Sally Pipes has published an op/ed piece at the Wall Street Journal on Bayh-Dole and Gilead, “The Remdesivir Patent Isn’t State Property.” There is so much going on with Pipes’s work. We should take a closer look.
First, the title of the article states a straw man. No one argues that redesivir patents are “state property.” So let’s not bark up that tree with Ms. Pipes. The shape of the article is to undermine the state AGs that have asked the federal government to march-in on redesivir using Bayh-Dole. For that, Pipes argues that:
1) Bayh-Dole has been wildly successful [hasn’t]
2) redesivir is not within scope of Bayh-Dole [is, but in a weird way]
3) march-in isn’t allowed for price [is]
4) Gilead can supply all the drug that’s needed [isn’t, but not relevant–see price].
And more–Pipes’s whole argument is not relevant. Gawd. Do we really have to do this? Okay. Here goes.
Here’s Pipes on Bayh-Dole:
[Bayh-Dole] allows universities and nonprofits that receive federal funding to patent their inventions and license the intellectual property to private firms with the financial capability and know-how to turn them into tangible products.
But this is not the part of Bayh-Dole that matters for remdesivir. The issue is about federal rights via direct funding and to a large company that identified remdesivir as a potential treatment for covid-19 and did the testing to establish efficacy–such as it is. That part of Bayh-Dole has to do with the scope of funding agreements and claims on inventions first actually reduced to practice even “in part” with federal support.
As for Pipes’s description of Bayh-Dole for nonprofits, the abstractions are furious. First, the inventions made in university research are not “their” inventions until the universities go out and acquire them. Even then, those inventions are public inventions–they are special inventions defined as “subject” inventions by Bayh-Dole. That is, these inventions–because a contractor petitioned the government for support under the premise that the work proposed was for the public interest–are subject to the public protections established by Bayh-Dole. So, not “their” in any normal sense of “their.” At best, “inventions they have acquired to hold in trust on behalf of public purposes.”
Next, let’s consider this: “and license the intellectual property to private firms.” But that’s not what is done. Most subject inventions don’t get licensed at all. Those inventions sit behind paywalls waiting for an exclusive licensee that never shows up. Those university patents exclude all others from use of the inventions, even for company research. That’s remarkably unlike the open access the federal government gave to the inventions that it acquired under the Kennedy and Nixon patent policies that Bayh-Dole supplanted for nonprofit and small business federal funding agreements. And most subject inventions (but for NSF cooperative research center work) don’t get licensed to “firms.” The use of the plural makes it sound like each invention gets licensed multiple times. That’s generally not the case. Universities hold out for an exclusive licensee–just one company gets rights, if anyone does. And worse, universities don’t just grant an exclusive license–they assign the subject invention using an exclusive patent license. When a patent holder grants exclusively all substantial rights in an invention–to make, use, and sell–the invention is assigned. The primary tell that there’s an assignment is that the receiving organization has the right to enforce patents on the invention. University template exclusive licenses routinely provide for the “licensee” to enforce patents. These are assignments.
Why does it matter–exclusive license or assignment? Bayh-Dole deals with these very differently. Nonprofits are forbidden to assign subject inventions except to invention management organizations but for federal agency approval and even then the receiving organization must comply with the nonprofit’s patent rights clause. In effect, an assignee becomes a party to the federal funding agreement that applies to the nonprofit, including that prohibition on assigning the invention and the requirement that the nonprofit (and now, the assignee, too) use all income earned with respect to the subject invention for scientific research or education (less only administrative expenses to manage subject inventions). That’s huge. If a university assigns a subject invention to “a private firm,” then that firm must handle that invention like the university must–including the use of income. A firm might want to make a lot of money from its exclusive position, but it cannot book that income as normal profits. It must allocate that income to scientific research and education. “We run up the price because our future research and education is more important than your financial ability to pay while you suffer through your health crisis.”
One more comment on Pipes’s treatment of Bayh-Dole here: universities may license inventions to firms “with the financial capability and know-how to turn them into tangible products.” Nothing in Bayh-Dole sets any requirements on the minimum capability of firms that universities might license to. It goes the other way, really. Non profits are to prefer small businesses for licensing (35 USC 202(c)(7)(D)). And nothing in Bayh-Dole specifies “products.” The stated objective in Bayh-Dole is “utilization” not “products.” The threshold for government intervention is if the utilization does not result in benefits available to the public on reasonable terms or with acceptable availability or with US manufacture (in the case of exclusively licensed inventions in the US).
