AAU, APLU, and others aim to “bolster” federal technology transfer, 7

Frankly, I am weary of working through the HEAs’ nonsense advice to NIST. I expect you are too. Bullshit is so much more difficult to pin down than carefully reasoned discussion. It’s worth respecting carefully reasoned discussion, even if one takes issue with it, if the discussion operates on a willingness to get at the truth of things. Debate can strengthen alternative approaches to research-related innovation. But if folks are just bullshitting for political advantage, then they don’t care about the truth of things, about actual practice–they care about bluffing to whatever they see as their political goals. They might even be successful with their bluffing, but that doesn’t mean they are not prigs. And their bluffing makes it all the more difficult to have a reasoned discussion on matters of public policy.

If all you need to know is that the HEAs are engaged in political bluffery and write bullshit about Bayh-Dole and technology transfer sentence after sentence, then save your time. Go do something with your family.

The HEAs respond to NIST’s request for ideas to improve federal technology transfer with a stump speech about university technology transfer. The HEAs don’t bother even to separate out federally supported work from the rest of their member universities’ activities. Then, after crowing about how great they have been doing and how Bayh-Dole is working as intended and must not be changed, the HEAs bitch and moan about just about everything else–the patent system doesn’t provide them with absolute power to beat down everyone, there’s not enough of other people’s money available to finance their expensive, complicated, and ineffectual system. This is supposed to be helpful advice for the feds regarding federal technology transfer programs?

Someone at NIST will read the HEA missive, I’m sure, and I send them a dose of empathy. Let’s finish up.

Here are the HEAs:

other problems with current invention reporting… requiring our member institutions to deal with widely different reporting requirements of various agencies.

Poor babies! And how many hundreds of other research sponsors do you have with invention reporting requirements? Oh, by the way, federal laboratories don’t have invention reporting requirements and they still have problems with technology transfer. Funny that.

Our associations believe that the Public Health Service (PHS) conflict of interest regulations have … dissuaded some faculty from working with industry to commercialize their ideas…”

Here the HEAs recite a “belief”! Who has believed? When did faceless institutional belief come into existence? Come on–where’s the evidence? We might add–university administrations create their own conflict of interest problems, and use conflict of interest to prevent university faculty from collaborating with industry. In one situation I had to deal with, a university licensing office threatened a software developer with personal conflict of interest for releasing research software open source. Why? “Because in the future that programmer could consult with recipients of the software and get paid to help them, and that’s money that should have been paid for a license.” Take some pills to resist the lunacy and keep reading.

In another research university, administrators got the clever idea of making faculty sign over all their inventions, past and future, as a precondition of seeking approval for otherwise perfectly acceptable consulting work. The invention assignment remained valid even if the consulting request was denied. Wonder if that may have “dissuaded” some faculty from working with industry–for any reason. And let’s not get into the really big issue, which is institutional, not personal, conflict of interest.

with increased globalization, it has become more difficult for our member institutions to find licensees able to comply with the U.S. manufacturing requirement.

The difficulty is compounded by slow or, in some cases, lack of responses by agencies to waiver requests.

This is rich. Bayh-Dole’s preference for United States manufacturing is the centerpiece of the law. According to Bayh-Dole’s own assertion, the manufacturing preference takes precedence over all other provisions in Bayh-Dole. Senator Bayh, in introducing the bill with the text that eventually became Bayh-Dole, promised that Bayh-Dole was a policy instrument that would restore U.S. international technology competitiveness. But according to the HEAs, the problem with university technology transfer is that the federal agencies cannot waive the US manufacturing requirement expeditiously enough. Bayh-Dole is working as intended, except in its central premise that private ownership of patents on public research results will stimulate U.S. manufacturing and labor. The whole point of the U.S. manufacturing preference is to build up U.S. tech capabilities, not to off shore inventions for the money or convenience or desperate effort to make a failed model of technology transfer look good. Apparently Bayh-Dole would work even better with a uniform waiver system for its central requirement.

Here, again, is another area in which Bayh-Dole encourages private owners of subject inventions to license non-exclusively–there is then no requirement to prefer U.S. manufacturing in exclusive licenses to use or to sell in the U.S.

