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.

“Congress found that not one drug had been commercialized from NIH funding” cannot be true, given that the NIH had successfully supported numerous drugs that were sold–Cisplatin among them, but also leukemia treatments and vaccines. If Congress “found” otherwise, it is only that Congress was misinformed. Congress, we might note, is only as good as the information provided to it.

“About 28,000 . . . inventions . . . gathered dust.” More nonsense. Most of those inventions were Department of Defense supported inventions–and the DoD had a policy of allowing contractors to take title to inventions. The inventions that DoD collected were the ones that the contractors had passed up. Furthermore, there’s no indication that these inventions “gathered dust.” It’s simply that they were not licensed exclusively, and there was no need, generally to license them non-exclusively–they were simply available for use, should someone find a need. Think of it as a response to Vannevar Bush’s argument in Science the Endless Frontier that government research should be declassified and made available to all. A way to do that is by means of the patent system, which provides a highly visible place in which to publish inventive work. Publication of what otherwise might not be published is the purpose of the patent system. It is publication that promotes the “progress” of the useful arts–the stuff about exclusion for limited times is the inducement to publish, so that after the limited time is up, everyone can practice the invention.

The government, in funding research, negotiated (because it was required to by the Kennedy and later Nixon patent policies) for invention rights as deliverables. In some cases–those involving public health and safety, or where the government was the primary user of the technology (atomic, space), or where the government intended to create the product and then release it for commercial use, the government negotiated for title. Otherwise, if the contractor had a commercial position and capability, then the contractor could keep title and the government took a royalty-free license. There was nothing in any of this in which the government “took” title from “creators”–the would-be creators accepted the conditions of the government funding and agreed to assign their rights to the sponsor–to the government. The government, in turn, chose to use the patent system to publish the inventions, not to exploit a monopoly position in the inventions to generate income to reimburse its research expenditures. Publication in turn made the inventions available to all, to build cumulative technology platforms–to allow the easy mixing and matching of methods, materials, apparatus. Publication in the patent literature also raised the bar for subsequent patenting of inventions. These are perfectly legitimate uses of the patent system. Any patent owner may do the same.

What is further gibberish is the idea that somehow universities have a right to the inventions made with federal support by their faculty and students. Only folks with minds of blue jelly could possibly think such thoughts. The universities have no skin in the game. They release faculty to work on federal projects. They are compensated for the faculty’s time and expenses on those projects. They are compensated for their “indirect” expenses in supporting those projects. They are not employers on those projects, they have no direct use for the inventions made in those projects. They have no rights to those inventions. And yet somehow Bayh-Dole is interpreted to imply that universities do have rights. The Supreme Court whacked that idea down. But it pops up, like an undead mole.

This is not surprising since prior government policies destroyed the intended incentives of the patent system.

The article declines to identify the “intended incentives of the patent system” or how the author has come on secret knowledge of intent that is denied the rest of us. Was an intended incentive of the patent system to strip inventors of their rights in favor of universities that hosted work sponsored by the federal government? How in the name of blue jelly for brains is that an intended incentive of the patent system? How is creating private monopolies to exploit critical public health needs for maximum profit with a subsidy from the federal government an intended incentive of the patent system?

Why does anyone bother with this crap? Why does the University of Rochester leave this crap up on its web site?

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