We are working through some testimony from 1979 by a federal patent attorney, R. Tenney Johnson, before a Senate subcommittee considering a federal government invention policy bill that was a rival to Bayh-Dole (and strikingly similar, and didn’t pass).
Johnson presents a “personal feeling” about patents, perhaps based on being a federal patent attorney:
Again, taken carefully, who could argue–Johnson does not say that patents work best in private hands, but rather “patent incentives” work best. Well, of course. That’s because the federal government has no need of the “incentive” of monopoly control in order to publish an invention for all to use–especially an invention directed at matters of, say, public health. And then the crushing blow to Johnson’s argument: most federally supported inventions aren’t worth the bother of the paperwork to take title. Staggering. If the inventions aren’t worth the bother of the paperwork, then why would any private hands bother with filing patent applications? The primary motivations would be for mischief–to speculate on the value of withholding inventions from use (patent trolling) or to pile up the appearance of intangible assets to plump a sale of the company (so someone else might “monetize” the patents via trolling) and to disrupt competitors who might otherwise use the inventions and instead must design around.
We might take Johnson’s argument a different direction. Most patentable inventions aren’t worth patenting–regardless of whose hands they are in. If that’s the case, then why should the government arbitrarily leave such inventions to the whims of federal contractors–and especially to nonprofit contractors who might have the greatest reasons to make mischief through trolling, attracting speculators, and otherwise trying to raise the “value” of an invention by exploiting patent monopolies however they might best pay?
Johnson may be spot on that most patentable inventions aren’t worth patenting, but consider a different use for the patent system–a federal and nonprofit use. A Department of Defense official testified that many defense contractors had declined to seek patents on federally funded military inventions, and that the government took out patents as a “defensive” measure–it’s not clear exactly what the “defense” involved, but there it is. The effect of such patenting is to file inventions as prior art within the patent literature, where they are readily identifiable. That in turn expands the prior art, raising the bar for subsequent patenting, improving the quality of later patents. Apparently such things don’t matter. Improving quality of patents might lower the number of patents, and if the number of patents is the adopted proxy for innovation (silly as it is), then reducing the number of patents so that higher quality patents issue would appear to thwart innovation itself. After all, if a silly proxy for innovation declines, then innovation itself must be affected. That’s how these folks operate.
Senator Schmidt asks Johnson to consider various criterion in the draft bill under which the federal government might take title. Here’s Johnson on “exceptional circumstances”:
In exceptional circumstances, the government could assert a right to acquire title to patentable inventions. Johnson is wrong about the Kennedy/Nixon patent policy (and later corrects himself)–that policy makes it an exceptional circumstance not to take title to patentable inventions in matters of public health. Here’s Johnson’s point–to distinguish exceptional circumstances in the present bill “reassures” people “more than it is actually necessary.” That is, Johnson argues that exceptional circumstances provisions aren’t “actually necessary.” Senator Schmidt, however, jumps in to save the point:
Sometimes reassurance is absolutely necessary.
What is the upshot of this exchange? That any apparatus by which the government might take title to inventions made in work with federal support is for appearances, to “reassure” the public–but that it never needs to operate. Instead, Johnson proposes use of march-in–even after making it clear that march-in has never operated. March-in, too, ends up being for appearances, to reassure the public. In Johnson’s presentation, neither government title nor government march-in matters, other than for appearances.
And this is exactly what has happened with Bayh-Dole, the bill that was being considered in parallel with Schmidt’s bill. The exceptional circumstances and march-in procedures are designed to have the appearance of public protections but are also designed at each point to be waived, to be so cumbersome as to be unusable, to be ignored and not enforced. It’s really quite amazing to see it spelled out by R. Tenney Johnson.
If we want to lay the premise out directly, it is that federally supported inventions are best managed by private companies that depend on patent monopolies to justify any investment needed to develop commercial products. Thus, it is expeditious that when a company is a contractor, it should have the first right to take title to any invention. If it does not take title, then the federal government should have the right to take title in order to exclusively license the invention to a company that will commit to developing the invention, and if no company is so willing, then the invention can sit behind the patent right until the patent right expires. The dog doesn’t prevent the horses from eating the hay because no horses are willing, even, to enter the barn. They might be pleased to learn that their government won’t sue them for infringement, but they are not about to commit to creating commercial product and certainly not yoked to a federal patent license.
When it comes to federal contracting, the argument is much the same. The difference is, essentially, that university bureaucracies will be better at getting a horse into the barn than are federal bureaucracies. That’s because (so the reasons have been given) universities are “closer” to the inventors and have a profit motive (to support more research in the public interest, of course). No one bothers with the idea that perhaps for some inventions at least, there are options for faculty inventors other than the university bureaucrat or the federal bureaucrat. Federal and university bureaucrats appear to be in agreement with regard to inventor-loathing. AUTM howls in protest over such things as “free agency” of inventors to decide what to do with any invention. Such howling is odd. The patent system was not created to benefit either form of bureaucrat, but rather was and is focused on the inventor. If one reads too much bureaucratic literature, however, it’s easy to forget about inventors.
