I got my start in university technology transfer as a graduate student at the University of Washington. I was working toward a doctorate in literature and interpretation. My dissertation dealt with the representation of text, using medieval manuscripts as a base to show how different representations–facsimile, transcription, critical edition, modernization, translation–led to different patterns of reading and interpretation. A key portion of my work involved developing an in-line markup system similar to SGML that allowed a text to be presented on a display screen various ways just by changing a few settings–this was all before HTML and the Web. Three events in succession caused me to tumble down the rabbit hole of technology transfer, IP, Bayh-Dole, and all the rest.
The first event happened when I was working at the Humanities and Arts Computing Center as a graduate student programmer and coordinator for operations. I was the first employee of the new Center, and dealt with most everything that had to happen–set up computers, manage scheduling, write software, help people learn how to use computers and software, and manage that new Kurzweil trainable optical character reader. One project I took on was designing fonts for specialized alphabets. I had done a Middle English font extension on my own (Apple II based, using the ACE programming environment, to drive my Apple dot matrix printer). Now I developed fonts for Old Church Slavonic, Cyrillic, Turkic, Amharic, and an IPA-based version of Lushootseed. For that–this was before Metafont was widely available–I wrote my own font editor for 24-pin dot matrix printers (the latest thing) and EGA graphic boards (also so cutting edge for consumer computers like the IBM XT and AT). I also wrote code for language drilling (a program called Flash) and developed custom menus for a partially open text editor called PC-Write. Continue reading
University licensing programs appear to have about a 0.5% commercialization rate. That is, of all the assets reported to them which they claim, only 1 in 200 (or less) actually results in a commercial product (without regard to the “success” of that product). This commercialization rate appears to be consistent across the last forty to fifty years of effort, despite changing laws and policies, a huge increase in budget, and a specific focus on “commercialization.” One might say that in terms of commercialization rates, Bayh-Dole has done nothing at all. One might also say that in light of all the other consequences of Bayh-Dole, it has failed as innovation policy, unless the purpose of such a policy is to create new opportunities for patent administrators and patent attorneys. Then Bayh-Dole has been a grand success.
In the late 1960s, Harbridge House, Inc. did an extensive study of federal agency patent practices. It’s well worth the read. One of the issues that the study considered was commercialization rates for contractors with various backgrounds. Here’s the money table, so to speak: Continue reading
Recently, the University of California, in an internal report on its technology transfer program, indicated that its commercialization rate was 0.5%–1 invention in 200 got to the point of a commercial product. There was no indication whether those commercial products were “successful”–that is, became broadly available to the public on reasonable terms. That 0.5% rate is an order of magnitude lower than what was reported for both federal government licensing and for licensing under the IPA program before Bayh-Dole.
In 1969, Willard Marcy of Research Corporation participated in a workshop looking at federal patent policy. Here is his take on Research Corporation’s experience, in response to the question why his organization does not pay a royalty to the government on its licensing of federally supported inventions: Continue reading
If there’s no need for the federal government to make money from patent positions, and the federal government transfers the administration of these patents to universities, then universities also have no need to make money from these patent positions. They may have a need to recover their costs, but beyond that–where is the mandate to make money? where, even, is the authorization to make money-making a primary purpose?
You can see then the deep divide between an option to acquire the government’s administrative interest in patent property–an interest without a money motive–and an acquiescence by the government in a university’s interest in exploiting patent rights however the university may–an interest that, with a sufficiently corrupt or incompetent patent policy, can easily have primarily a money motive.
The issue for those advocating for a uniform federal policy on inventions, then, is whether it is a policy of administration or a policy of acquiescence. The Kennedy patent policy was uniform with regard to contractor equities–if the contractor had the capability and commercial position and was building on existing work, then allow the contractor to own patents. Otherwise, take it case by case but assume the government’s administration of patents is in the public interest unless there’s a good argument otherwise. For the case by case stuff, if the situation changes with regard to the public welfare, then adjust the permissions on the monopoly.
The IPA work-around was also uniform. Continue reading
I have been writing for Research Enterprise now for a little over eight years. In that time, I have posted 850 articles on technology transfer, intellectual property, and research policy.
Here is a map of the main lines of development of this blog. Continue reading
[I have expanded the first section to fill out the difference between acquiring the federal government’s right of ownership in subject inventions and the federal government giving up on having an ownership interest in subject inventions–muddling this distinction is at the heart of the cleverness of Bayh-Dole.]
If a university administrates inventions on behalf of the federal government and the federal government has no profit motive in the administration of its inventions, then the university also should administrate those inventions without a profit motive. This is a very difficult idea for most university patent administrators to wrap their minds around.
Let’s take it slowly. The federal government, in managing inventions, focuses on public welfare, not profits. The federal government needs no financial “incentive” to do the right thing, or to manage public affairs, or to put the welfare of others ahead of its own desire for money. The federal government, if it wants for money has other ways to get it. Licensing patents for profit or suing for infringement are not high on the list.
The federal government, in contracting with universities for research services, can stipulate that any inventions made with its funding be assigned to the federal government. This is simply the freedom to contract that anyone has–the government can make a condition of its funding that patentable inventions made with that funding are deliverables.
