There’s a meme that has floated around patent management discussions for decades. It goes something like this:
“What is available to all will be used by none.”
Here’s an instance from the National Patent Planning Commission report (c. 1945):
It often happens, however, particularly in new fields, that what is available for exploitation by everyone is undertaken by no one.
Variations include “What is available to all will be developed by none” and “Non-exclusive licensing is just a tax.” There’s never actual data to back up the claim–just the bare assertion, followed by other assertions that doesn’t hold up to any sort of scrutiny, such as it costs way more to “develop” an invention than it costs to pay for research in which inventions are made.
The meme insists that patent monopolies are a necessary pathway to all things good, especially things arising from scientific research. In a way, it is baffling. “That which is new, useful, and non-obvious won’t be used by anyone because others can also use it.” Huh? “A cure for cancer won’t be used unless only one company controls the rights to cure cancer.” Huh? “If there is free competition and enterprise with regard to something new and useful, then no one will develop it.” Huh?
Think about that last one. If no one would develop something available to all, then there wouldn’t be any competition once any one company began development. All the rest would slump their fictitious shoulders and slink away. One wouldn’t even need a patent monopoly at that point. If no one would develop something because someone else was already developing it, then all an inventor would need to do is be the first to develop. For that, trade secret would work as well as anything. Why publish an invention through the patent system for all to inspect when one could keep the invention secret and start development–since, according to the monopoly meme, no one else would ever develop something that was available to all (and thus, available to even one other company, such as the one the inventor creates or chooses). If the monopoly meme were generally true, all one would need would be trade secret and “first mover” status. No one would dare try to imitate. Doesn’t hold up to the laugh test.
Or think about monopolies in the United States relative to the world. If the monopoly meme is to be believed, a patent monopoly on a technology in the United States is sufficient to dissuade anyone anywhere else in the world from not using or developing that technology, no matter how useful. Companies around the world will simply give up on use and development because they would be locked out of the U.S. market and that’s enough to cause them to slink away. The monopoly meme also argues that if U.S. owners of inventions obtain patents in other countries–excluding all use of the invention–then at some point an American company will show up with the requisite commercial products. In a third variation, apparently, the monopoly meme is satisfied if the monopoly is only the U.S. market–even though the rest of the world can practice a given invention freely, as long as there is a patent monopoly available in the U.S., that’s enough to make it attractive for a company to undertake commercial development. If that’s the case, then what about a monopoly only in New York, California, Texas, and Florida? The logic of the monopoly meme clearly doesn’t work–though obviously the rhetoric has.
And think about yet another variation. In this one, the invention is an improvement to a product that a company already has a patent monopoly on. No one can practice the improvement with regard to the product without the company’s permission. Why then is any new patent monopoly necessary to induce the company to also develop the improvement? Put another way, if a company already has a patent monopoly on a product, then how could getting a patent on an improvement be a necessary pre-condition to the company deciding to make the improvement? No. There may be reasons for the company to obtain a patent on the improvement, but those reasons would hardly enter into the calculus of whether to add the improvement.
The reality is: the monopoly meme is goofball.
Despite its goofball status, the monopoly meme ends up doing most of the heavy lifting for the rhetorical bluffing around ownership of inventions made in work receiving federal support. It is the subtext for the “use of the patent system” even though using the patent system does not require anyone to use the patent system to maintain a monopoly. A patent owner can license non-exclusively, can license without charge, can choose not to enforce the patent. Such use of the patent system is not derelict. A patent owner may choose to use the patent system to publish an invention, formally gaining acknowledgement for priority in invention. That acknowledgement may on its own be valuable. A patent owner may use publication through the patent system to raise the bar for future patenting by others, so that other inventions will have to represent a substantial–non-obvious–improvement over what might otherwise be held as, at best, a trade secret. Such a use of the patent system, again, might represent substantial value to a patent owner involved with a rapidly developing area of technology. A patent owner might use a patent position to influence the direction of a standard or to create a commons that provides broad access to a cumulative technology, which in turns opens up business opportunities that otherwise would be foreclosed through fragmentation of rights and incentives to disrupt a line of development that requires contributions from multiple technology developers. That, too, may be more than worth the cost of obtaining a patent.
The monopoly meme, however, disregards all of this. Without a monopoly provided by the patent system, inventions won’t be developed, won’t be used, won’t be turned into commercial products, and the public won’t benefit.