The Bayh-Dole Act permits agencies to allow contractor employee inventors to retain rights to subject inventions. However, scant guidance on this provision is provided in the NIST implementing regulations (37 CFR 401.9).

There is an apparent lack of guidance because the HEAs and their members refuse to read the law, the standard patent rights clause, and the Supreme Court decision in Stanford v Roche. It’s really simple. I’ll put it here. Bayh-Dole applies only when a patentable invention made with federal support is owned by a party to a federal funding agreement. Bayh-Dole calls such inventions “subject inventions.” Bayh-Dole’s standard patent rights clause includes a requirement not in Bayh-Dole, that the prime contractor–the first party to a federal funding agreement–must require its employees to make a written agreement to protect the government’s interest.

Based on Bayh-Dole’s definition of “funding agreement,”when the prime contractor complies, the prime contractor necessarily makes its employees also parties to the funding agreement, so their inventions, which they own personally, also become subject inventions–but not inventions owned by the prime contractor. Instead, 37 CFR 401.9 is quite clear–treat those inventors as small business contractors with a subset of the provisions in the standard patent rights clause. It’s only difficult to figure out if you don’t read the law, the regulations, and the standard patent rights clause–or you are too clueless to comprehend or too settled into normalized misrepresentation of the law to really want to comprehend.

The simple guidance is that inventors of federally supported inventions are not required to use the patent system nor are they required to assign their inventions to anyone else. Bayh-Dole kicks in with a subset of the standard patent rights clause if an inventor does choose to file a patent application, and kicks in with all provisions of the patent rights clause if an inventor chooses to assign his/her invention to the prime contractor or other party to the funding agreement.

There. But the strange thing is, 37 CFR 401.9 has nothing to do with federal technology transfer. Wrong CFR–the HEAs ought to have their noses in 37 CFR 404–not 401–if they want to help NIST improve federal technology transfer. The subtext in all of this is that the universities want NIST to “provide guidance” that prevents 37 CFR 401.9 from operating other than if a university, having acquired title, decides not to retain that title, and somehow the invention is magically “returned” to the inventors who then may choose to retain it if federal agency regulations permit–which makes no particular sense, but then Bayh-Dole makes no sense anyway as public policy–other than that it provides a patent monopoly pipeline extending from public funding to pharma and patent speculators, mostly in biotech hoping to sell out to pharma, all without public accountability or federal oversight. Bayh-Dole does do that, and is working “as intended.”

successful university technology transfer requires an effective patent system that protects these inventions.

“Protect” here means “exclude all others from use in favor of a monopolist partner.” “Protect” also here means “prevent university faculty and inventors from having the freedom to use their own work outside the university that hosted their research.” “Protect” also means “preempt any public purpose that faculty investigators or federal agencies may have had or used to justify the use of public money in support of a faculty-proposed and led project.” You had no idea that the HEAs used “protect” with such a rich set of meanings.

Let’s just put it out there as a bald assertion: university technology transfer has almost no need for a patent system. Furthermore, the patent system we have is more than adequate for the rare circumstances in which patents might be useful in university technology transfer. Finally, and here read with the emphasis of your choice, even all caps if that helps: universities have no reason to “protect” inventions by using patents to prevent public use.

The HEAs back high drug prices:

A misuse of Bayh-Dole march-in rights to control drug prices, will impede the creation of new drugs by discouraging university and medical school licensees from making the substantial additional investments necessary to take federally funded university-based research from the laboratory to the bedside.

I have no idea what this HEA tirade in favor of high drug prices has to do with NIST’s efforts to improve federal technology transfer. I guess the subtext is that NIST should find ways not to exercise public oversight of the exploitation of patent monopolies on inventions made in federal laboratories. Any effort to prevent the use of patent monopolies on such inventions will “discourage” those private, for-profit invention owners from investing in making commercial products. We won’t even get into the laughable delusion that stuff has to go from laboratory to bedside by means of patent speculators–or that the discoveries we seek even start in the laboratory, rather than in all sorts of other random places, including “the bedside.” A tighter loop on biomedical inventions would be to work with those that are created as close to the “bedside” as possible and avoid if at all possible ever ending up in a laboratory, especially not a university one. Okay, we got that far into the laughable delusion.

