We are working through Howard Bremer’s testimony before a Senate subcommittee with regard to a bill remarkably like what would become Bayh-Dole. The point is to explore how the monopoly meme works in practice. Bremer gives nine principles that ought to govern federal regulation of inventions made in federally supported research.
Four, that the absence of a uniform Government patent policy
has been a serious disincentive to successful technology transfer
from the university to the public and has, in fact, often deprived
the public of the fruits of basic research;
Bremer here insists that a “uniform” policy is lacking and that this lack has “often” deprived the public of the “fruits” of “basic research.” It’s a bizarre claim. First, as Bremer keenly knew, the NIH and NSF had operated the Institutional Patent Agreement program for a decade–the NIH revived the IPA program in 1968, the NSF joined later, and the program was shut down in 1978 as ineffective when Latker attempted to get the program endorsed government wide and was blocked by Congress asking telling questions. The IPA program, in turn, operated under the Kennedy (with later Nixon re-editing) executive branch patent policy. Just about any university or nonprofit that mattered was in the IPA program.
The Department of Defense allowed contractor ownership, following the Kennedy policy. Other agencies–the Department of the Interior, Department of Agriculture–showed substantial public benefits by taking ownership of inventions and developing them to the point that they could be released for commercial production–think new fertilizers and the like. For NASA and DOE, there were statutes that required the federal government to own inventions–the premise was that there was no commercial market for nuclear weapons and space ships, so leaving patent ownership with contractors just meant they could mess with each other in bidding on government contracts. And NASA and DOE had programs to review inventions and allow contractors to own, on a case-by-case basis–again, following the Kennedy patent policy. We could go on.
The upshot is that Purdue Research Foundation had a hissy fit over a delay at the DOE in approving PRF ownership of a DOE-funded invention. That’s what got Sen. Bayh involved. And the pharmaceutical industry had boycotted the development of Public Health Service inventions in the late 1950s and early 1960s over the PHS requirement that inventions made in the area of public health and funded by PHS should be available to all. Bremer makes it appear that all government research inventions are affected, that “often” the public loses out. But to go there is to engage in self-delusion. Look again:
serious disincentive to successful technology transfer from the university to the public
Bremer’s actual argument is that if there’s not a “uniform”–meaning arbitrary–government policy that permits universities to own, then the universities have a “serious disincentive” to “successful technology transfer.” Let’s be plain: “if universities cannot keep ownership of inventions made with federal support that they acquire, then they will not be motivated to deal in patent monopolies.” That much is no doubt true. But other variations are not true: for instance, “if universities cannot keep ownership of inventions, faculty will not publish their research and the public will never know about it.” Or, “if universities cannot keep ownership of inventions, then companies will not develop those inventions, even if useful to them.” Bremer’s claim is, narrowly, that without a patent monopoly to convey, university patent brokers won’t bother. That, too, is true. I’ve heard university TLO directors say as much–that if they were told they had to license an invention non-exclusively, they would refuse to handle it. A common version of this statement circulated at AUTM for years–“a non-exclusive license is just a tax”–with the implication that proper, virtuous public policy with regard to research inventions mandated dealing in a patent monopoly–conveying the patent monopoly to just one company. Again, our monopoly meme controls the background.
Five, that the absence of a uniform Government patent policy
which reflects and supports our system of free enterprise has
helped to put the United States at peril in the world economic
This is nonsense, but it’s clever. Bremer’s assertion is that whatever federal patent policy there is–uniform or otherwise–does not support “our system of free enterprise.” This is very strange–it must all depend on what Bremer’s audience thinks a “system of free enterprise” is. In one version, “free enterprise” would be enabled by a robust public domain–that companies had equal access to the “fruits” of a common orchard of research. In another version, that “free enterprise” would start with inventors taking initiative to develop their inventions, supported by a patent system that expected as a matter of public policy and Constitutional authority that inventors could obtain exclusive rights for limited times in their inventions. In this version of free enterprise, the “vestiture” of inventions with university bureaucrats without regard to their competence or practices–merely because there’s a general and delusional argument that university bureaucrats doing one thing are better than federal government bureaucrats doing another–does not sound at all like “free” enterprise. It sounds like a bureaucrat’s thumb in every innovation pie. The only thing that’s “free” about that is from the bureaucrat’s perspective–every pie is free to receive a thumb.