That’s the logic, such as it is. It’s nonsense, but as a rhetorical bluff, it’s pretty good stuff. After all, it has allowed the IPA program and then Bayh-Dole to stultify a trillion dollars of federally supported work over half a century. A tick buried that deep for that long punched into that artery is one hell of a fat bug. Lighting a match to its distended butt won’t be sufficient to make it let go. Despite that reality, let’s play with matches anyway.
Let’s work the meme through Bayh-Dole colored glasses and see what happens. If you want to skip the fun, the monopoly meme even in Bayh-Dole is stupid. Sorry to ruin it for you if you were expecting Bayh-Dole to produce some inspiring insights.
In 1979, the US Senate was considering S. 1215, a bill to reform executive branch policy with regard to inventions made in federally supported work. Had S. 1215 passed, we would have had the “Schmitt Act” rather than Bayh-Dole, which was a competing bill that had already failed to pass in the House. Howard Bremer of the Wisconsin Alumni Research Foundation testified before a Senate subcommittee chaired by Sen. Schmitt. Bremer claims to represent not only WARF but also ACE, COGR, NACUBO, and SUPA (now AUTM). Bremer has been depicted as a “founding father” of the scam that is Bayh-Dole. Bremer worked with Norman Latker to revive the NIH’s IPA program and when the IPA program was shut down a decade later as ineffective and operating contrary to public policy, Bremer teamed up with Latker again to change the public policy by statute–by what became Bayh-Dole.
In his testimony on S. 1215, Bremer lays out “certain strong beliefs which have been amply reinforced by the experience of many years”–in short, the beliefs of patent brokers and university administrators, supported by confirmation bias. Who can argue with beliefs? Let’s have a look at these beliefs through monopoly-meme colored glasses.
One, that the patent system, imperfect though it may be, is the
key to the conversion of scientific knowledge into production benefiting human welfare;
Here we find our meme operating–patenting is the “key” to the conversion of scientific knowledge into production, with a tag about how this production benefits “human welfare.” If the patent system were used to make an invention widely available, then the patent system simply has no particular role in university research work–that work is routinely published and taught and disseminated, not held as trade secrets. Publishing in the patent literature might establish priority–but so does academic publishing. Publishing in the patent literature might confirm something as a patentable invention, but for university technology transfer–instruction in something new–no one cares. Our meme sense tells us that what Bremer means here is that ownership of patents held as monopolies is the “key”. Now look at what the “lock” is:
the conversion of scientific knowledge into production
Production, here, means something like “commercialization” or “productization” or “profiting from technological innovation through manufacturing not merely through suing others for manufacturing, using, or selling.” Our meme asserts that no one will produce a product based on “scientific knowledge” unless it has a patent monopoly to “protect” the investment in making that product. If that’s the case, of course, there is no possibility of infringement by others. If a product won’t be developed without a monopoly, then it is necessarily the case that no one would dare to develop an infringing product in the face of just such a monopoly. If our monopoly meme is true, there cannot be patent trolls because scientific knowledge cannot be converted into production without patent monopolies.
And yes, go ahead and try to weaken the meme–one ends up back with nonexclusive licensing–including what a patent troll seeks–and the patent system isn’t the “key” to anything but securing a piece of someone else’s development efforts–efforts undertaken without the meme’s required patent monopoly.
But there is big business in patent trolling–led by universities, even–where companies are sued for developing and selling products that infringe university patents. The university justification for their suits comes straight from Dr. Strangelove: “Gentlemen, you cannot develop and sell products without a patent monopoly!” Or, expanded, “you must be sued for making our monopoly meme look stupid.” Even Stanford sues Roche because Roche has developed and is selling a successful product without first obtaining an exclusive patent license from Stanford. Damn! And if Stanford offers only a non-exclusive license to Roche, there goes the monopoly meme. And Stanford ought to have known the monopoly meme was stupid–they managed the Cohen-Boyer patents on gene splicing, licensed non-exclusively, and Neils Reimers later explained in an interview that the patents served no purpose with regard to adoption of the technology–people were going to use it, patents or not. While there may have been a purpose other than securing income from the patents (having to do with ad hoc standards and opening up a space for non-blocking improvements), the benefits had nothing to do with moving scientific knowledge into production.