If we push Pipes’s statement, however, we might ask whether Bayh-Dole permits the withholding of licenses from capable firms altogether (no, it doesn’t) or from all firms but for a favorite (actually, here, the answer ends up being no, also, but it’s a longish argument and though the logic is tight, folks don’t seem to care so I won’t bother with it). The bigger point is that if Bayh-Dole allows nonprofits to license to capable firms, Bayh-Dole also pretty much precludes exclusive licenses cum assignments when multiple firms are ready and willing to take a license.
But all of this is beside the point, because the remdesivir issue doesn’t involve a funding agreement with a university or an exclusive license to Gilead. What a bother.
There’s more this way. We move through it to show how wrong Pipes is–but then she is working as a shill, so we ought not be shocked.
Before Bayh-Dole, the government retained patents for government-funded research and rarely licensed them to private firms.
Not true. The DoD, in particular, allowed contractor ownership. Most of the patents acquired by the federal government were DoD funded inventions in which the contractors had waived their interest in the inventions. Executive branch patent policy from 1962 until Reagan’s Executive Order 12591 in 1987 permitted contractors to own inventions made in federal work if the contractor had capability in a non-governmental market. For others, such as nonprofits and contract research organizations, the contractor could request ownership upon showing that exclusive control over an invention made in public work would better serve the public. The university patent crowd did not like to have to ask, and did not make a persuasive case for better public benefit from their exclusive control and did not like the delays as federal agencies considered their requests. Bayh-Dole is–in part–about providing university patent speculators with immediate access to federally supported inventions without having to show that their exclusive control of patents better serves the public than does open access.
There were four areas where executive branch patent policy required default federal ownership: (1) the federal agency was developing technology for commercial use; (2) research in public health and safety; (3) the government is primary developer and user and exclusive contractor rights would disrupt further government contracting; (4) where a contractor supervised the work of other contractors. In these areas, a contractor–even a for-profit company–had to requires exclusive rights. If it didn’t ask, or was denied, it got rights anyway–just not exclusive rights.
The federal government rarely licensed the inventions it acquired because it did not have to license–as standard practice the government made inventions available by “dedication”–royalty-free, non-exclusively, without conditions. Federal agencies didn’t bother to track who was using any given invention. Everyone had access. No licenses needed. No patent administrators needed. Sucked for patent administrators. One can see why they would lobby for something with much more bureaucratic requirements.
Most discoveries languished in federal labs, which didn’t have the capacity, expertise or incentive to commercialize them.
There’s no basis for Pipes’s claim. Most discoveries “languish” regardless. Languish is a weird term here anyway. But if a discovery is published for open access via the patent system, then in a sense it has not languished at all–it has been fully disclosed to the public in a manner that anyone can gain access to. A patented discovery plus open access is not “in a lab” any longer. It has been made available to all. Oh, yes, there’s also tacit knowledge and a bunch of things that are in researchers’ heads about what to do next, but that doesn’t change with universities owning patents to dish to favorite companies or no-one. Open access, indeed, deals inventors and other researchers in to all have access to these inventions and opportunities to assist others–consulting, starting companies, teaching–all without having to get approval from university patent officials or an exclusive licensee cum owner of their invention.
The Harbridge House report (1968) that studied federal patent practices found that the federal agencies that developed inventions for commercial use had a 100% success rate. The federal agencies did not need to grant licenses in order for companies to use what companies had developed with federal coordination. So Pipes is just plain wrong. She repeats fake history and wants you to believe it.
Federal agencies have the capacity, expertise, and incentive to develop technology to the point of practical application. They have done so in the past, and do so whenever it suits them. They do not have to have all that capacity or expertise internally–they may contract for it wherever it exists. And we don’t have to be all mealy mouthed about “incentive.” The incentive for a federal agency is to provide for the public welfare. If a federal agency no longer has that incentive, then it should stop agencying. But Pipes makes it appear that federal agencies lack some “incentive.” What could she possibly mean? It’s not merely a profit motive–which would be obvious–federal agencies do not shape their work to chase a profit, generally. It would appear Pipes then must mean something more like a “speculative incentive to make way more money from the exploitation of an exclusive position on an invention made in work previously submitted as in the public interest.” Here, buried in Pipes’s fake description of federal patent practice seems to be this bit of truth–yes, truly federal labs lacked a speculative, profit-seeking, price gouging, competition suppressing “incentive.” Pipes’s implicit claim is that Bayh-Dole supplied this “incentive.” Thus–to follow out the logic–anyone who attempts to diminish this “incentive” is bad.
