I’ve spent more than a few months now focused on Bayh-Dole and its history. It’s worth taking a moment and summarizing some findings. Perhaps this could be the start of a new guide to the Bayh-Dole Act, told from the point of view of the vanquished and the screwed over.
Bayh-Dole is built on the ruins of public policy that expected the opposite of what Bayh-Dole enables, using much the same terminology, but doing something very different.
If you want to know what Bayh-Dole is all about, here are seven pillars of the law that you won’t find in any university, AUTM, or COGR guide to Bayh-Dole. These pillars are the working intentions and claims that underlie the law. You won’t find any of it expressly in the law itself. That’s part of the design of the law, to open the pathway but to make that pathway obscure with apparatus and politically expedient statements of intention that appear to point the opposite of what’s actually done. I can show you how each bit of the pathway operates, chapter and verse. But you have to have an eye for detail and the ability to think like a patent broker to see most of it.
Seven Pillars of Bayh-Dole
Bayh-Dole’s working premise is that speculative monopoly investment is the driver of research innovation.
Bayh-Dole does everything possible to enforce this premise, obscure other approaches, and efface public protections. Bayh-Dole does not merely reserve the opportunity for speculative monopoly investment when all other approaches have failed to bring a research invention to the point of practical application. Rather, it permits speculative monopoly to suppress all other approaches. To use other approaches is called “a race to the bottom”–meaning, that if one were to dedicate inventions to the public or license them for low (“reasonable”) royalties, so that the public and companies came to expect such behaviors, then universities seeking to maintain monopoly positions would have to give in and also adopt these same public access strategies. Thus, no alternative approaches can be tolerated at universities. The eradication of alternatives takes place under the argument that a university must have a “uniform” patent policy. Thus, if it’s unfair to inventors that their inventions are taken for use in monopoly licensing practices, then it is only fair that the university is equally unfair to all inventors. Bayh-Dole insists that speculative monopoly investment will be–must be–must be presented as being–the driver of research innovation and public benefit.
Bayh-Dole undermines federal policy that the findings of subvention-funded government research should be made broadly available for public use.
In place of public availability of inventions, Bayh-Dole substitutes public availability of commercial products produced under a patent monopoly. Public subvention funding is thus transformed after the fact into a subsidy for speculative investors willing to share the upside of their patent monopolies with the universities that hosted the subvention funded work. The patent monopolies permitted by Bayh-Dole do little to promote public availability of inventions. Inventions reach the public despite Bayh-Dole more often than because of Bayh-Dole. Yes, Bayh-Dole does allow for broad access–but at each point Bayh-Dole also permits monopoly practices, makes it next to impossible for federal agencies to object to those practices or move to correct them, allows federal agencies not to enforce requirements put forward as public protections, and makes it impossible for the public to intervene.
Bayh-Dole announces the principle that for each patentable invention, an institution and a corporation working together should have the opportunity to benefit from a monopoly position in any way short of anti-trust practices.
We might say, “a bureaucrat’s thumb in every innovation pie.” Or we might say that Bayh-Dole argues that university-nominated patent brokers can form monopoly relationships with companies better than can federal government patent brokers. This argument, historically, is false. But worse, there’s nothing to indicate that institutionally held patent monopolies in research settings are desirable, that institutions hosting the research should have a financial interest in patent monopolies even where such monopolies are indicated, and that the use of a patent monopoly should be directed at commercialization to the detriment of research uses, public access, and collaborative (and competitive) development. The result is FOIL technology–fragmented ownership, institutionally licensed, and the licenses on offer are by default exclusive to the point of assignment of the invention.
Bayh-Dole repudiates the observation that innovation and public benefit from federally supported research at nonprofits move through a number of pathways.
These other pathways include publication, graduation, consulting, collaborative research and consortia, standards formation, and non-exclusive royalty-free licensing. But Bayh-Dole obscures these pathways and promotes patenting and licensing, enabling exclusive licensing that preserves patent monopolies. In doing so, Bayh-Dole in effect destroys these other pathways whenever there is a patentable invention, regardless of which pathway might best result in public benefits.
Bayh-Dole was built for the pharmaceutical industry as an end-run around federal policies that expect dedication of research findings to the public.
From the get-go, the industry that has driven the attack on open dissemination of federally supported research results in the biomedical area has been the pharmaceutical industry. Bayh-Dole is just one in a line of efforts to prevent the federal government from making research results generally available. The IPA program as restarted by the NIH was at the heart of this effort to bypass federal policy. When the IPA program was shut down and blocked from becoming government-wide, Bayh-Dole emerged in its place. The extension to all agencies and all funding agreements provides the cover–that a private monopoly approach to research innovation must be available for all federal research, and this approach must come with a minimum of public oversight, so that any exploitation of a patent right is fair game, including preventing use, litigating for infringement, speculating on patent rights without creating commercial product, and licensing to create and benefit from monopoly pricing and for the entire term of the patent.
