I while ago I wrote an article on some suggestions for changing Bayh-Dole. The first suggestion was to add a research “exemption.” The authors–one a former senior university patent administrator from a very big university–were well meaning, and perhaps there ought to be such an exemption, perhaps added to 35 USC 287 as a limitation on the right to sue for infringement. But there’s a bigger problem than that, and without the bigger problem solved, no one will go for a limitation on the rights of patent holders, not even university administrators. And if the bigger problem is solved, then there really isn’t any need to amend Bayh-Dole because, well, the amendment would address a problem that no longer exists.
University ownership of inventions combined with an insistence on “commercialization” is the Jonah on the ship. In Madey v Duke, the court reasoned that university research was commercial in nature given the university interest in making money from research contracts and commercializing the results. Given the court’s observations regarding university “commercial” interest, even if there were a new research exemption in patent law (including Bayh-Dole) for “noncommercial” research, it could not apply to universities that owned inventions and sought to commercialize them or make money from them. You see why. So it is fantasy for university administrators to insist on ownership and commercialization of inventions and then beg to be released from obligations to other patent owners.
Take it a step further. If university administrators really wanted a research exemption for their faculty and students, then they would grant that research exemption to all for every invention the university owned. This never happens. It’s not made formal policy. It is not the subject of a general public patent license that is attached immediately to every invention a university owns. At best, one finds a grudging reservation of rights in exclusive licenses for “educational or non-commercial use”–but that is a reservation of rights, not a grant of rights, and the reservation takes place only when an exclusive license is granted and never before, and then only for those inventions for which an exclusive license is granted. University administrators don’t deserve a research exemption–their own actions betray any standing to argue the point.
And one more thing. A research exemption, as it were, makes little sense for technology transfer. What’s the point of having the freedom to conduct research using an invention patented at another university, if there’s nothing that can be done with the result of that research but for the permission of the patent-holding university? And that university, as standard practice, is looking for an exclusive license. So why would anyone think that this university would grant anyone else a non-exclusive license to practice anything–inventive or otherwise–that comes about from such “exempt” research use? One is merely conducting research that inures to the benefit of another university as patent owner, or if the university has licensed exclusively, to the benefit of that university and its commercial partner (if not assignee of the invention in question). The only research that makes any sense in that situation is research that seeks to design around, undermine, disprove, or make obsolete the patented invention that is subject to the exemption.
You do see the problem. To exempt the research use, one is encouraging others to ruin the patented invention–no wonder university administrators won’t grant a general research exemption–if they hold onto their mania default for exclusive licensing (the monopoly meme hysteria), then granting a general research exemption won’t happen. When at the conference that produced the Nine Points to Consider document, I proposed just such a general exemption, not just for universities and not just for nonprofits but for all who might use a university-owned invention. The licensing administrators of multiple universities rejected the idea out of hand. They wouldn’t even discuss it. Dark lords.
It is not that a research exemption undermines “technology transfer.” It is that a default exclusive license on offer undermines “technology transfer.” Oh, yes, there is that seductive rationale involving the monopoly meme–what is available to all will be used by none–but it is just a stupid meme, not a general truth. If it were true, then no one would ask for a research exemption unless they wanted to be the free helpers of some monopolist interest. And that would put a pretty turn on research in the public interest, wouldn’t it? All technology transfer would have to go through whatever monopolist interest had secured rights to any university invention that had been licensed–or wouldn’t happen at all. It is non-exclusive licensing–fair, reasonable, non-discriminatory, non-exclusive licensing–that enables university technology transfer generally, at least technology transfer that must find a way to survive in the presence of patents.
If university research gets to some public interest result before companies and speculators do, then university administrators, if they were to have any helpful role, would make patents available to all–for research use, a general license; for commercial making and using, a standard deal; for sale, a licensee-exercised option on standard terms. The role of a university getting involved in research discoveries is to expand the early commons against the interests of patent speculators and monopolist interests. Exclusive positions should come later, after a technology has accumulated and become a platform; exclusive positions should involve non-essential claims, not claims essential to the nascent technology. Thus, a better manufacturing process or a follow-on application, not anything core. When a university seeks to derive its income from dealing with a speculator–that the value of the patent is in excluding researchers at other universities from applying for grants or being involved with technology transfer themselves–the university engages in a form of autoimmune disorder, an administrative lupus that attacks university technology transfer while all the while putting on the appearance of being university technology transfer.