Once the government has acquired such an invention, it then may manage that invention in the public interest. Profit for itself is not one of its needs. Continue reading
There are, then, three entry points for the IPA approach re-established by Norm Latker at HEW in 1968. First, an agency may allow a university to acquire rights at the time of contracting at the agency director’s discretion–if doing so is in the public interest. Second, an agency may allow a contractor to acquire rights after an invention has been made, if the invention is not a primary objective of the funding (and, clearly, the agency director has not determined up front that it’s in the public interest for a university to acquire greater rights). Third, given that universities lack both the capability and commercial position to justify holding any patent rights in federal inventions–there is no equity of the contractor–the university must show that it intends to bring an invention to the point of commercial application, or at least practical application–expeditiously and as a result of private initiative that requires “risk capital” and “private initiative.”
The problems for the IPA are two-fold. First, there’s nothing in the Kennedy patent policy that permits a federal agency to make a decision upfront, before any contracting, that all contracts with a university (or other contractor) will permit the university to acquire greater rights. The Kennedy patent policy stipulates either at the time of contracting, or after an invention has been made. The HEW version of the IPA pushes the timing ahead even of any actual contracting. That’s not sanctioned by the Kennedy patent policy. Continue reading
In 1963, President Kennedy created a government-wide federal policy to address when and how federal agencies might consider allowing patent rights to remain with a contractor–any contractor, not just universities, and under any contract–not just procurement but also grants-in-aid or subventions. From a federal public interest point of view, one might see that there is not so much difference between federal contract and grant if the concern is how the public interest is served by monopolies placed in private hands.
The Kennedy patent policy identified four conditions under which federal agencies should take title to inventions made with federal support, one condition under which federal agencies should allow a contractor to retain title, and a case in which a contractor lacked the capability or business position to justify allowing ownership but other factors might permit an agency to release its claim on patent rights–if doing so appeared to be in the public interest. The policy also allowed agencies to permit contractors to have greater rights than otherwise expected, subject to specific restrictions.
The four conditions where the government should take title are when funding: Continue reading
One of the common description of the Bayh-Dole Act is that it established “uniform” federal patent policy:
Enacted on December 12, 1980, the Bayh-Dole Act (P.L. 96-517, Patent and Trademark Act Amendments of 1980) created a uniform patent policy among the many federal agencies that fund research, enabling small businesses and non-profit organizations, including universities, to retain title to inventions made under federally-funded research programs. (AUTM)
To replace these conflicting policies, the Bayh–Dole legislation was introduced to establish, by statutory mandate, a uniform patent transfer system across all federal agencies. (Senator Bayh)
Certainty of title to inventions made under federal funding is perhaps the most important incentive for commercialization. Implementation of uniform patenting and licensing procedures, however, combined with the ability of universities to grant exclusive licenses, are also significant ingredients for success. (COGR)
The University and Small Business Patent Procedures Act of 1980 (commonly referred to as “Bayh-Dole”) created the uniform framework that facilitates orderly and efficient technology transfer from universities and other institutions receiving government research funding to the private sector. (PhRMA)
It’s sort of funny that these descriptions of Bayh-Dole agree that something was made “uniform” but can’t quite agree on just what that is. The emphasis on “uniform” goes back to the earliest arguments for Bayh-Dole–and before that, to the arguments for a template Institutional Patent Agreement that could be used by all federal agencies. The IPA approach was essentially a federal master agreement that worked around certain requirements of the Kennedy statement on government patent policy, which with some later modifications, governed executive branch federal agencies in their treatment of patentable inventions until Bayh-Dole displaced it.
The Kennedy patent policy was based on diversity and flexibility. Continue reading
In July, Setareh Samii published “The Importance of the Bayh-Dole Act” at The Catalyst, a web site operated by PhRMA. Samii argues that Bayh-Dole “created a framework for technology transfer that helped rejuvenate the American economy.” Samii then proceeds to retell–without any credible evidence–a story about how before Bayh-Dole, the problem that worried the federal government was commercialization of federally supported research at universities. There apparently wasn’t any similar worry about work done in the federal government’s own labs. But actually, while those advocating for Bayh-Dole made lack of innovation a premise of the proposing the law, they never were able to make a connection between innovation and their law. What’s more, the “commercialization rate” under the IPA program was just under 5%–about what the advocates claimed the federal government rate was. And the government wasn’t trying to “commercialize” inventions made with public funds, at least not by creating private monopolies.
The working premise of federal invention management was that there were multiple ways by which discoveries might come to be used by the American public. The expectation was that inventions made with federal support, like other findings, when published were dedicated to the public domain. Such inventions, if patented, were published as well in the patent literature and could be made available under non-exclusive license when additional restrictions might be required, such as, say, not blocking future research with patents on improvements or conformance to a standard or maintaining a consistent quality. Given that much HEW funding for university research involved matters of public health, the working premise of federal invention management also argued that the government should not be in the business of setting up private monopolies to exploit public health needs. There ought not to be a government-assisted market in the relief of suffering.
Oddly, however, this premise is nearly exactly opposed to what the pharma industry is all about. That’s a basic disagreement. Continue reading