The effect of eliminating Bayh-Dole invention reporting

The invention reporting requirement is fussy bureaucracy as it is presently practiced. Federal agencies appear to do nothing with the information reported other than to run up costs at taxpayer expense to receive the information. Nothing meaningful happens as a result, not for the practical application of inventions, not for free competition, not for American industry and labor, not for government practicing and having practiced any subject inventions. The invention reporting requirement is just a tax on innovation to bloat university administrations and federal agencies alike. Call it the beer of the Moloch state. Moloch beer.

Getting compliance with subject invention reporting is no easy task. First, one has to audit all university inventions–not just the ones that universities claim, but also those that people working at a university claim privately. I’ve seen university faculty with way more private inventions than ones disclosed to the university. Second, one has to establish whether any given invention was made in performance of work funded in least in part with federal money under a funding agreement. It would all be so much easier if government rights were restricted to stated invention deliverables, either in the request for proposals (procurement) or request for support (subvention). Beyond that, what should the government care? (There are reasons why a government should care, but (sigh)).

If subject invention reporting were dropped, nothing but bureaucracy would change. Bayh-Dole’s public covenant is virtue-signaling without substance. Nothing of substance is enforced in the standard patent rights clause. Bayh-Dole’s only reason for being–despite all the garbage thrown around by its advocates–is the one thing they refuse to mention: to pipeline federally funded research as patent monopolies to the pharmaceutical industry and to venture investors hoping to sell their companies to the biomedical industry. Bayh-Dole sets it up so that even if universities choose not to deal in patent monopolies on publicly funded inventions, the federal agencies–and especially the NIH–are authorized to do so.

Essentially Bayh-Dole sets up a second shadow patent system right in the middle of the legitimate patent system. The legitimate patent system issues patents to inventors based on the merit of their inventions and their request for exclusive rights in exchange for full publication of their inventions. The shadow patent system purports to take inventions from inventors and authorizes institutions and federal agencies to obtain patents and in effect re-issue these patents to their favorite companies, to be exploited as if there had been no public funding of any research along the way. That public funding is turned into a welfare system, a subsidy for the pharmaceutical and allied biomedical “industry”–but not collectively as usage might indicate, but company, by company, with universities and federal agencies choosing their favorites. In this practice Bayh-Dole revives the abusive patent practices that the legitimate patent system was designed into the Constitution to eliminate.

The public benefit, we are told by practice, arising from Bayh-Dole is the existence of patent monopolies on therapeutic agents that show a benefit in treating disease. Our glory as a nation is that Bayh-Dole permits pharmaceutical companies to charge monopoly prices and to prevent competition–not only in making and selling a given drug, but in developing any member of the class of compounds of which the drug is a member–hundreds to thousands or more of related compounds are prevented from development by the same patent that jacks the price and prevents direct competition. The public benefit is the availability of patent medicines. Our happiness in annual prices running over $100,000 a year for treatment is that university administrators might get 1% of a portion of the profits to squander on themselves. Think about it–when was the last time a university reported how it used royalty income from the monopoly licensing of subject inventions in any way that benefited the public. Yeah, like never.

So that’s Bayh-Dole. A pipeline to pharma that turns the billions in federally supported research into a subsidy for speculators, with university administrators happy to be complicit. Subject invention reporting is just one more empty requirement to make it appear that there’s public oversight, when there’s nothing of the sort. Just appearances for the sake of defending the pipeline. This all becomes painfully evident when an organization like KEI, armed with a command of the Bayh-Dole Act’s requirements, finds non-compliance and cannot for all the reasoning and evidence in the world get anyone at the NIH to give a rat’s ass.

Maybe that’s because Bayh-Dole is a monster of the NIH’s initiative, created to appease the pharmaceutical industry and prevent another pharma boycott of federally supported research, drafted by Norman Latker, the NIH patent counsel. We might propose that the NIH has been bought and paid for by big pharma, and even if that purchase took place in 1980, Bayh-Dole remains in place to ensure that no one backtracks on the deal.

We can push on Bayh-Dole all we want, but federal agencies won’t enforce the patent rights clause, the patent rights clause is designed to be waivable by the agencies in all substantive elements, there are virtually no remedies for contractor non-compliance, what remedies there are end up in convoluted procedures designed to fail to protect the public, and even if those procedures were to succeed, the outcomes are appealable to the Court of Federal Claims, so whatever public benefit might be desired will be long moot by the time any given case were to resolve. And for all that, Bayh-Dole provides no mechanism by which the public can trigger enforcement. And there’s no protection for inventors or third parties, something the Supreme Court was on the point of finding “deeply troubling.” Well, the justices should have been troubled even more than they were.

Bayh-Dole, if the standard patent rights clause is enforced, from reporting through to the (f)(2) written agreement requirement, might be workable. Faculty inventors would own their inventions free from predatory university practices. They would choose their own way and be personally responsible for their choices. In an enforced Bayh-Dole, faculty inventors can publish and blow patent rights. We could see how that works out. It did fine for the digital computer and the internet. Maybe it’s time that we were rid of “patent medicines.” We have done fine without “patent surgical methods.” We don’t need “patent football defenses.” Universities now hold over 120,000 US utility patents in the Bayh-Dole era, over 50,000 of these come with a federal funding notice. Most are unlicensed, representing a massive bureaucratic paywall that stifles rapid uptake and testing of published research–and undermines university research as a source of innovative energy.

But if the standard patent rights clause will not be enforced, then kill Bayh-Dole. Undo the horror it has visited on university patent policies and faculty freedom of research. Uncouple subvention research support from federal procurement. Deal with nonprofits without any commercial capability and experience entirely differently from companies big or small. Make life as difficult as possible for the patent broker hoping to deal in federally supported patent monopolies on subvention research. Break up the patent right or keep the fug out of the way.

Mostly then we have to start with killing Bayh-Dole. Then we have a ton of work to do to chase out the Moloch state bureaucrats and their gawd-awful university patent policies. What would it be like to return to a modest state of intellectual (property) freedom? We might enlarge the public domain, build robust technology commons, resist patent monopolies that try to interfere in cumulative technology development and standards formation, and generally get on with innovation without a bureaucrat’s thumb in every deal trying to divert value to pharmaceutical buddies. Hey, even some inventors might get wealthy. That would be a good thing, too.

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