Bremer’s assertion here–his offer that we self-delude–is that by having a public domain or seeking to create public domain in areas of new basic science, we somehow
put the United States at peril in the world economic scene
Let’s translate, using meme-colored glasses. If universities don’t own inventions outright (“vestiture,” dealing in patent monopolies where inventors and the federal government might deal in public domain or non-exclusive licenses), then the United States will fade to a second-rate economic power. Sen. Bayh made a similar claim when he introduced S. 414, a precursor of Bayh-Dole. It’s a nonsense claim, though–other than for whatever political bluffery it could pull off.
Consider: if the worry is that without university dealing in patent monopolies, companies in other countries can use the scientific results created with federal support, and in their uptake of these results they can then compete against American companies, then the monopoly meme fails. Why should companies in other countries develop anything without patent monopolies when American companies apparently must have these monopolies, and must get them from universities? The monopoly meme argues that companies won’t develop scientific knowledge into production of beneficial products if they don’t have patent monopolies. Yet here is Bremer insisting that foreign companies will do so, just not American companies. The policy response, of course, ought then to make American companies relocate so they can figure out how to develop science into products more quickly, not needing patent monopolies.
Consider it another way: if non-US companies are out-competing US companies globally, then for the monopoly meme to work, American universities will have to file foreign patents–otherwise, all they do with a US patent is block the import of foreign products based on US science. That is, the patent monopoly works to prevent the public from benefiting from US science solely because a foreign company did the development work. Doesn’t that seem bizarre?
Take it another way: if American companies would use that scientific knowledge, that inventive technology, those fruits of basic research without a patent monopoly in hand, but American universities are given a mandate to insist that some one company must accept a patent monopoly as a precondition for anyone having the legal right to use the invention or develop the invention or make a commercial product using the invention, then university attempts to deal in patent monopolies also delays American company access to those inventions.
Take it yet another way: every time a university takes a monopoly position with regard to an invention in basic research, that monopoly position–because it is dedicated to some one future company “partner”–creates a very real incentive for every American company that does not expect to be that exclusive licensee or does not care to deal in that patent monopoly to avoid using that basic research to find ways to circumvent that research, to undermine it, to block its development, to propose alternatives and propose alternative industry roadmaps and to exclude that research from industry standards.
Bremer had no answer for such stuff–did not want to discuss it–preferred that we all engaged in self-delusion that the monopoly meme was the answer to American global economic dominance. Really, it’s nonsense. Even if one runs with AUTM’s bogus numbers (treating all university licensing activity as if it derives from federally funded inventions, allowing for double counting, working with silly definitions, and accepting wildly inflated estimates of economic impact), the impact of university patent monopoly dealing ends up as a rounding error of pretty much every metric of economic activity. Whatever Bremer posited based on the monopoly meme, it hasn’t happened. University licensing outcomes generally run at 1 commercialized invention in 200, and 1 meaningful invention in 1,000 or 2,000–and that’s at the top research universities.
Six, that science has over the years been made increasingly subservient to politics, with decisions being made not on scientific facts but on political opportunity;
While there may be something to the question of how politics and science interact, Bremer’s point here is not relevant to a disposition of ownership in inventions made in research, nor in how in any case an invention might be quickly made available to the public for its use. President Eisenhower, in his Farewell Address in 1961, warned of the risks of allowing science to get caught up in the politics of an elite industrial-government complex. Paul Feyerabend, in Against Method, a compilation of work published in 1975, argued that separation of science and government was more important than separation of church and state. We have had fair warning about such things. But Bremer’s concern is that “political opportunity” has displaced “scientific facts”:
with decisions being made not on scientific facts but on political opportunity
Let’s expand: Bremer asserts that decisions in science have been made based on political opportunity not on scientific facts. Perhaps–but would such a thing have to do with ownership of inventions or the development of inventions into commercial products? Nothing. But then let’s consider the monopoly meme. Perhaps Bremer means by this construction that decisions about invention ownership are being made based on public policy rather than on the evidence Bremer will present regarding the effectiveness of university technology transfer. From the monopoly meme perspective, Bremer’s point then is that decisions about the use of inventions should be made by patent owners motivated by the profit opportunities of monopolies on federally supported work (“scientific facts”) rather than by government officials arguing that the public should have unrestricted access to inventions and everything else made in federally supported basic research (“political opportunity”). Yes, that is a stretch, but that’s what Bremer is up to.