But after Bayh-Dole, innovation flourished. The law is responsible for the development of more than 150 new vaccines and drugs in the past 40 years.
Fake history. There’s no evidence to support Pipes’s claims–either that innovation has “flourished” after Bayh-Dole, or that Bayh-Dole is “responsible” for it. There are studies that attempt to look at “private-public partnerships.” Some of these are hopelessly flawed. For instance, some studies look at patent citations. If a patent cites an article or patent tied to federally funded research, then, so the argument goes, then the invention covered by the patent was the result of federal support. Deep stupid. Patent applications cite literature to demonstrate that the claimed invention was not anticipated by that literature. It’s just the opposite of some forms of academic citation. It may be that some invention has benefitted from stuff published in the past by researchers receiving in part federal support. But that does not mean that the invention is based on that past research–the invention has to represent a non-obvious jump that the past literature does not anticipate because that literature was wrong or taught away from the invention and the like.
Studies looking squarely at Bayh-Dole subject inventions find no more than 7 to 10% of approved drugs are based on a patent citing federal funding. That’s pretty odd, given that federal funding appears to account for 1/3 of health sciences R&D.
The 150–or 200 or 210–as some fake historians have it–drugs is just a hype number from a study that looked at those “public-private partnerships” and made ludicrous assumptions about patent citations. Perhaps this one, from Bentley University. Bayh-Dole is not “responsible” for NIH-funded studies having something to do with the science associated with patented drugs.
Pause. Here’s the deal. If Bayh-Dole is “responsible” for a given drug on the market, it has to be a drug that (1) no one cared to develop (2) but for an exclusive patent position. That is, no government or foundation or donor or patient organization or coalition of companies was willing to step forward and fund development of the drug. Look at the Bayh-Dole requirements on exclusive licensing for federal agencies. An exclusive license must be “necessary”–that is, an invention must be sufficiently mediocre that no-one–not the federal government, not companies, not foundations–have any “incentive” to support development for the public. Or–and this is one alternative–federal agencies, companies, and foundations stand back and insist that even though the invention is quite amazing, a single speculating company should be permitted to undertake development and in return gain the benefit of patent monopoly pricing and the patent-based suppression of related research, development, or use of any part of the claimed invention.
Bayh-Dole can be responsible for mediocre inventions making it to commercial product at monopoly prices, and for great inventions becoming patent monopolies even when no patent monopoly was necessary for use. For the rest–it’s not clear what good if any has come from either (i) Bayh-Dole’s authorization of federal exclusive licensing or (ii) nonprofit/small business exploitation of patents on inventions made in the public interest without showing how such exploitation better serves the public than does open access. No approved drugs having to do with diabetes–one of our most widespread and costly public health diseases–cite federal funding. Why fund prevention and cures when there are billions of dollars in keeping sick people alive as long as they can pay monopoly prices to mitigate their symptoms?
So, Pipes is wrong, is misrepresenting the studies of federally funded science and making it appear these studies are somehow about Bayh-Dole.
Now we get some fantasy garble:
To ensure that federally funded patent-holders licensed their intellectual property to “responsible” private firms, Bayh-Dole gave the government the right to “march in” and allow competitors to use a patented design, under two conditions. Licensees that failed to commercialize the inventions within a reasonable time could see those patents revoked. The government could also appropriate a patent to address “health or safety needs not reasonably satisfied” by the patent holder or licensee.
There’s nothing in Bayh-Dole about “responsible” firms. Nothing requires licensing. No mandate to deal with “private” firms. March-in involves compulsory licensing, no mention of “competitors.” Nothing about “patented designs.” There are four conditions, not two. Commercialization is not a standard. Practical application is. Patents are not revoked in march-in. Licenses are granted, either by the patent holder or the federal government. The government “appropriates” nothing. The government already has the right to make, use, and sell (and have others do these things on its behalf) under a government license, 35 USC 202(c)(4). Garble. Pipes writes slop.