Bremer, at WARF, and in 1979, before Stanford’s Cohen-Boyer licensing work had gotten under way, still basked in the monopoly meme.
the conversion of scientific knowledge into production
Consider a variation–conversion of scientific knowledge into widespread use. How do surgery techniques propagate? Not by means of the patent system, because surgery techniques are not enforceable via patents. Anywhere there’s a method that can be used by anyone with “ordinary skill in the art,” a patent might “protect” the financial interests of the patent owner, but it does next to nothing with regard to adoption and use. Try reading, even, a patent to gain an understanding of the claimed invention–no, a patent document, generally, is not drafted to teach the invention to folks with ordinary skill. Yes, there’s a legal fantasy at work, but don’t get too caught up by that.
We see that Bremer is making a distinction between using scientific knowledge in all sorts of beneficial ways (including production) and forcing the “conversion” of knowledge to “production” by means of an exclusive patent license–that is, a university preserves a patent monopoly on behalf of a company that did not make the invention and did not pay for the research that led to the invention. This is the heart of the monopoly meme in the mouths of university administrators and their patent broker and political associates.
Put as the tautology it is: “if one does not have patents to restrict the conversion of scientific knowledge to production by those companies that are motivated only in the presence of a patent monopoly, then the public will not see any benefit from products developed by those companies from the patented scientific knowledge.” That’s what Bremer meant. What Bremer wanted everyone to believe–to self-delude–was that the patent system was “key” to convert any scientific knowledge into public benefits. Which is nonsense, but not if you self-delude yourself into believing it, because, well, we generally don’t like the thought that we have chosen to believe nonsense.
Two, that, as stated by Chief Judge Markey of the CCPA, no
institution has done so much for so many with so little public and judicial understanding as has the American patent system;
Here’s an account of Judge Markey, “How a rogue appeals court wrecked the patent system.” My pull quote from the article:
No institution is more responsible for the recent explosion of patent litigation in the software industry, the rise of patent trolls, and the proliferation of patent thickets than the United States Court of Appeals for the Federal Circuit.
That’s the use of the patent system that Bremer has caught a glimpse of, where whatever had been done, it should get done with a bureaucrat owner of a patent getting a piece of the action. That is, production ought to come about despite patent monopolies. That’s the working premise of university “technology transfer.” To get a sense of Judge Markey, read this biographical article. Here’s a description of Markey’s work on the CCPA:
On May 3, 1972, President Nixon nominated Howard T. Markey to be the Chief Judge of the U.S. Court of Customs and Patent Appeals. He was confirmed on June 21st, and formally invested a month later by Chief Justice Warren E. Burger. During the ensuing decade, the court’s backlog was brought up to date, to the point that it took only seven months from filing to decision. Moreover, there emerged a coherent doctrine of law in well-written opinions.
From all accounts, Judge Markey was an amazing man who brought order to a court of patent appeals that generally disfavored patent owners. We might say that with a court disfavoring patent owners, there was less need to rely on antitrust law to reign in patent abuses–those abuses were disabled, often, before they could get started. Now, it’s different, and Judge Markey did a quality job in ensuring that the patent system could be used to enforce patents–that is, to ensure that the monopoly meme operated, so far as the validity of patents was concerned. Again, if a the patent system is used merely to claim priority and disseminate a technical account of an invention–and even to support fair, reasonable, non-discriminatory, non-exclusive licensing–there’s not much reason to challenge the validity of a patent. Here, “reasonable” means, in essence, “less than the cost and bother to challenge the validity of a patent.”
Bremer paraphrases Judge Markey to give the impression that the patent system is central. No doubt the patent system has its place. But Markey’s point, even if true, has little to do with the portion of the patent system devoted to the results of federally supported research undertaken in the public interest. And it is just this portion that was being considered in the testimony on Sen. Schmitt’s bill. The monopoly meme then can be recast: “for research undertaken in the public interest, and provided with public funding, the public interest is best served by bureaucrats taking ownership of inventions and using the patent system to enable private parties to exploit patent monopolies for their private gain, with public benefit arising as a consequence of profit-seeking. Consider such an assertion in light of Milton Friedman’s argument that the “social responsibility of business is to increase its profits.” Our monopoly meme follows on this argument by adding that the public’s interest then is best served when businesses increase their profits, and the patent system’s monopolies are “key” to doing so.
As we will see, Bayh-Dole does exactly this–Bayh-Dole preempts all public purposes as represented by “Acts” pertaining to the conduct of research and the allocation of federal funding whenever a “contractor” acquires ownership of a patentable invention made in federally funded work.