The Special Case Keeps Giving

Here is the special case university research invention. I have expanded it to show the logic. A special case invention is one that

  • cannot be used without “development” and
  • the “development” involves substantial effort at private expense and
  • the “development” itself is not patentable or readily protected by trade secret and thus
  • the “development” can be copied relatively easily once it has been done and thus
  • the patent on the invention is the only “protection” for the “investment” in
    the “development” and
  • the “development” must be undertaken by a single, private “investor”
  • the “investment” must have a prospect for upside return as good or better than other “investments” competing for the “investor’s” attention.

University administrators and Bayh-Dole advocates claim this special case is the general case for inventions made at universities. What can we say? These people are clueless. But it’s worse. They are intentionally clueless. They are passionately clueless. It is malpractice. If what they did actually mattered, they would be run out of town for incompetence and worse. But luckily, the economic impact and public benefit of university “technology transfer” rounds to about zero–even with the preposterous, unfounded claims treated as fact, produced from a half-arsed, unvalidated economic “model” that takes irrelevant information as inputs, makes unfounded assumptions, and produces a big number. That big number, in the context of the nation’s economy rounds to about zero. Even their attempts at deception round to zero. Otherwise, we would be hosed. Oh, wait–perhaps we are hosed anyway, except the bureaucratic strangulation of new ideas requires a generation of investigators to be disenfranchised from the responsibility for the care of their research results before we see what’s been done.

We can consider each element of the special case. No one needs to, really, here’s the documentary trail, since you won’t find many university licensing operations or law firms hanging on to them mapping this stuff out. Their livelihoods depend on the deception, not on the reality. 

Further development. If an invention can be used without further development, then it is not part of the special case. Research methods and devices, for instance, can be used without the creation of a commercial product version. Most inventions directed at research tools, therefore, cannot be special case because they are already in use in the research labs that have developed them, and anyone else with comparable resources can also put them to use. It is irrelevant whether such inventions might require “development” to become commercial products. It is strange to argue that such inventions should be withheld from research use so that someone maybe can profitably sell researchers a commercial version of the invention, years later–and that this commercial version should have the form of a monopoly to maximize the income to the company and licensing university involved. No, not just strange–it’s malfeasance.

Substantial effort and expense. If the “development” of an invention does not require substantial effort or expense, then again most anyone can “develop” the invention any time they want to. Furthermore, even if substantial expense is involved, governments and nonprofit foundations and even donations from the general public may pay that expense–without expecting anything in return other than to make the invention usable. Anyone willing to undertake the substantial effort to make the invention usable without expecting a “return” for doing so moves the invention outside the special case. If the only people willing to “develop” the invention require their contributions to be in the form of an “investment” for which they must have the prospect not merely of recovering their “investment” but also the prospect that they will make more profit from this opportunity than from other, competing opportunities to make money.

Think about it. If an invention does require substantial effort and expense to “develop” before it can be used at all, then the present dominant university technology transfer policy is to force the invention to be developed at private, monopoly expense or not at all. Even if we separated inventions requiring substantial effort and expense to develop into those that could be developed collaboratively or with funding that did not take the form of speculative investment for profit, and those that could only be developed by a single source of “investment” funding which requires a monopoly return on the “investment” for the entire life of a patent, university practice would ignore the first category and hand all those inventions to the speculative investors, too. Either speculative investors take up such development, or no one gets the invention. 

Here’s Stanford’s OTL FAQ statement on the matter:

University inventions are typically in the very early stages of development and require a significant investment before bringing a product to market.

This statement captures most of the key elements of the special case, as if it is the general (“typical”) case. “Very early stages,” “development,” “require,”  “significant investment,” “investment,” “product to market.”

Intellectual property protection often provides the necessary incentive for a company to pursue such a project.

“Intellectual property” (meaning “patent” here), “protection” (meaning, monopoly controlled by a licensee or assignee of rights), “necessary,” “incentive.” What “requires” the investment? What requires investment rather than other approaches to funding? What makes an incentivenecessary? It is not IP “protecting” an invention that offers the incentive–it is that a monopoly might generate a better upside than would either competition or collaboration.

According to Stanford, stated as a matter of fact, university inventions are “typically” “very early stage” as if this is the general case, not a special case. Notice too the “University” used as an adjective–as if all the inventions that might be made by people associated with a university (or at least at Stanford) can form a class having uniform or typical properties other than that the university claims to own them all. “Typically” is not a statement of fact here–it is an assertion of practice. “We manage inventions so that they must require “a significant investment” before they can be used. Stanford here asserts: “We typically patent inventions to serve wealthy gamblers.” “We patent inventions to prevent them from being used immediately or developed collaboratively or developed with funding that does not take the form of investment or, even if an investment is required, that investment does not require monopoly returns on that investment–none of that is allowed.”

Make up whatever excuses you want for this move. Say, speculative investment will produce a commercial product more quickly (even if a commercial product isn’t necessary or even if the time difference is insignificant or even if competitive development might have a greater chance of success than development under a monopoly license). Or that speculative investment will pay more for the patent rights (even if patent rights aren’t necessary in the alternative, or do not carry the value of the invention). The reality is, university administrators reserve patent rights for monopoly speculative investment, regardless of the condition of the invention.