The “responsible firm” premise for march-in is just silly. There is no such requirement on the contractor side. On the federal side, every potential licensee has to submit a “plan.” See 35 USC 209(a)(3) and 209(f). There is no comparable requirement on the contractor side of Bayh-Dole. 35 USC 202(a) simply provides that if a contractor has acquired an invention made in work with federal support, the contractor may choose to keep that invention, subject to the public interest requirements of the law and patent rights clause. There’s no obligation or mandate for a contractor to license any such invention. The standard is “utilization”–along with involving small business, collaboration between nonprofits and companies, free competition, and US manufacturing.
The “march-in” provision of Bayh-Dole (35 USC 203) addresses nonuse and unreasonable use of subject inventions. It has nothing to do with choice of licensee, though licensees may be affected by march-in. 203(a)(1) march-in concerns a failure to achieve “practical application” of a subject invention. Bayh-Dole defines practical application at 35 USC 201(f). Here:
(f) The term “practical application” means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and, in each case, under such conditions as to establish that the invention is being utilized and that its benefits are to the extent permitted by law or Government regulations available to the public on reasonable terms.
Cut through the chatter: “use with benefits available to the public on reasonable terms.”
If a patent holder fails timely to use an invention with benefits available to the public on reasonable terms, the federal government is entitled to march-in. The contractor has agreed that the federal government may march-in. That’s for nonuse. For use without public benefit. For use with public benefit but not on reasonable terms. And reasonable terms, for something on offer to the public, necessarily must include price. “Reasonable” here must be the “reasonable” that Congress intended–and despite the strangeness of considering Congressional. intent, we can exclude the idea that Congress intended “reasonable” to be “whatever a contractor kitted out with a patent decides is what to charge for a medicine.” There would be no reason to add such a “reasonable” to the law, would be mere “fluffery.” Price is in play with remdesivir, if Bayh-Dole applies.
203(a)(2) march-in has to do with “health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees.” 203(a)(2) assumes multiple licensees–that is, non-exclusive licensing. Yet all the Bayh-Dole advocates assume exclusive licensing–and ignore as well exclusive control without licensing, which is what we might expect from small companies and from non-small companies under Reagan’s 1987 extension of Bayh-Dole-like contracting to all federal contractors not covered by Bayh-Dole. “Reasonably satisfied” health needs is more general than “availability” of a drug. A health need is more than just that there is a drug manufactured in sufficient quantity. The drug must also be in the formulation that is needed, with the appropriate delivery mechanism, combined as needed with other medications. And with “reasonable” also comes again price. A health need is not “reasonably satisfied” if the price is not reasonable. We can fuss over “reasonably” here as we can for “reasonable” in practical application. Reasonable availability–what does that mean for a health need in a public health crisis? Is it that “most people who can afford the drug can get it”? Is reasonable merely “whatever suits a company given its investments and expected returns”? Really? Why have “reasonably” at all then?
At the core of it, we can read “reasonably” in one of two ways. In one way, “reasonably” means that a patent holder doesn’t have to meet all health needs–just ones that it can meet using “reasonable” efforts–its normal standards, doesn’t have to do anything heroic in a time of public health needs. In the other way, “reasonably” means that the standard for meeting health needs must be better than what one might do in possession of an ordinary patent position. In this sense, “reasonably” means something more like “what one would expect if the company did not hold a patent, even if the patent has been used to preclude competition. Again, here, one consideration must be price. To “reasonably” satisfy health needs, one prices as if one had competition, as if the medicine was a “generic.” There’s still profit to be had, but now that profit is reasonable markup, not a monopoly mark up. A company may still recover its development costs, but it does so over an extended period of time, not in the first year of sales with subsequent years being pure gravy. In a public health crisis, such behavior would not “reasonably” satisfy a health need. Which form of “reasonably” do you think Congress intended? Pipes would have you believe something like the former–that “reasonably” loosens up the requirement so that any commercially normal behavior with a patent is just fine.
There have been six cases in which activists petitioned the government to employ march-in rights in hopes of reducing drug prices. All six have failed. As the NIH opined in one 2004 case, “The extraordinary remedy of march-in is not an appropriate means of controlling prices.”
