Even the $100K/yr drugs don’t much work

Advocates for Bayh-Dole make a great deal over the number of drugs that involve university patents that have been approved since the passage of the Bayh-Dole Act. One of their measures is the number of drugs that have been developed. But there’s a catch–not only are many of the drugs outrageously priced, but the sad fact is, many of those high-priced drugs don’t actually provide much benefit in exchange for the suffering they cause. Let’s have a look-see.

Here’s BIO:

$1.3 trillion in economic output. Support for roughly 4.2 million jobs. The creation of more than 11,000 start-up companies. More than 200 new drugs and vaccines. This is the legacy of the Bayh-Dole Act, which for more than 35 years has empowered universities, small businesses and non-profit institutions to take ownership of innovations discovered through basic federally-funded research.

Here is Joe Allen, the Al Gore of Bayh-Dolism:

The successful integration of public research institutions into the economy is based on the Bayh-Dole Act, which inserted the incentives of patent ownership into the government R&D system. Not a single new drug had been developed from NIH funded research under the patent destroying policies preceding Bayh-Dole.

These folks don’t even attempt to show which of these drugs actually involved subject inventions–inventions made with federal support and thus subject to the standard patent rights clauses authorized by Bayh-Dole. Instead, we are to believe by association–that the number of new drugs that involve university inventions is somehow an indication of the success of the Bayh-Dole Act, and we should accept then most everything else that has been done in the name of Bayh-Dole without question–compulsory ownership policies at universities, refusal of universities to comply with the standard patent rights clause, indifference at key federal agencies to enforcing the standard patent rights clause or practicing the inventions licensed to the government. Continue reading

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Taking Apart APLU’s Talking Points on Bayh-Dole, 4

One more bit about Bayh-Dole in the APLU Talking Points:

Before 1980, fewer than 250 patents were issued to U.S. universities annually; discoveries were rarely commercialized for the public’s benefit. By contrast, according to a recent survey by the Association of University Technology Managers (AUTM), in 2015 alone, U.S. universities garnered 6,164 U.S. patents, led to the formation of 950 new startup companies, and generated more than 700 new commercial products

More nonsense and gibberish. First, the numbers aren’t accurate. In the years before 1981, universities and related nonprofits were acquiring between 350 and 500 US patents per year, with Research Corporation acquiring 100 to 160 more. APLU doesn’t do history well. History, apparently, is not a friend of APLU’s Talking Points. Of these 500-600 patents a year, fewer than 100 recited federal funding. In recent years, universities have been acquiring patents at the rate of 6,500 to 7,000 per year, of which 3,500 recite government funding. The numbers are obviously larger–but then the federal research budget has also grown substantially, patent law has changed to make software, life forms, business methods, and the like patentable, and university administrators have dedicated themselves to be non-selective in what they attempt to patent. What’s changed, meaningfully, is the ratio of federally funded patents to others–from 14% in 1976 (when the IPA program was still active) to 47% in 2016. That means a much higher percentage of patents held by universities are encumbered by the bureaucratic nonsense required by Bayh-Dole’s standard patent rights clause–none of which has anything whatsoever to do with innovation, entrepreneurship, or commercialization. Continue reading

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Taking Apart APLU’s Talking Points on Bayh-Dole, 3

We are working through APLU’s Talking Points on the cash cows of Bayh-Dole, commercialization, entrepreneurship and whatever else the federal government can be induced to fund.

The APLU Talking Points turn next to what the federal government should do to support universities with such commitments to intend to nurture and promote programs to advance the public good through startups that take exclusive patent licenses to the results of publicly funded research. More money for research, obviously. But then Bayh-Dole:

2) Support and Preserve the Bayh-Dole Act of 1980

Bayh-Dole, one of the most poorly drafted, pernicious, damning bits of legislation to come along, the love monster of the pharmaceutical industry and university patent brokers, made to extend their monopoly model of drug development to all inventions and industries as cover for turning federal research money into a private subsidy for pharma and the speculative investors hoping to share in pharma’s success in exploiting public health as a source of profits. In this, the NIH is complicit, since the NIH produced the draft of Bayh-Dole after it failed to extend the IPA program government-wide. Even if Congress believes that monopoly control of publicly supported biomedical inventions is a really good thing (and then quit complaining about those $100K a year medications), Bayh-Dole should be repealed for all other areas of government research activity.

Bayh-Dole destroyed the university patent agent network, destroyed university patent policies that favored inventors, destroyed the university role in contributing to the public domain, destroyed the university role in staying out of commercial entanglements. Bayh-Dole is a vile law, a cancer that should be eradicated. Where’s the 3-bromo-pyruvate to rid us of Bayh-Dole? Ah, but the APLU has embraced its cancer: Continue reading

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Taking Apart APLU’s Talking Points on Bayh-Dole, 2

We are working through APLU’s Talking Points on the cash cows of Bayh-Dole, commercialization, entrepreneurship and whatever else the federal government can be induced to fund.