So, within the premise that bureaucrats must debate a policy by which inventors have no rights in their inventions, here’s Johnson’s recommendation:
March-in rather than government title, but only for “bad actors”–where someone isn’t developing an invention and yet won’t let others use it. Of course, this is window dressing because Johnson’s primary point is that march-in has never been needed, not since 1963–and remember, Johnson was one of the attorneys who drafted the Kennedy patent policy. Johnson does raise an interest point–that federal agencies should not manage march-in–rather that work should go to a quasi-independent “Patents Board.” What could possibly go wrong with that idea? Nothing, if the assumption is that march-in is just for public reassurance for the possibility of a really bad actor. In fact, a Patents Board would be just the thing–out of reach even of anyone in a given agency who might form an opinion about the behaviors that ought to be called out as “bad dog.”
Behind on it, Johnson states his general belief:
On the face of it, the belief is not grounded in practice. But the belief is framed–it is “in general” or in general for the cases that we all care about and not the rest, and it is a matter of things being “developed” rather than used. In full, “I believe that, for the inventions that matter in this discussion, if ideas are owned by all, no one company will invest the resources necessary to develop the invention into a profitable commercial product.” There’s something oxymoronic about the belief stated in this form. “I believe if that multiple companies collaborate to develop something, no single company will be willing to do so.” Well, yes. There’s also something fully suppressed in the dichotomy. Johnson the patent attorney does not come out and announce it, but it appears to take this form:
I believe, in general, that patentable inventions made available to all will not be used by anyone.
In this form, the belief is not credible. We see standards being used by all, with common “ownership.” We see companies willing to infringe in order to compete–they are ready to develop commercial product even when that product is based on inventions patented by others. We see generic drug companies manufacturing product without a patent monopoly position. We see arguments that if the federal government does not permit the patenting of inventions in its research, why then foreign companies and governments might develop commercial products for free, without paying even their share of the research. In matters of public health, they might produce drugs to help people in their country and ours–without American patent speculators getting a change to take a portion of their profit. And that would be, so the argument appears to go, a huge shame. How could the United States be seen as a leader in innovation if such a situation were permitted, where foreigners could use and develop our research free of charge? But worse, how is it that only United States companies require patent monopolies in order to use federally supported research?
We might then revise Johnson’s belief to read:
I believe, in general, that patentable inventions made available to all will be used only by foreign companies competing successfully against United States companies because no United States company will use any such invention unless it has a patent monopoly.
Yes, I’ve substituted “use” for “develop.” We won’t know what Johnson would have said in response to these variations based on his testimony. But we can see how the Bayh-Dole Act has come to be represented as based on just such non-reasoning rationalizations. There must be patents for research inventions to be used. Research inventions cannot be used, even for research, without patents and commercial development. Research inventions cannot be used by professionals unless they first purchase–some years later if ever–commercial product versions of the inventions. Research inventions cannot form standards, cannot be developed through collaborations by nonprofits, cannot be developed by the federal government or state governments. Research inventions cannot be developed by industry consortia or as industry standards.
“In general” means “none of these other possibilities–and actual practices–counts for anything.” And “developed” means “using private capital focused on a single company’s future profits” with the further premise that “in general” no use of any invention made in research can be used or turned into a commercial product without a huge private investment. These are givens of the bureaucratic debate, because some people have said so. (And, in good lawyerly thinking, have not been rebutted and so must be taken as speaking the only truth allowable in the deliberation.)
We have a law then that takes these premises and converts them into requirements. Now, no research invention can be used prior to becoming a commercial product because the federal government has so arranged it that priority in obtaining a patent monopoly goes to people who insist on making their money by attempting to create a commercial product–even if they never do create such a product, there is good money in drawing salary from other investors who believe they will, and selling out the opportunity to other investors impressed by their attempt. Most research inventions would not become commercial products–not because the inventions aren’t worth even the paperwork–but because their purpose, their role, is not to become commercial products. Their role, to the extent that they are new and useful and not obvious, is to add to our capabilities, to expand as it were our frontiers, even if only of how we conduct research, how we do things for ourselves.
In all of this, it may well be that only for a very few research inventions is there a necessity of creating a patent monopoly to control commercial development, without which no use of the invention can be made at all. For most research inventions, any commercial exploitation will come after research and professional use and internal company use and ad hoc standards have been established. Before such inventions will be developed by any, there must be use by many.
If that’s the case, and my practice experience tells me it is, then the government lawyers have got this whole research innovation discussion bassackwards from the start. They have made an utter mess of Vannevar Bush’s endless frontier, his strategy of skunk works that bring the glorious stink of innovation to established odors. They have assumed that inventors should be disenfranchised and their debate is only about how best to do that; they have adopted the most sketchy of claims regarding how research inventions get used or developed, ignoring vast swaths of history and practice. And yet this is the framework we inherit and are expected to participate in, to attempt to make “successful.” This is the framework that university bureaucrats have adopted without reservation as successful and by extension must be represented as successful or, well, it would suggest that the university bureaucrats had made stupid, damaging decisions, and that cannot be possible.