Bayh-Dole champions the control of federal research inventions (and therefore of many of the outcomes of that research) by private and non-federal institutions.
Bayh-Dole casts its outcomes as better than government institutional control of inventions, while making it appear that the purpose of control is to commercialize inventions rather than to dedicate them to the public. Lost entirely is the role of the investigator in proposing research with the expectation of public dedication of results and the role of the inventor in having rights under the patent system to determine how the patent system might be used to better make results available. As Sen. Bayh had it, the “inventor comes last.” That’s some use of the patent system. As a form of institution-building, Bayh-Dole allows institutions that should be neutral to the research and its outcomes to create unmanageable institutional conflicts of interest, and therefore cannot manage research integrity, cannot report accurately on outcomes of technology transfer and commercialization efforts, and cannot be a trustworthy advisor to the government on matters of research and invention policy.
Bayh-Dole establishes a plantation system for research inventions, using federal subvention funding as the primary subsidy.
Debating Bayh-Dole is a matter of debating the details of how a plantation system works. Inventors are the indentured servants–if not slaves. University administrators are the plantation owners. Corporations are their business partners, taking the raw materials and turning these into products controlled by patent monopolies for the common profit of the plantation owners and the corporations. We may talk about the complexities of the relationships between plantation owners and partnering corporations. We can talk about the wealth created by these transactions. We can debate how profits should be used to expand and improve the plantations. We can evaluate the economic benefits supplied by this system. But in all of that, we have to grapple with the fact that the system is fundamentally immoral and with the additional fact that the system does not even supply the benefits it claims, and its operation comes at a great cost to the activities of science and access by the public to the results of those activities.
As a law that co-opts federal subvention funding for research proposed by university faculty in the public interest, Bayh-Dole has been remarkably effective. Though the law makes it appear that there is a public covenant with regard to subject inventions, in practice all public limitations on posi property rights are ignored, as are all restrictions in the standard patent rights clause. Federal agencies may waive protections and find other protections impossible to enforce. One might describe Bayh-Dole as a do WTF you want law, when it comes to inventions made with federal support. Or one might call Bayh-Dole the “Law that Loots the Commons.”
In this regard, Bayh-Dole has been a wild success. Bayh-Dole has allowed the dismantling of the external agent approach to invention management, which kept universities out of the patent business and allowed them to have a degree of independence. Bayh-Dole has promoted the patenting of any and all research inventions but without any requirement that the institutions doing the taking of invention rights had the policies, capabilities, practices, and outcomes to justify their patenting activities. Bayh-Dole has created an environment in which the prospect of a handful of lucrative exclusive licenses has justified denying access to the vast majority of inventions claimed by university administrations.
Investigator commitments to public science, inventor rights in inventive properties, and public funds provided as grants-in-aid have all been looted to supply an effort to offer monopoly positions to speculative investors. Even if this approach were wildly successful, we might pause to wonder if this is how, as a community, we should live, or whether this is the best use of the patent system when it comes to research supported by public funds. As it is, the approach is disastrously unsuccessful. Very few inventions are “commercialized” in a form that meets the definition of practical application in the law–established use with public benefits on reasonable terms. But if “commercialized” means “caught up in bureaucratic efforts to secure monopoly patent positions, for which it’s fine if most things are never used,” then Bayh-Dole has indeed made a wonderful contribution to the dynamics of university research and to the public. Where would we be if Bayh-Dole had not been so inspired to ensure that university research enterprise could be diverted and looted for the benefit of speculative investors, ones that require private patent monopolies against all other uses and availability, for the life of the patent.
You may be of the opinion, “Yeah, it’s an ugly mess, but sometimes that’s the only way things get done.” The problem is–things aren’t “getting done.” The stuff that makes its way off the plantations is not the only stuff that’s “commercially viable.” And the stuff that is prevented from making its way off the plantation has all sorts of value unrelated to whether it is “early stage” or “commercially viable” or of any interest to monopoly investors. Yes, of course, there is a legitimate role for patents, and even for patent monopolies, in the support of university research findings. But that role we cannot even discuss in the presence of Bayh-Dole thinking.
Bayh-Dole has not lived up to its public promise of sparking innovation from university research. It is used as a scam for skimming value from inventions that otherwise would be used by the public or by industry anyway. It is used as a scam to make the public or industry pay more than it ought for access to publicly supported research. It is a scam for preventing other methods of deploying research inventions and developing these inventions, so that monopoly appears to be the only, first, best, foremost approach, so that “commercialization” must take place in the context of a monopoly investor’s interest, and not, say, building on a pre-competitive commons that establishes a platform of technology, permits common access to that platform, and encourages competitive product development from that platform.