But if the scope of applicability of march-in rights is broadened beyond Congress’s original intent…

Ha! March-in has never happened. March-in was designed to preclude public dislike of the patent monopoly pipeline to pharma. March-in procedures were designed not to operate. What does it matter if the scope of march-in were to be broadened? No one has ever marched-in. Not under Bayh-Dole. Not under the NIH IPA program that ran before Bayh-Dole. Not under the Kennedy executive branch patent policy. We are talking feel-good handwaving march-in procedures back to 1963 that have never operated–55 years!–other than as a rhetorical opioid to make it appear that someone would look out for public interests. What do you guys fear?

There is no need to broaden anything in Bayh-Dole to address monopoly pricing of prescription drugs based on subject inventions. There’s 35 USC 200–free competition and enterprise. There’s 35 USC 202(c)(7)(A) and (C) that require assignees–including by exclusive license of all substantial rights in an invention–to use all income earned with respect to a subject invention, less expenses incidental to the administration of subject inventions, be used for specified public purposes. There’s march-in for nonuse at 35 USC 203(a)(1)–the standard for march-in here is failure to achieve practical application, and practical application in turn is defined in 35 USC 201(f) as use with “benefits available to the public on reasonable terms.” That’s clearly a standard that includes price. There’s no point in tagging “on reasonable terms” if any monopolistic price is “reasonable” short of antitrust.

And there’s the broad government license to practice and have practiced at 35 USC 202(c)(5). Practice means “make, use, and sell”–and was expressly defined this way in both the Kennedy and Nixon patent policies, as well as in Exhibit A of the IPA master agreement upon which Bayh-Dole is purportedly based. Because the scope of the government’s rights is established by “subject invention” and not merely by patent claims covering aspects of a subject invention, and because the government’s rights extend not just to research but also to development, and because the government’s rights extend to everyone who must be a party to a federal funding agreement, including those added by “any assignment”–which expressly includes, for nonprofits, assignment of subject inventions (see 35 USC 202(c)(7)(A) again)–the federal government has a right to sell and have sold any subject invention that has been “developed” under an exclusive patent license that has doubled as an assignment of the subject invention for any government purpose. That would take in–arguably–all drugs for which the government is paying and which are based on subject inventions.

If the federal government enforced Bayh-Dole in any of these areas, or acted as it should on the rights reserved to it for practice in the governmental market, prices would come down for prescription drugs based on subject inventions–not by price controls so much as by opening up subject inventions for competitive (and collaborative) development and use.

The HEAs here argue that the federal government should not enforce Bayh-Dole’s public protections or act on the federal government’s rights. Bayh-Dole works as intended when no one enforces the law or acts on the public’s rights. Now, finally, we can see that the HEA speaks the truth but in a twisted way you likely didn’t expect–those drafting Bayh-Dole really did intend to create a patent monopoly pipeline from public funding to private pharma, really did intend Bayh-Dole to allow invention owners to preempt public purposes at will without accountability, and really did intend therefore Bayh-Dole not to be enforceable. Howard Bremer bragged that he helped to make sure that Bayh-Dole’s march-in procedures were designed not to operate. Bayh-Dole is “working as intended.”

It’s just that this intention is for private owners of public research to exploit their ownership for profit without public or governmental interference–that’s the meaning of “public interest” for the HEA argument. The public interest that we should all embrace is for private interests to exploit the public suffering from disease to make as much money as possible–anything else would “discourage” speculators from getting involved in such exploitation.

Gosh, who would have thought that what we most need in matters of public health is to ensure that speculators on the future value of patents should get involved, that we need *their* money to find cures, to prevent illness and injury, to alleviate suffering. Something sure stinks. And even with all that, that public policy of unencumbered private exploitation of patent monopolies on publicly supported research isn’t even effective–it doesn’t work in most areas of research and industry, and even with regard to biotech, pharma, and third-tier patent speculators, it doesn’t work well enough or often enough for  most university technology transfer offices to come close to covering their costs. So even without public oversight, and with ignoring the law, and with complicit do-nothing federal agencies, the dominant university technology transfer approach is still crap. But NIST should learn from this, make the crap model even easier to remain crap, and have federal laboratories emulate it.