They seek to attract speculative monopolist investors to university patents over other possible users, collaborators, or developers of any given investment. Rather than providing to those speculative monopolist investors only those handful of inventions that really are special case, they make the special case general and push all inventions through bureaucratic procedures designed for the special case. The effect is to seal off university-hosted inventions (even non-inventive inventions) from any form of use or development but for monopoly speculative investment. University administrators run casinos for wealthy gamblers. They argue that their casinos are the engine of American innovation. What are they smoking? No–they don’t smoke anything. They are complicit all on their ownsome.

Development not patentable. In the general case, all inventions require development. But if “developments” are themselves patentable, then all a company or investor needs is a brief period of secrecy to make the next set of developments, patent these, and use these new patents to create a commercial monopoly position in the developed invention. The company does not need a monopoly on the original invention to have a commercial monopoly position unless the development work is so insubstantial that no further inventing is necessary, no non-obvious methods or materials are used (and held as trade secrets). If the development isn’t patentable or holdable as a trade secret, then the development isn’t meaningful as a concept. Most methods–algorithms in software, for instance–don’t require “development.”

The purpose of the patent is not to support “development” that takes substantial effort and expense–it is to prevent any competing “development” that would go a different direction, for other applications, with other variations. That is, if “development” is itself patentable, then that is where the “protection” of one’s investment comes about. If “development” is not patentable (such as, gathering clinical trial data for a drug candidate), then the patent on the original invention has the effect of preventing anyone else from using that same “development” work for their own implementation of the invention. Of course, if the argument is true that no one will ever invest in developing an invention unless they have monopoly rights to it, then once someone is developing an invention, no one else would ever bother to compete–the new entrant would not have a monopoly and so wouldn’t have any interest in the investment. I know, this is all so stupid-silly, but it’s where university patent policy is. If people would invest in development even if there’s already one company trying to develop an invention, then the argument that a monopoly is necessary to attract investment fails. The actual argument, then, is that a monopoly is necessary to attract investors who don’t want competition and do not plan to develop an invention by further invention.  

Easy to copy once developed. Patent in the original invention the only “protection” for the development. Again, work the logic. We are dealing with that rare set of inventions that cannot be used without a commercial product version. (Think: prescription drugs. Think: is there anything else? Things that have to go through an expensive regulatory review?) Further, these inventions must be “developed.” And the “developments” are not themselves inventive (and so, testing and adjusting things to create the right balance of usefulness and safety and corner-cutting for profitability). Testing and adjusting are important elements in the development of any invention, whether for general use or to make a commercial product version. But now we get to the issue of “easy to copy.” Perhaps “copy” isn’t quite the right word–also easy to replicate the functionality, also easy to compete with by creating a version having a different feature set or built into a different first application.

The original patent, licensed as a monopoly, excludes others from competing with alternative “developed” versions of the invention where the developments are themselves not patentable stuff. The original patent prevents diversification of an invention; prevents participation of the invention in a standard; prevents collaboration and cross-licensing to create new technology platforms. If the only thing that stands between invention and public use is a regulatory process of demonstrating efficacy and safety, then the patent on the original invention prevents others from moving through the regulatory process and from using any information submitted first in that regulatory process. The original patent does not “protect” the original invention–it “protects” access to a regulatory process.

A single private investor. Even with all these other restrictions, the one that is the most consternating is the insistence that a special case invention requires a single source of funding from some person or organization that insists on making an “investment” that has a financial return. In Stanford’s version, this is:

the necessary incentive for a company to pursue such a project

It’s that little “a” that indicates that the purpose of a patent is to trade in a monopoly. The university takes a patent position to offer that patent position to a single company. The company has to have a “necessary incentive” to “pursue such a project”–a monopoly on the invention claimed by the patent in order to justify “developing” a commercial product that’s easy to copy once developed–and for which no other use of the invention is possible.

We are talking about inventions with such sketchy financials and so little public efficacy that the only people willing to consider “developing” them are speculative investors who demand a monopoly on not just the variation and application they choose to develop, but on the entire claimed invention, to exclude anyone from developing other variations or applications.

The research output of the nation is being redirected to technology casinos, for the betting pleasure of professional gamblers, starting with the pharmaceutical industry. Everyone else is required to behave as if they, too, are professional gamblers. This is what is meant by a “uniform” patent policy. This is what Bayh-Dole is designed to enable without making it obvious. It’s just gambling-lust, made law, at the expense of those things that we once thought to value in university-based research–independence from institutional goals, freedom to pursue alternative pathways, reliance on personal choices. To enable gambling-lust, the advocates for Bayh-Dole had to turn casino gambling into an economic virtue, with betting on the future success of patents as the game of the day. Even if we stretched to accept the proposition that casino gambling has its place in an economy, it requires a stretch beyond reason to think that such activity should or must or does drive research-originated innovation.

When someone approves of Bayh-Dole, they endorse the diversion of university research to casino speculation as a general driver of the economy and source of public benefit. It’s laughable, except it is so sad.

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