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inventions is a really good thing (and then quit complaining about those $100K a year medications), Bayh-Dole should be repealed for all other areas of government research activity.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:

The Bayh-Dole Act, enacted in 1980, provided critical motivation to universities and their faculty members to
take an active role in commercializing technology based on their discoveries.

Total gibberish, other than getting the date right. More specifically, “enacted in 1980 and gutted in 1984.” Universities were already “motivated” to deal with patents–they had patent policies thanks to Archie Palmer’s work in the 1940s to 1960s. They had research foundations and contracts with patent management firms, thanks to Research Corporation and the Wisconsin Alumni Research Foundation setting examples. They had created their own technology licensing operations, following the lead of the University of California, MIT, and Stanford. Universities were already interested in patent licensing before Bayh-Dole–Bayh-Dole didn’t “provide critical motivation” for these things. Furthermore, Bayh-Dole didn’t motivate “faculty members to take an active role.” The effect of Bayh-Dole was to alienate faculty members from their inventions. University patent brokers claimed that Bayh-Dole vested title in faculty inventions with the university outright (or according to any number of hare-brained explanations). The Supreme Court struck down this claim in 2011, but that hasn’t stopped the universities, who now claim that the idea that Bayh-Dole supports must involve such inventor-loathing, and so administrators have implemented sketchy patent policies that demand the assignment of all inventions (defined broadly to include non-inventions) before the inventions are even made. Public universities go further and make it an ethics violation for faculty inventors to attempt to influence the licensing of their inventions–now not their inventions–as that would involve making state actions serve private interests, and of course that cannot be tolerated. How could any of this possibly be understood to motivate faculty members to take an active interest?

No, of course not. What is meant here is code wording for “faculty members have been motivated to take an active interest in the prospects for revenue generation from patent licensing.” This, of course, is what APLU has just denounced in favor of advancing the public good. But it is not what university presidents denounce. Here’s Michael Young, when he was at the University of Washington:

Um, and what managed to creep out of the university, often, uh, often against great odds, uh, really was powerful, uh, but over time universities have begun to understand that the process of doing good, not the process of making money, not even the process of creating jobs—all that is a by-product of a very simple principle, which is what we do in the laboratories, what we do in the research mission of this university is really designed to make the world a better place. But if it stays in the university, uh, it doesn’t accomplish its goal. Our capacity to expand that out and get it into the life of real people is what this is all about. Uh, it doesn’t hurt to have a couple of extra Porsches in the faculty parking lot, I don’t deny that for a moment, but that is never the motivation or the central animating force behind it.

The public good, but nudge-nudge, wink-wink, know what I mean? Meanwhile, his vice provost for “commercialization” created a formal four-year plan to generate so much money from flipping startup companies for equity value that the university would be able to adopt a new “revenue model” for its operations:

3. Generate revenue that significantly exceeds the cost of C4C operations to contribute to a sustainable business model for the University. Start by architecting an interim plan for sustaining UW C4C while building a practice and pipeline of IP that will meet our longer-term revenue objective. Establish an understanding of “total contribution” (e.g. gifts from founders as well as licensing revenue).

With this “note” (bad grammar preserved from the original):

Note: Ordinarily, we might not place emphasize revenue, but in the current fiscal environment, the university must focus on generating sufficient revenue to support its operations and initiatives. Without adequate funding, UW will not be the best anything. Commercialization is one of the few identified potential new sources of badly-needed funding.

While President Young was telling the public that advancing the public good was so much the thing, his own minion was telling the university that revenue generation through commercialization was in fact, more important than ever. What a scam. What deceit. But does the APLU denounce this sort of thing? Of course not.

Back to the APLU’s first point about Bayh-Dole. Nothing in Bayh-Dole requires university ownership of inventions, requires commercialization of inventions, requires exclusive licensing or monopoly formation. These things are not in Bayh-Dole. Bayh-Dole cannot possibly have motivated them. Something else did–but it wasn’t Bayh-Dole. Even if Congress preserves Bayh-Dole, it should act to disable these things done in the name of Bayh-Dole that Congress did not authorize. Insist that the standard patent rights clause not carry any requirements not expressly authorized by Bayh-Dole–so no (f)(2) written agreement requirement to make inventors parties to the funding agreement; no (e) to give universities a license to subject inventions even if they don’t elect to retain title or otherwise screw up; no (g) pertaining to subcontracting. Insist that universities (and their agents) obtain no ownership or financial interest in any invention made with federal support unless the inventors voluntarily offer that ownership or financial interest. Insist that all reporting of subject invention activity to achieve practical application be publicly reported–at least, for each subject invention, the date on which practical application was achieved, and by whom, under what licensing arrangement, if any. Practical application requires public demonstration of use of a subject invention with public benefits available on reasonable terms. For the law to be evaluated, these elements must also be public.

The second Bayh-Dole talking point:

Bayh-Dole has enabled a remarkable expansion of technology commercialization over the past few decades. This law is critical to encouraging faculty and students to generate new start-up companies and it should be preserved.

Again, Bayh-Dole has done nothing to expand “technology commercialization.” In fact, during Bayh-Dole, the university rate of licensing through to commercial product has fallen from a claimed 25% to under 1%–and maybe as low as 0.1% (1 in 1000 inventions). Bayh-Dole has motivated university administrators to claim ownership of everything, to file patents on anything, to accumulate piles of unlicensed patents, awaiting a monopolistic speculator. While APLU advises its members that they “should not deal with patent trolls,” the APLU does not tell its members that they should not be patent trolls themselves. Universities now routinely play the patent troll, but with the moralistic claim that they sue to advance the public good, not for the revenue! But there’s no purpose in suing for infringement, if it is not for the revenue. Oh gawd. In a public good way of thinking, infringement is success. Infringement is invention use. Infringement is another name for the public good. But not for the APLU member universities. Clearly, for them, it is about the revenue, almost always. In those few instances (Oregon, California, Colorado) in which a licensing operation focuses on public good rather than revenue, the people involved are berated for not focusing on the big money and APLU does not come to their defense.

There is nothing in Bayh-Dole that has anything to do with faculty and students starting companies. At best, there is a nebulous reference in Bayh-Dole’s statement of policy (a policy that establishes a property covenant that runs with patents on subject inventions) that the patent system should be used to promote “free competition and enterprise.” How might the law motivate such “free competition and enterprise” if it is used by universities to compel assignment of all inventions to the university, which then insists on licensing patents exclusively. Where is the “free” in that? Where is the “competition” in that? Where can new enterprise arise, but for bureaucratic approvals–which come with a demand for payment. Ah, revenue generation isn’t the goal, of course, but it is a necessary condition or there’s no license to be had.


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