Seven, that the talent of invention must be given the maximum
encouragement by providing the inventor and the process of technology transfer all necessary stimuli to inventive and innovative activity in a free enterprise environment;
Bremer here ascends to a level of abstraction that one can grasp only with the assistance supplied oxygen. Bremer is not talking about inventors working for companies. He’s talking about university faculty working on research projects supported by the federal government that they have proposed and for which they obtain a release from their official university duties to undertake. This is the “free play of free intellects” that Vannevar Bush referred to. Bremer argues that university faculty are not sufficiently encouraged to invent in their research, and that university ownership (“vestiture”–appropriation, conversion, taking, condemnation for a public purpose) of their inventions will provide “maximum” encouragement.
Bremer does not point out that under his system inventors are disenfranchised. Sen. Bayh was adamant that inventors were last in line. The Supreme Court in Stanford v Roche found it troubling that Bayh-Dole had no public protections–and satisfied itself that this lack was because Bayh-Dole applied only after a university had acquired ownership and therefore inventors (and others) had ample opportunity to negotiate the disposition of inventions made with federal support. Instead, Bremer buries them with wording about encouragement and stimuli that applies equally to inventors and “the process of technology transfer.” Weird that an administrative process should respond to stimuli that inventors respond to. Bremer means by “the process of technology transfer” “university administrators” or “patent brokers.”
By “stimuli” Bremer means “sharing royalties with inventors”–and more specifically, “sharing royalties with inventors arising from university administrators doing patent monopoly deals with commercialization “partners” who then exploit their monopoly positions to extract maximum value from the public, especially in areas of public health where individuals are desperate to obtain treatment for diseases and injuries.” Or, bluntly, “to require each inventor to be complicit in whatever university patent brokers do to exploit a patent monopoly.” University faculty should be stimulated and maximally encouraged by the money possible in trading on patent monopolies. If that were true–and in my experience it is *rarely* true–then university faculty would be even *more stimulated to the maximum* if they owned their inventions and could deal directly with companies eager for patent monopolies. Instead of getting a highly unlikely 30% share of a 1% patent royalty and nothing from any other income earned with respect to their inventions, they could get 100% of whatever was there for any deal they might do.
The reality is that compulsory university ownership of faculty inventions stifles interest in those inventions–stifles the “technology transfer process” that flows through instruction, publication, consulting, participation in federal research, internships, and graduation. When a university takes ownership of an invention, no one–not faculty investigators or inventors or collaborators–practice the invention without administrative permission. They cannot go to another university to practice. They cannot go to a company to practice. They cannot start a company and practice. And if university administrators believe that no one can be allowed to practice until a company has been found to take an exclusive license, then no one may practice the invention for a very long time.
Bremer, however, wants people to believe that university faculty and university administrators alike should be motivated by the prospect of lucrative royalties from patent monopolies–his argument is that profit-seeking from within non-profit universities is more important as public policy than whatever else might motivate “the talent of invention” to take up residence in a university and seek federal funding offered in the public interest. That’s what Bremer means by “a free enterprise environment.” It’s not “free” at all–the “uniform” policy that Bremer desires is merely one in which patent brokers can take inventions from inventors with impunity and not have to deal with federal agency officials expressing qualms (“political opportunity”). No–it’s more than that–Bremer wants patent brokers to have the force of federal law to authorize their taking, and wants the “stimuli” of profits for universities and inventors to reduce their and public objections to universities aligning their public missions with private interests exploiting patent monopolies.
Again, if it weren’t for the monopoly meme, Bremer would lose his point. Why would university administrators making inventions available non-exclusively or royalty-free provide “stimuli” to anyone? Well–actually–doing such things can be amazingly stimulating–fame opens up opportunities that the desire for money often forecloses. But Bremer is simply saying in an obtuse way what he did not want to make obvious–that public servants are not adequately motivated by public service and as a matter of public policy they will do better work if they offered money in exchange for being forced to use the patent system to create monopolies that others can exploit as they want–and *that* exploitation stands in for all other public purposes. The public purpose of the research university becomes “to create patent monopolies for exploitation by companies.” That’s what the monopoly meme requires. That’s what Bayh-Dole enables.