If you have followed the argument so far, then consider the problem created by Bayh-Dole. Bayh-Dole permits each federal contractor to preempt the public purposes for which any given allocation of research funding has been made and substitute its own institutional self-interest. In doing so, Bayh-Dole enables the fragmentation of any cumulative technology before it has a chance to accumulate. Carbon nanotubes got split up among scores of universities, each holding on to its petty bit of patent right, ensuring nothing much could happen for twenty years. But the research funding side of the federal apparatus continued on as if nothing had happened–spreads the work around, justifies it as in the public interest as if the results would be published and inventions shared. Mindless. Useless. Living in a fantasy land without accountability. Same for the university researchers taking the money. It doesn’t have to matter to them whether the results are patented–so long as they can publish and get the next grant, they don’t have to care. In many universities–especially public universities–now, there are conflict of interest policies that announce that it is unethical for a university inventor to care. To care would mean attempting to influence a contracting involving the university (if not the state itself) for a personal reason.
Unless a university commits to non-exclusive licensing of any invention it claims from the moment the university claims it, the whole idea of university technology transfer is blown up and replaced with an administrative lupus–an attack on technology transfer for the money or out of the seductive delight of serving the monopoly meme.
Consider the situation one more way. If we take university technology transfer generally, we would expect technology to transfer from every university that has technology to anyone–person, company, nonprofit, government–that wants to use that technology. Every university to any one. That would be a public interest in university technology transfer. Anything that prevented that transfer–generally–would work against the public interest in that transfer.
We can add nuance. Perhaps it is not in the public interest to transfer technology to enemies of the country. Or to transfer technology to people that don’t want it or who would abuse it, such as by making defective product or engaging in false advertising. Perhaps we would wish universities to transfer technology to criminals or to anyone who would disrupt the transfer of the technology to others.
We might also argue that technology does not transfer, necessarily, all by itself. How does anyone who wants to use a new technology find out that it exists? Few companies are willing to go on such a scavenger hunt. And most certainly companies that do want to use a technology are not looking first for a “license.” They are not even looking for a non-confidential summary labeled “technology available for license.” They are not even looking for a patent application. I will go out on a limb. Company folk are looking for someone who knows the new technology thoroughly, can explain it clearly, and is willing to consider the company’s use, and willing to help–immediately and without a bunch of hoo-haw and without having to deal with some gawd-awful licensing process.
Oh, yes, there *are* companies that want the licensing process, but only for them, only exclusively, and often those companies don’t care what the technology is, so long as it appears to be more valuable to them than what the university is asking for a deal. But we are considering here the public interest, not the private interest of any one company and not the self-interest of any one university licensing office.
If we are to maintain the idea that technology transfer in the public interest means from every university with new technology to anyone who wants to use that new technology, then a default position of offering an exclusive license is not in the public interest. Similarly, even restricting non-exclusive license to chosen favorites, or to only a single field of use is not in the public interest. For Steenbock’s vitamin D irradiation invention, it was declared by a court to be antitrust for WARF to refuse to license the invention for use in margarine, “the poor man’s butter.”
If no one would use an invention once it had been licensed once, even non-exclusively, then there would be no need for an exclusive license ever. A sole license–a non-exclusive done once–would be sufficient, and the natural expectation. If an exclusive license were necessary for the first commercial developer to recover its costs of development, then no other company would bother to try, since the second company in, or the third, would have no chance to recover their development costs, either. And if the development costs were truly excessive, then even if some other company cared to try, it would take them so long that by the time they succeeded in developing a competing product, the first company would have had the market to themselves for a decade or more. Again, no need for an exclusive license. Work it however you want–there’s really no rational, public interest reason for offering an exclusive license to make or to use or to sell product based on a university-owned invention.
University exclusive licensing of patented inventions works against the public interest in university technology transfer. Bayh-Dole enables just such an attack on public interest technology transfer by appealing to organizational self-interest, allowing organizational self-interest to preempt public purposes, including public purposes involving access to research discoveries and inventions. In a real way, Bayh-Dole appears to be based on the WARF provincialism–that faculty-led research ought to produce patents that will be used to make money for the university that hosts that research–and make a thousand times more money for those managing the inventions “for” the university. Bremer from WARF worked with Latker at the NIH on the IPA program that end-ran HEW public policy and the Kennedy executive branch patent policy. Bremer worked with Latker on Bayh-Dole and its implementing regulations. WARF is based on a me-first university model. WARF was and is decidedly against public interest technology transfer. Bayh-Dole is just WARF’s vision made patent law.
Preemption of public purposes by private purposes, exclusive licensing, the supremacy of commercialization, connection of patents with a specific university’s financial gain–these are concepts that work against the public interest in technology transfer. They are administrative lupus. A kind of mental disease that infects university administrators, causing them to repeat political bluffery as fact and engage in all sorts of awful attacks on academic freedom, faculty initiative, policies, and even the people who would help them recover.