any of them.

In all of this, it is important to understand that the Bayh-Dole march in right is not the first line of public protection in Bayh-Dole. March in is, like, number three. Not that it appears to matter much to the NIH, which is not about to use any of the rights Congress secured for the federal government to protect the public from patent abuse, especially in matters of public health and safety. Continue reading

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Inventors would own more, were it not for noncompliant Bayh-Dole practice

I saw this tweet this morning:

I agree Inventors should own more, but institutions were/are the heart of Bayh-Dole that (arguably) enables IP-driven startups… this is bc many/most PI inventions would go into a black hole without tech transfer officer asking them for invention disclosures…

It was a reply to someone suggesting inventors ought to own their inventions at universities. The idea behind this response is that if it were not for university ownership and tech transfer services, these inventions would all go to waste in a “black hole.” Inventors at universities are unworthy to own the inventions they make. University administrators are so much more worthy. Certainly the black hole imagery is richer than merely gathering dust on a shelf. But there’s somewhat more to it, so I thought I would discuss.

In my over 20 years in tech transfer, inventions of any use don’t go “into a black hole” if a university fails to demand ownership. Sure, they may not get used–but 95% of patented inventions don’t get used anyway. One should not have a shocked face. But even in this context, the university demand to own everything is an even bigger, blacker black hole.

Continue reading

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Why not let’s try, Frank?

Frank Cullen, writing at the “Council for Innovation Promotion” has posted a hand-wringing response to a letter from members of Congress to the Secretary of Health and Human Services requesting that the government use Bayh-Dole’s march-in provisions to address price gouging of the prostate cancer drug Xtandi. Cullen writes that march-in “would chill innovation and disincentivize the launch of new startups and inventions.” That’s nonsense–er, an unsupported claim–but if it were true, then it would be a chilling indictment of Bayh-Dole, since Bayh-Dole has march-in baked into its public bargain on retention by contractors of inventions they acquire made in federally funded work.

Cullen goes on to recite a fictitious account of Bayh-Dole and its effects, using this account as evidence for the chilling he predicts from march in. Let’s walk through this mess.

To understand why, just consider the status quo before Congress passed the Bayh-Dole Act in 1980.

Let’s do that. Before Bayh-Dole, the NIH, NSF, and Department of Commerce all operated Institutional Patent Agreement programs. Under an IPA, a nonprofit was required to take ownership of any invention made in agency-funded work that the nonprofit decided to patent. For other nonprofits not in an IPA program and for-profits without product-making capacity, such as contract research organizations, executive branch patent policy (Kennedy 1963, modified by Nixon 1971) allowed contractors to retain invention rights when they could show that their private exploitation of patent exclusivity would more likely serve the public interest than would open access to the invention by way of federal ownership. If they couldn’t show the public would be better off, then, well, what would be the point of letting them mess around with patents? The IPA programs were built by federal attorneys whose aim was to circumvent executive branch patent policy, making an exception (private exploitation of patents on inventions made in public-directed work) into their general rule. Continue reading

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March-in rights, Xtandi, and Bayh-Dole’s patent rights clause

Senator Bernie Sanders just tweeted about Xtandi, asking patients taking Xtandi to share their stories.

The prostate cancer drug Xtandi was invented by taxpayer-funded scientists at UCLA, but now costs Americans nearly $190,000 — or up to six times the price in other wealthy countries. If you are taking Xtandi and would like to share your story, click below.

Yes, federal agencies should march in on Xtandi, among other actions they have a duty to take to enforce Bayh-Dole’s patent rights clause, under which a contractor retaining title to a subject invention grants the government rights sufficient to protect the public from nonuse and unreasonable use, including unreasonable, non-competitive pricing.

Senator Sanders is right to call out Pfizer for unreasonable pricing. But his standard is not the standard set forth in Bayh-Dole. Bayh-Dole is not concerned with either affordability or the patent monopoly prices charged in other countries–Bayh-Dole rather is concerned with free competition and enterprise and requires either a competitive price or licensing that creates competition. I’ll show you how it works. Bayh-Dole is a messy, dismal law, and as a consequence, the pain you feel is having to read 4,000 words for what ought to be straightforward. I’m sorry. Not my fault. I feel the hurt, too.

Bayh-Dole expects federal agencies to review utilization reports (35 USC 202(c)(5)) and determine if the benefits of a subject invention are available to the public on reasonable terms (35 USC 203(a)(1) and 201(f)). If the terms are not reasonable, then, as already agreed to by the contractor, a federal agency is to require licensing to introduce competition. But NIH won’t even conduct a review! NIH refuses to do its duty under Bayh-Dole. Continue reading

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