Research Enterprise

Let’s say that companies have diverse views about patenting, as the Harbridge House report documented, and some companies might decline to participate in federal research because they can’t get title to inventions and won’t settle for a mere license. We might argue, then, that these companies might miss out on federal funding opportunities. What is the policy demand that they be included, if that means changing federal patent policy for all other companies? The one class of companies that would be willing to sue to keep others from practicing an invention appears to be the class of companies that Bayh-Dole was built to serve–to the exclusion of all the others. But that’s just the suspect arrangement, not the bogus one.

University patent brokers take this argument about what some companies in some industries might require, if they are to “participate” in federal research, and turn it into an argument that universities have a hard time if they “mix” funding from the government and from these same patent-fussy category 5B companies. Here’s the Bayh-Dole policy statement:

to promote collaboration between commercial concerns and nonprofit organizations, including universities

In the abstract, this sounds pleasant. Who is against collaboration? But really, that’s not the issue. The issue is the special special case, in which pharmaceutical firms offer to screen drug candidates discovered at universities in federal research–so long as the pharmaceutical company gets an exclusive license (=assignment) to anything interesting. That’s the “collaboration” that matters–everything else is rhetorical abstraction. The public interest to address matters of public health through university research becomes, in effect, a subsidy for pharmaceutical companies. Perhaps that is a legitimate government policy position–but then why not out and make the case for it rather than bury it in such a stultifyingly convoluted statute as Bayh-Dole? Continue reading →

The Benefits of the Special Special Case

There’s a good argument that the special special case has put more money into the pharmaceutical industry than would otherwise be there. The chase for such lucrative profits has in turn attracted speculators of all sorts willing to work the regulatory system to their advantage. We might imagine an environment in which federal patent policy was indifferent in the general case to the patent bubble created in biotech/pharma. In such an imagining, alternatives to monopoly control and development of research inventions might have had greater play–attacks as it were on the monopoly operating assumptions in pharma.

Research tools in biotech may have been developed with “open innovation” strategies, as similar tools have been developed in information technology. Research tools in nanotechnology may have been more broadly shared, stimulating development rather than retarding it. And development of inventions may have involved platform development prior to commercial development–that is, shared contributions from universities and industry prior to commercial competition–allow the technology to be explored, varied, characterized, and used before companies move to commercial, competitive development. For prescription drug candidates, the clinical testing might then have been an industry-wide activity rather than each test financed by (and the fate of the candidate compound determined by) a single monopoly interest.

For that matter, a different federal patent policy might have also diminished the need for the concept of the “prescription,” with all the regulatory significance that has been attached as a result of the inability of the pharmaceutical industry to establish for itself standards for quality, safety, efficacy, training, and advertising. The present alternatives to the pharmaceutical industry is a “generic” industry that deals in legacy compounds, off patent, and a “supplements” industry that attempts to avoid the regulatory requirements for drugs by limiting health claims for compounds.

Bayh-Dole’s role is to ensure that there will be no current-time competition for the development of compounds that address public health needs. Continue reading →

The special special case was turned into a general case, the only case, the best practice case. According to this new general case, inventions generally require private risk capital to become useful. Institutions must take on the responsibility to find that risk capital, because they will do better at finding risk capital than can either the federal government or inventors. Institutions will use monopoly patent rights as incentives to recruit companies to create commercial products. Making money is fair game for both the institution and the company. Inventors are attracted to the scheme because they too will receive a share of what the institution receives–and thus it is important for the scheme that it makes money, so there is money to share with inventors, so inventors will participate. Dealing in monopoly rights also comes with the territory. If an invention isn’t developed, then the federal research investment has been wasted. If the institution represents the best possible effort to attract companies with the offer of monopoly positions, any failure to create a commercial product is a failure of risk capital or a failure of the invention–not a failure of the institution or the scheme by which the general case circumvents the patent system. This is the scheme that Bayh-Dole enables.

Let’s look then at some uses of the special special case in its general form. This is where Bayh-Dole becomes arbitrary and disastrous. Again, the special special case is that of compounds that might become prescription drugs, for which the pharmaceutical industry (including biotech backed by venture capital, aiming to sell out to the pharmaceutical industry) insists on patent monopolies. But Bayh-Dole provides cover for generalizing the special special case to all inventions, all uses of patents, all methods of commercial application.

Thus, rather than looking for places where a patent monopoly is necessary, and then limiting the scope of the monopoly only to that necessity, and even then limiting the duration of the monopoly to the time needed to develop a product and recover one’s investment with some profit (a reasonable incentive), instead patent administrators look for places where a patent monopoly is desired. Continue reading →