Not all six cases concerned price. There is no provision in Bayh-Dole for third party appeals. The Supreme Court in Stanford v Roche found this lack “deeply troubling” but for a restriction of the law to a disposition of rights after a contractor had acquired ownership of a given invention in conventional way. That “deeply troubling” to my mind indicates that there are all sorts of ways that Bayh-Dole can be interpreted in ways that are not constitutional. Vesting ownership with other than inventors is one. A lack of public right of appeal would appear to be another. Howard Bremer, the long-time patent counsel at WARF, bragged that he had to step in to ensure that Bayh-Dole’s march-in procedures were designed not to operate. Given that Norman Latker, patent counsel for the NIH, drafted Bayh-Dole, it may come as no surprise that the NIH refuses to use march-in.
While the NIH leadership may opine that the NIH will not use march-in to address unreasonable pricing, all that means is that the NIH believes it may ignore the public protections under Bayh-Dole. That in itself points to a deeply troubling feature built into Bayh-Dole. Bayh-Dole delegates enforcement of the patent rights clause to each federal agency–but there are no remedies for a federal agency not enforcing the patent rights clause or even for ignoring Bayh-Dole itself. No remedies for federal agencies granting exclusive licenses without meeting the requirements of Bayh-Dole. No remedies for federal agencies deciding not to march-in or deciding to waive US manufacturing requirements, or turning a blind eye to anticompetitive patent practices or nonuse of subject inventions. No mandate to use the government license to practice and have practiced. Nothing. No oversight. No accountability. No right of public appeal. Pretty screwed up law. Pretty screwed up federal agency.
Pipes says the “facts are against” the state AGs petitioning for march-in. It would be good to establish the “facts” first. We can’t do that here–but we can show that Pipes’s arguments don’t do what she claims they do.
First, Gilead’s scientists are entirely responsible for the invention of remdesivir. The predecessor compound that eventually led to remdesivir was initially devised as potential treatment for hepatitis C and respiratory syncytial virus, which is common in children.
Gilead’s scientists are not entirely responsible for the invention of remdesivir. Gilead’s patent claims are directed to those things that Gilead’s scientists have done. But that is not relevant to Bayh-Dole. What is relevant is whether the federal government funded at least “in part” any “conception” (use for coronavirus treatment, say) or “first actual reduction to practice” of the invention (testing for such a use)–and it is clear that the federal government did so by identifying a use–against coronaviruses–and engaging in testing for that use. Pipes admits it:
Later, Gilead collaborated with academic and government institutions to test remdesivir against coronaviruses like SARS and MERS. But the total government expense for research adjacent to remdesivir, about $70 million, is a fraction of the more than $1 billion Gilead has committed to the drug.
As Bayh-Dole’s implementing regulations have it, neither separate accounting nor chronology are not determinative factors in establishing whether an invention is within scope of the law. See 37 CFR 401.1. “Later” then does not dismiss Bayh-Dole’s applicability. Perhaps this is a hard lesson for patent speculators at think tanks and in university administrations.
“Collaborated” here is an abstraction for “took federal money” and allowed federal testing. It does not matter what the amount of federal expenditure has been, nor is the standard the amount that Gilead has spent on testing remdesivir on all the other things that the drug has largely failed at. But for the government’s identification of redesivir as a potential treatment for coronaviruses, Gilead’s expenditures would have been written off. We have funding agreements, and we have testing with non-trivial federal expenditures. That’s enough to establish Bayh-Dole applies, and that any invention within its scope becomes a subject invention–regardless of when patents for some aspect or another of the invention have issued.
If one wanted to press the issue on the scope of Bayh-Dole, here’s the thing. Federal funding to Gilead is not a Bayh-Dole matter. Gilead is not a small company or a nonprofit. Bayh-Dole is specific to small companies and non-profits. But there’s a weird way round. Reagan’s Executive Order 12591 requires federal agencies to use Bayh-Dole contracting with all contractors–even large companies. That’s *not* Bayh-Dole but rather executive branch patent policy. The difference? Executive branch patent policy cannot preempt federal statutes that require federal ownership of inventions–but those federal statutes are not in play here with remdesivir. In a sense, then, Bayh-Dole does not apply. Federal executive branch patent policy dressed up to look like Bayh-Dole applies. We read the law but then have to apply it like it is a federal policy implicit in federal contracts even though it might recite the law as if the law applies. Good grief. Why did I come to this party? Why are all the drinks so awful?
