Patents in Space-1

The Nation, an English-language Pakistani newspaper, published an article on March 11 by Famiya Masood, “Patents in Pakistan” that argues the government must create incentives for university inventors. That much is interesting. But Masood builds her argument using Bayh-Dole as the example, and there she muddies her argument with misrepresentations of the law. I submitted a comment to The Nation‘s web site, but the moderators promptly rejected it. So I will publish it here and add some more comment that might be helpful for any country’s officials think they ought to copy Bayh-Dole. Short answer: don’t be so foolish.

Here’s Masood, describing Bayh-Dole:

Under the Act, Congress attempted to set the incentives straight by giving property rights in the form of patents to the universities that would ensure there was sufficient interest in using the R&D for the creation of invention.

This account of Bayh-Dole is incorrect. See the Supreme Court case Stanford v Roche (2011). Bayh-Dole does not give patent rights in inventions made in federally supported work to the universities that host research. No vesting of rights, no special privilege to acquire rights, no mandate to acquire rights. The claim that Bayh-Dole vests rights with universities was made up by university licensing officers and their attorneys to take rights that should have vested with inventors and with the public.

Despite the funds being provided by the state for an R&D project, universities did not have the incentive to use it to invent since the end product would eventually belong to the party funding the project i.e. the government.

When the US government took title to inventions, it generally released those inventions for all to use–including the inventors, companies, the public. University inventors and other university researchers had *way more* access to those inventions than if each university demands title to each invention, obtains patents, and then holds back permission to use hoping to find a single company to take an exclusive license.

Before Bayh-Dole, the NIH and NSF both ran IPA programs that *required* a nonprofit to take ownership of inventions made in work with agency support whenever the nonprofit decided to file a patent application. But those programs were shut down as ineffective. It may be that in theory universities have an “incentive” to deal in patent rights, but that doesn’t mean they will be effective in doing so. US universities in the Bayh-Dole era have acquired over 120,000 US patents, more than 50,000 of which cite federal funding. But most are unlicensed, and most that are licensed exclusively don’t result in use that meets Bayh-Dole’s definition of practical application.

Finally, consider this: when a country with a relatively small market creates an incentive for university administrators to take patent positions in that country, the country then locks up research results *in that country*. No one can get at those results without a bureaucrat’s permission–not the inventors, not the inventor’s collaborators, not companies in the country, not entrepreneurs. But the rest of the world will have that access unless the universities also try to lock out the rest of the world. They must get patents *everywhere else*. That’s hugely expensive and even then mostly ineffectual. Even if those universities administrators manage to grant an exclusive license to some company–no one else gets access to the research results or has any incentive to use that research, since it is controlled by patents to which they will have no access.

The incentive for university administrators may well be to make money from patent positions any way they can. That means they attract patent speculators that show up looking like venture capital organizations or entrepreneurs. That means they create paper start up companies that they do insider deals with to make it look like there is economic development and innovation when there is only a bureaucratic illusion. Exclusive license doesn’t mean public benefit from research–it means that university administrators have given over public decisions about research results to private actors in exchange for money. We would call that sale of public office or corruption, like a judge allowing a company official to decide a law case in exchange for payment.

But whatever perverse incentives a twisted version of Bayh-Dole might give to university administrators, the incentives for anyone not getting a payoff from a patent position runs against use of the inventive research results. Everyone who is excluded by the patent has an incentive to avoid the research, to design around it, to make it obsolete, to block it. Other than the illusions of administrators that they can control an innovation economy by taking patent positions and picking winners for institutional profit, why would anyone think that in a university research environment, the folks needing incentives based in national law would be patent bureaucrats?

 

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