Fantasy depictions of technology transfer, 3

Despite all this discussion of university fantasy depictions of a technology transfer process, their invocation of the Bayh-Dole Act as their justification, and the reality that actual practice is nowhere like their depictions of process, success, or history, there are a few sobering points yet to make:

1 The patents held by university bureaucrats don’t amount to much. Those patents are no more than a few percent of all the patents in any given area of technology, and patents often reflect only a small portion of the developing art in most any area of technology. We are talking a total of about 55,000 US utility patents owned by universities citing federal funding in the Bayh-Dole era, and about 125,000 university patents overall–out of over 5 million US patents issued during that same time. The “technology transfer process” is a bureaucratic side show, ants at the picnic–only a rea; bother if the food and company is no good. The ants, of course, will advocate then for their right to hang around.

2 Most really new things take a generation to become economically meaningful, much longer than the twenty-year term of a poorly administered university patent. And most university patents are poorly administrated. The patent comes and goes and no one is ready for the new thing that has been claimed. Sure, there are exceptions–and people not interested in business as usual can make a big effort because, say, people will die otherwise–but patenting does not appear to do anything, in general, to speed up adoption of something new, especially in matters of public health. If a big effort is needed–not business as usual–then waiting around to see if a patent will issue is simply not part of the effort. In business as usual–as part of a bureaucratic “process,” private risk capital does not come flooding in as blankets in the aftermath of a hurricane for the public good–rather it comes in seeking in patent monopolies a better upside to be found in people’s desperation to escape suffering than an investment might otherwise obtain in people’s desire for entertainment or improved productivity. Why try to make millions from some labor-saving appliance when one might make billions on a drug that keeps tens of thousands of people alive for ten or twenty years, at $100,000 a year? Heck, one can make millions just betting for or against someone else’s efforts to make billions on a drug. What’s a speculator not to like here?

3 Most stuff happens despite the university standard technology transfer process. The desperate, the ignorant, and the sincere might choose to participate in the process, but anyone with anything of immediate value has multiple ways to circumvent the “process”–publishing, withholding publication, leaving the university, passing the idea in consulting, passing the idea via graduation of students, co-developing with others outside the control of the university. Even stuff that undergoes the “process” might succeed only because it is strong enough or lucky enough to become important despite the process, not because of the process. Just because the process is there does not mean that much of anything good happens as a necessary result of the process. Mostly, the process is distraction. If the process was really so excellent, universities would not have had to create policies to force everyone to assign their work to the university. Stuff happens, and university administrators may even play a beneficent role, but the process of technology transfer largely does not figure. For that matter, bureaucratic processes largely do not figure. We do not get more innovation from research because people fill out forms or have their inventions categorized in databases or have non-confidential summaries of their work written or have federal agencies notified that inventions have taken place or patents filed. Just isn’t the case. (Don’t believe me? Go find the evidence for innovation based on faculty research depending on any of these elements of the standard technology transfer “process.” I worked within that environment for over 15 years. No evidence that the process is necessary or even advantageous for innovation. Other things, perhaps. The process, no.)

Many of the reasons for universities to be involved in patent licensing are gone. Early university patenting in biomedical areas was done to control quality and protect the public from false advertising. Those functions are now controlled by federal regulation. Patent licensing to raise money for research not tainted by federal politics–the big thing in the early 1960s–is now moot, as federal funding has swamped out all other forms of university research funding in most universities. There’s plenty of money for research, but for the huge number of people chasing it in preference to any other source of research support. And even patenting to publish new technology through the patent literature is largely useless–patent applications are constructed not to teach an invention but to claim it and are largely unreadable as instruction–they are decipherable by those that would already be in a position to know, and otherwise by attorneys arguing over scope and validity. We don’t much read patents to learn anything except whether we can patent or break a patent.

Even if at one time there was some reason for patenting to lead people to publish rather than hold as a trade secret or die indifferent to whether others learned something new, that’s never been much of a reason for university personnel. They publish and teach anyway–it is what they do. In a sense, the roles are reversed. The indifferent let the university take ownership of inventions and publish through the patent literature, and those that care refuse to participate, either because they wish to avoid the needlessness of the patent system and university administrator involvement or because they care more about their work than any university administrator ever could and they choose to control how their work is owned and deployed and property rights managed. The standard process of university technology transfer wishes us to infer the indifference and incapacity of university faculty and students. It is another political bluff, but one that also damages individuals and their opportunities, even if in petty ways.