The legislative record of Bayh-Dole . . .

Haha. There is virtually no legislative record for Bayh-Dole. There was virtually no debate. Bayh-Dole was passed through a procedural subterfuge in a lame-duck Congress.

…and subsequent statements by Senators Bayh and Dole …

Last I heard statements by retired senators aren’t relevant to the interpretation of a public law. And in Stanford v Roche, the Supreme Court rejected Sen Bayh’s amicus argument. Bayh mispresented the law that had his name attached. His claimed intent didn’t matter to the Supreme Court and doesn’t matter now.

the statute refers to “practical application,” which is defined as providing availability to the public on terms that are “reasonable under the circumstances.”

Wrong. The HEAs cannot even quote Bayh-Dole accurately. Here’s 35 USC 201(f), defining “practical application”:

to manufacture…, to practice.., or to operate; … under such conditions as to establish that the invention is being utilized and that its benefits are … available to the public on reasonable terms.

The phrase “reasonable under the circumstances” isn’t there. “Reasonable under the circumstances” refers to the *march-in* licenses that could be required by the federal government under 35 USC 203(a) (and in some fantasy scenario that has never happened). The HEAs can’t get the law right anywhere. There is no need for Bayh-Dole to include “on reasonable terms” in the definition of practical application if any patent monopoly terms are reasonable. When does such consistent slop become organized, normalized corruption?

As for software running up against conflicts between Bayh-Dole and FAR rights in technical data, here’s the HEAs:

we are not aware of any actual situations where this has occurred, but because Bayh-Dole is a statutory right it probably would trump the FAR clause.

Now here’s a non-problem that has found a home with hand-wringing bureaucrats. Rights in data require delivery and license, not change in title. Bayh-Dole requires the government receive a license to practice and have practiced–make, use, and sell–for or on behalf of the government. This license is consistent with FAR and DFAR technical data and software rights. No wonder it hasn’t come up. But for the HEAs’ hand-wringing bureaucrats to figure it out, they would have to read the FARs, not just cite them expecting their readers to be the same fools they are about it. Advanced Dunning-Kruger syndrome. Bozonet.

net result is confusion in the higher education technology transfer community.

Oh my. Confusion of bozos becomes a negotiating strategy. “Because our bozos are confused because they can’t read laws and regulations, then our advice to NIST is to change the laws and regulations so that any bozo who doesn’t read laws and regulations can make self-serving assumptions. This, argue the HEAs, would be really keen public policy. Please, invite me to do a software talk at AUTM on government rights! I can help. Oh, yeah. I used to do those talks. AUTM doesn’t want that kind of thing anymore. Politicized, self-congratulatory echo chambers tend to be that way.

Measures that focus only on technology transfer; the number of patents, start-ups and/or licenses produced; or overall revenue generated by particular universities do not provide a complete picture of the socioeconomic contributions of university technology transfer.

That is, despite the stated objectives of Bayh-Dole, and it is apparently working as intended, please change the goalposts. Don’t assess university technology transfer based on any expressly stated standards, such as collaboration with between nonprofits and industry, or free competition and enterprise, or practical application. Find something else, that can’t be measured by sounds good. Because university technology transfer is mostly crap–and it would be reassuring to HEAs and their member universities if NIST adopted the same crappy practices so no one would look bad by comparison.

That’s all I can take of the HEAs’ nonsense, fake data and history, hot tears for complications and underfunding, saying Bayh-Dole is working while saying really it’s not–but more government funding will fix all. Universities don’t comply with Bayh-Dole and have adopted a crap model, and the HEAs are clueless about pretty much everything having to do with innovation in research enterprise.

This entry was posted in Bayh-Dole, Bozonet, Technology Transfer and tagged , , , , , , . Bookmark the permalink.