We reach a talking point in bold. It must be more important than the others:

Supporting and enhancing the commercialization of university research through technology transfer is a critical facet of universities’ public missions.

Again, an assertion. How does a public university come to change its public mission? Some universities have modified their policy statements to add “economic development” as a “mission.” It’s not clear however what such a thing means. What does it mean to have such a “mission.”? Why is this a mission and not a consequence of carrying out the other “missions” of teaching, research, and public service? That is, why isn’t “technology transfer” already part of teaching and public service? Why should “technology transfer” involve only those bits of technology invented at the university? Why not transfer whatever technology is most needed by those desiring instruction? Again, note the weasel wording:

supporting…enhancing… commercialization… through technology transfer… a critical facet

Nothing is presented to show how or why commercialization of inventions is so “critical” for universities. Why should universities be involved rather than specialist companies chosen by inventors? Why should commercialization be more critical than, say, public access or use? That is, for a given research invention, why should turning that invention into a commercial product be more important than teaching others how to use it? For most inventions–especially methods–there is simply no reason to put a commercial product ahead of direct use. But APLU wants us to believe that without someone making money–a lot of it via a patent monopoly–there can be no public benefit from research inventions. It’s utter nonsense, but told to us with a straight face. That’s got to mean a scam. Continue reading

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Taking Apart APLU’s Talking Points on Bayh-Dole, 1

The APLU has published a set of talking points about a bunch of things (original spelling retained):


Let’s call them “cash cows” for lack of a better organizing principle. The primary point is that the APLU is committed to making the case for continued (if not expanded) government money provided to universities. The talking points serve the role of ensuring that political appearances will substitute for fiscal accountability–that is, so long as the activities being supported are made to appear good, that’s sufficient. Whether the supported activities are really doing anything beneficial for the broader community is rather immaterial. What counts is the persistent message that they are.

Talking points, of course, have that delightful overtone of helping people who cannot think for themselves at least repeat what someone aiming to control the discussion wants to have circulating. That way the appearance can be given that most everyone has the same experience–university programs across the country are delivering technology transfer successes in the form of startup companies that vitalize regional economies, create new products, and benefit the public. But the stark reality is that the university administrators are reciting the “talking points” rather than looking at their own activity. Just no one will admit it. The justification is that sticking to the talking points is for a “good cause”–all those public benefits that universities intend by their technology commercialization programs. If intent were truth, we would all be millionaires. The actual “good cause” however, as the APLU document makes clear, is getting more government money to pay administrators to operate technology commercialization programs, especially ones that involve “entrepreneurship” and startup companies. Continue reading

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Bogus intended incentives of the patent system

Here is an article espousing the virtues of the Bayh-Dole Act by Joe Allen, posted by the University of Rochester’s “URVentures.” Here’s one bit:

Prior to Bayh-Dole, when the federal government took invention rights away from their creators making them available to all through non-exclusive licensing (similar to the open source model), Congress found that not one drug had been commercialized from NIH funding.  About 28,000 federally funded inventions gathered dust in Washington, benefitting no one. This is not surprising since prior government policies destroyed the intended incentives of the patent system.

This is rubbish. Prior to Bayh-Dole the NIH operated the Institutional Patent Agreement program. Under the IPA, a university could own inventions made with NIH support and seek to commercialize them. The federal government did not “take invention rights away” from “their creators”–the government allowed universities to “take” the rights away, on the condition that the universities did something beneficial with those rights. The universities argued they could do better than the federal government. It’s just that under the IPA program, they did much worse than the federal government, with a 5% commercialization rate, while the government’s biomedical commercialization rate was 23%. Where federal agencies did support research on the condition that patentable inventions were deliverables, such as in the Department of Agriculture, the commercialization rates for non-exclusively licensed new products was nearly 100%, according to the Harbridge House report. Continue reading

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The Bayh-Dole implications of “big” projects created by university policies and practices

In the usual depictions of the Bayh-Dole Act, the emphasis gets put on university ownership of inventions made with federal support. What is not pointed out is that Bayh-Dole not only allows (but does not require) such ownership, but makes this allowing a required default in federal contracting for research, and then tops it off by making it nearly impossible to alter the default or even to enforce anything having to do with the default.

But even less commented upon–meaning never, as far as I can tell–is Bayh-Dole’s handling of the scope of the government’s interest in inventions made with federal support. This scope matters, as it is the scope of the government’s rights in inventions that lies at the base of how the government might respond to monopoly pricing of prescription drugs discovered, invented, and made with federal support.