For all the fuss, then, we might argue that life goes on, despite university officials and their fantasy bluster about the technology transfer process. If we were to get complacent at this level, we would also become something of the form of happy patsies–life goes on despite bureaucratic nonsense. But there’s something else, too, in which societies taken up by what Matt Ridley calls the Moloch state and Jane Jacobs calls monstrous hybrids and Friedrich Hayek calls the road to serfdom wind down into awfulness. If things do become what we make of our opportunities, then it is important that we unwind the university fantasy depictions of technology transfer. Bayh-Dole is not directly at fault for these fantasies–though it enables them when it shouldn’t were it enforced–no, these fantasies come from another source, a failure of character, a lack of confidence, an inability to deal with unique opportunities, a desire for control, simple happy greed, a naive belief that if an organization is a nonprofit then anything it does to advance its own interest must be in the public interest.

Repealing Bayh-Dole, however, would expose how university administrators and their technology transfer process have suppressed freedom of research and publication, have tied up research discoveries and inventions, and have aligned themselves with biomedical speculators rather than, say, people suffering from disease. People with diseases are just another abstract excuse to try to make money–and a darned good excuse at that, if money is what one wants most, and the way to get it is to sell others on the idea that a patented cure is just around the corner. There is no going back once people have had a taste of the gin. We would also have to repeal Reagan’s Executive Order 12591, which imposed Bayh-Dole practice as matter of executive authority on all federal agencies regardless of the contractor.

But repealing Bayh-Dole would not end the awfulness of university technology transfer policy and practice. We would have to force federally funded work outside such policy and practice. Traditionally, such things are done by a form of “bill of rights” or through protections on markets from such now obscure practices as regrating and forestalling and engrossing. And even that would not disrupt the patent pipeline from federal funding to pharmaceutical companies. For that, we would need to do something quite different, such as remove as patentable subject matter claims on compounds and devices and methods for use in human health, or to remove remedies for patent infringement for such things–the very things that 35 USC 287(c) carves out, presently, as exceptions, so that the “life sciences” industry can exploit patent monopolies on things that would alleviate suffering while working to prevent those things from being used or developed through any other means. Here’s 35 USC 287(c)’s basic statement:

With respect to a medical practitioner’s performance of a medical activity that constitutes an infringement under section 271(a)or (b), the provisions of sections 281 [civil action for infringement], 283 [right to obtain injunctions], 284 [right to damages], and 285 [right to attorney’s fees] shall not apply against the medical practitioner or against a related health care entity with respect to such medical activity.

This provision sounds good until one gets to the definitions and exclusions:

For the purposes of this subsection:

(A) the term “medical activity” means the performance of a medical or surgical procedure on a body, but shall not include (i) the use of a patented machine, manufacture, or composition of matter in violation of such patent, (ii) the practice of a patented use of a composition of matter in violation of such patent, or (iii) the practice of a process in violation of a biotechnology patent.

In other words, there aren’t any remedies for patent infringement for medical activities unless those medical activities infringe patents. Sigh. The devil is not only in the details.


This subsection does not apply to the activities of any person, or employee or agent of such person (regardless of whether such person is a tax exempt organization under section 501(c) of the Internal Revenue Code), who is engaged in the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician’s office), where such activities are:

(A) directly related to the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician’s office), and

(B) regulated under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, or the Clinical Laboratories Improvement Act.

So if one works at a university and the university aims to “commercialize” medical inventions, then the university, by engaging in such “commercial development” (such as conducting clinical trials) brings itself and its medical practitioners within scope of the exclusion–and so exposes them and the university’s use–to a claim of patent infringement.

Bayh-Dole is a well defended fortress of political bluster. It is awful in its way–full of clever tricks to appear in the public interest and baked-in weaknesses to prevent anyone from ever enforcing its provisions in the public interest. But that awfulness is nothing compared to the awfulness of life forced to appear to imitate the art of university standard technology transfer process. Either we disable patent rights in biomedical inventions made with federal support–a return to the Public Health Service policy of the 1950s and 60s without the circumvention of NIH’s IPA program–or we disable the remedies for patent infringement in biomedical inventions generally. Whatever commercial exclusive position there might be would then arise from regulatory clearances rather than from patent exclusion.

Dean Baker, an economist, makes the observation that the federal government could in effect nationalize the development of medicines and as a society we would be hundreds of billions of dollars per year ahead. We could fully fund all the research and development now paid for by the biomedical industry, bring new medicines to the point of practical application, and then allow anyone who so chooses to make and sell those new medicines at whatever profit they might secure, and we would be ahead by hundreds of billions of dollars a year. Yes, speculators might leave biomedical inventions and university administrators would stop trying to do deals with them–but we wouldn’t care, would we?

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