Regulatory Blah-Blah and the Public Interest in Inventions


Look, if two different units of the same company come to you to support research, and the units offer different and conflicting terms for their funding, then you tell them to knock their heads together and figure out just what they are going to do. You don’t take their money and then splutter about the problems. At worst, you take the work from the unit with the more favorable terms, and tell the other unit to figure things out. Well, if the sponsor is the federal government, then perhaps the different agencies might not be able to coordinate their requirements–it might take all sorts of regulatory blah-blah to do that. But then that’s a reality of contracting with regulatory blah-blah. Choose one agency and dance with it. You don’t have to have two dates to every prom.

Even Bayh-Dole, for all the gibberish about “uniform” federal policy, doesn’t actually do that. Bayh-Dole requires the Department of Commerce to come up with standard patent rights clauses, but it doesn’t dictate how many such clauses Commerce can create. In fact, there are at present four patent rights clauses. One for small businesses, one for non-profits, one for inventors, and one for some naval weapons systems. There could just as easily be twenty. Furthermore, Bayh-Dole does not actually require agencies to use any of these clauses. What the law does is make it difficult for an agency to vary from the default clauses. It does this by introducing all sorts of regulatory blah-blah about how determinations of exceptional circumstances can be made–and the same for other such reasons to vary from the default requirements.

The effect of Bayh-Dole’s regulatory blah-blah is to make it difficult for federal agencies to vary from the default patent rights clause even when the public interest would be served by doing so. The need for university patent brokers to bring more than one date to the prom is more important than the prom itself. The changes to a default patent clause that a federal agency might desire could not be made in the time frame in which any particular grant was to be made. Thus, the public interest as determined by a federal agency’s personnel is essentially suspended while giving the appearance that it’s not. Federal agencies can’t be bothered to consider whether a given contractor should have a private monopoly in research results funded by the government. Run with the default.

Even so, if federal agencies did work out how to determine exceptional circumstances–and there are exceptional circumstances all the time–then once again, a university contractor might be faced with two federal agency grants with differing–even conflicting–requirements. The horror, the horror. A university might not get the right to put everything inventive done in the project behind a patent paywall in the hope of attracting a monopoly speculator. Oh, the compliance headaches that would cause, especially if another federal grant were mixed in that would have allowed a university to build that paywall! What confusion!

And yet why is it that university administrators allow the mixing of funds? Why do they insist on taking two quarreling dates to the same prom? Do they have disaster lust? Perhaps.

Bayh-Dole is such an awful piece of work. It should be repealed, if for no other reason than that it induces federal agencies to suspend their interest in the public benefit from access to research results supported by public funds. Bayh-Dole is the Moloch state’s gift to patent brokers and speculators in patent monopolies. It’s a strange, twisted world in which a government finds it is essential to public benefit to ensure by law that research discoveries be locked behind patent paywalls by institutional bureaucrats so that patent brokers and speculators can attempt to profit from a monopoly position. How such a thing could be virtuous, or actually work, is beyond me.

And it is clear that apart from the happy successes of patent brokers (who have many more jobs as a result) and a handful of speculators, 95% of the inventions subjected to Bayh-Dole’s standard nonprofit patent rights clause have never achieved practical application via a university license. I know, the actual data is made a government secret by Bayh-Dole, in a half-assed not really sort of way (violating FOIA). But if I’m wrong–I’m sure I’m not–then how about some university trotting out its actual figures. Over the past 35 years, how many subject inventions have achieved practical application as defined by Bayh-Dole? Out of how many subject inventions total? We can even relax the “on reasonable terms” part of the Bayh-Dole definition of practical application.

There are on the order of 30,000 patents on subject inventions held by universities and related nonprofits–and that suggests perhaps something on the order of 60,000 subject inventions (many for which the university claimed ownership and had to eventually waive its claim, or patent applications were filed but no patent issued, or the invention was simply bumbled away). Have there been even 1,500 instances of practical application? Maybe more like 150? We don’t know–even AUTM does not survey for either subject inventions or practical application. I take that to be a political decision to prevent anyone from actually reviewing university licensing performance.

Let’s be emphatic: there is no evidence that Bayh-Dole has been successful in what people claim it is to do. It is clear that Bayh-Dole has done the thing that it was designed to do–circumvent and disable public policy regarding research inventions that ought to be available to the public and especially ensure that the pharmaceutical industry can obtain monopoly positions on such inventions whenever it suits them. So now we have the federal government willing to sue its own citizens over inventions those citizens paid to support–it’s just that federal agencies, like universities, delegate the litigation to the companies to which they have traded their patent monopolies. Should the federal government be in the business of suing its citizens over research discoveries? Should the federal government have an interest in splitting the upside of an exclusive licensee-assignee doing the suing on behalf of the federal government? I think not. But you can think what you want. Just be sure to own up to your beliefs.

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