Let’s look at this in outline form. I will try not to oversimplify, and will keep the snark to a minimum. Here is a typical scenario:

A university investigator starts an inquiry. Call it a project.

The investigator requests federal support for part or all of the project.

The request includes a written account of the project and the proposed work to be funded by the government.

The government, however, provides the funding to the university that hosts the project, using a funding agreement. This is where Bayh-Dole’s standard patent rights clause comes into play.

The university, moreover, has written policies that require inventors to assign inventions to the university and to commercialize those inventions.

The university files patent applications on the inventions with claims that are directed to commercial applications.

In practice, the university assigns inventions to commercialization partners using an instrument labeled “exclusive license” and making a show of withholding formal title to licensed patents.

In this scenario, the project started by the investigator is expanded at each step. Continue reading

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Let me come in again. Three ways an invention meets the definition of “subject invention.”

Here are the three basic ways to make an invention made with federal support meet the definition of “subject invention.” I said there were two ways when there were really three, but hey, this is the advanced course.

  1. Accept assignment of the invention when offered
  2. Make each employee participating in a federally funded project a party to the funding agreement
  3. Compel each employee to assign each invention

The first approach is the one authorized by Bayh-Dole. Bayh-Dole provides no requirement that federal agencies require universities or other research hosts to obtain assignment or compel assignment of inventions made with federal support. Since Bayh-Dole preempts all other laws on the matter unless they expressly reference Bayh-Dole, there’s no way under Bayh-Dole to change the approach short of amending the law. The Supreme Court in Stanford v Roche was adamant this was the case. Anything that a university might do to obtain assignment has nothing to do with a requirement authorized by Bayh-Dole.

The second approach is the clever addition made by the standard patent rights clause authorized by Bayh-Dole. The standard patent rights clause requires universities to make each employee a party to the funding agreement. It does this by requiring universities to require each employee to make a personal written commitment to take three actions under the funding agreement to protect the government’s interest. When a university complies with this requirement, it makes each employee a party to the funding agreement, and by the definitions in Bayh-Dole, therefore also a contractor. When an employee-contractor invents, the employee-contractor owns the invention by federal common law, and thus the invention becomes a subject invention without any assignment to the institution that hosts the research, or anyone else. No university that I know of complies with the standard patent rights clause on this point.

The third approach is the one followed by most universities. Continue reading

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Continued Employment as Consideration

Here is a nice article that worries whether continued employment is sufficient to create an enforceable obligation to assign inventions to an employer: “Is Continued Employment Enough to Uphold Invention Assignment Agreements?

The brief answer is, yes.

Add the qualifications: under Wyoming state law, for at-will employees.

The distinction in a footnote:

The Wyoming Supreme Court distinguished its previous ruling in Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531 (Wyo. 1993), which required separate consideration, other than continued at-will employment, for a non-compete agreement, noting “there is a fundamental difference between non-competition agreements and intellectual property assignment agreements,” and that the stability of the business community is served by not requiring additional consideration for intellectual property assignments. Preston, 277 P.3d at 87.

I am boggled to understand what the “fundamental difference” is between non-compete agreements and intellectual property assignment agreements. The whole point of an invention assignment agreements is to force employer control of ability to prevent inventors and others from exploiting an invention. Continue reading

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When a university and a company love America so much that they produce usable technology and dedicate it to be practiced for any government purpose, 2

How would one know whether a project is a big project, or a subject invention is a big subject invention, or a commercial product just another instance of that big subject invention, with a full license already granted to the federal government? Easy. Three classes of document.

First, the documents that describe the project established by the university. The request for proposals. The research proposal submitted and approved. The articles written by the investigators and by university officials regarding the project. The reports to the Government. The stated goals of the university’s invention licensing program. These together provide a written expression of the scope of the project.

Second, the patent applications and issued patents. If the claims are drafted to cover therapeutic drugs, then it’s clear that the university intends that the project will move to development of therapeutic drugs–the scope of the subject invention includes commercial products, however these might be developed. Separate accounting doesn’t matter. The time relationship is not an important determinant.

Third, the licensing agreement(s). If there is an instrument labeled “Exclusive Patent License” but the document itself grants all substantial rights in the invention, then the instrument assigns the invention, and Bayh-Dole requires that its ownership provisions follow that assignment–and the ownership provision in Bayh-Dole carries with it, in the same provision, the Government’s license to practice and have practiced the subject invention. It does not matter what downstream patents get filed on the subject invention–so long as there is a common project that includes creating a commercial product and a formal line of patenting and assigning of the invention in performance of that project. It does not matter that money was spent by an assignee not the university; it does not matter that the assignee did its work later, adding to what the university had done–the project is still to create a commercial product, a prescription drug, a “usable technology” and the commercial development “more comprehensively” accomplishes the objective of the project.

One might avoid this outcome in any number of ways. Continue reading

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