More so, after Reagan issued a Memorandum requiring federal agencies to use Bayh-Dole, Congress amended Bayh-Dole to add two key provisions (35 USC 201(c)):
. . . all funding agreements, including those with other than small business firms and nonprofit organizations, shall include the requirements established in section 202(c)(4) and section 203.
That is, Bayh-Dole was changed to require all funding agreements (still a Bayh-Dole defined term) to require march-in and the government license to practice and have practiced–even for large companies not otherwise contracting with Bayh-Dole-like patent rights clauses. Bayh-Dole applies, but not as a statute, only as executive branch policy, except for march-in and the government license, which still have the force of statute because they are in Bayh-Dole for all contractors that are parties to a Bayh-Dole-defined funding agreement. (Federal agencies avoid Bayh-Dole by removing references to research or development from contracts and not calling them contracts or grants–the funding instrument, though clearly a federal contract, is called a “transaction” or “award” and thus fails the definition of funding agreement and–so the federal agencies have it–avoids Bayh-Dole. Funny how for a law that is supposed to provide such incentives and is so beneficial to the public and has been so wildly successful that federal agencies and companies work so hard to avoid Bayh-Dole.)
More irrelevance from Pipes:
The federal government’s own experts don’t believe they have a legitimate claim to remdesivir. As the chief patent counsel for the U.S. Army Medical Research and Development Command put it, “Although USAMRIID”—the U.S. Army Medical Research Institute of Infectious Diseases—“performed extensive and critical screening and testing for the company, testing a compound and finding that it is indeed an effective antiviral compound doesn’t qualify USAMRIID as a joint inventor of the compound.”
Testing may not provide joint inventorship. True enough. But Bayh-Dole’s standard of scope has nothing to do with inventorship. The definition of subject invention has to do with conception and first actual reduction to practice. These are concepts drawn from priority of invention not who made the invention. Invention here is broader than any particular set of claims. Take remdesivir, the compound and all its methods of making, formulations, and uses. That’s your big invention. Now consider the government supporting work on coronavirus applications–that work takes in the invention–the compound–and potential uses–such as in treating covid-19 infections. It does not matter whether government scientists are co-inventors. What matters is that the testing–part of first actual reduction to practice–makes the invention, at least the covid-19 facing parts of the invention, a subject invention under Bayh-Dole. Army scientists don’t have to be co-inventors. That’s not Bayh-Dole’s standard for scope.
Pipes talks about ludicrosity:
Further, it’s ludicrous to declare that “Gilead is unable to assure a supply of remdesivir sufficient to alleviate the health and safety needs of the country,” as the complainant attorneys general do. The company agreed to sell 500,000 courses of treatment to the federal government through September. That amounts to more than 92% of its production capacity. That’s in addition to the more than 190,000 courses the company donated this spring.
The expected need runs to the tens of millions. Sure, media hype and whatnot. But 500,000 doses is tiny compared to the estimated needs (at the time) and the (inflated) expectations for the importance of redesivir. What’s ludicrous is Pipes representing that 500,000 treatments begins to meet the apparent need in the US, is anywhere close to “reasonably” satisfying the need.
By the end of the year, Gilead plans to produce more than two million courses of treatment. That should allow for plenty of remdesivir, given that it’s only appropriate for a fraction of Covid-19 patients.
By the end of year, the covid-19 patients that needed the drug will have died. Oh, I know, redesivir does not save lives but merely shortens the duration of symptoms for those who are going to survive the infection anyway. But there it is. Don’t march-in now because a company will. have enough doses in three or four months to meet a future need but not the one we have now.
Perhaps what’s most ludicrous is Bayh-Dole’s concept of march-in for public health. It’s not just that the government can require licensing but that the contractor can object, require hearings, and then escalate its objection to the Court of Federal Claims. March-in is more like slowly, hopelessly, bureaucratically grind-in, ensuring that any federal action will be too late to matter. March-in should be like the Defense Production Act, but for medical matters. But no, it isn’t. March-in is designed not to operate. The idea behind Bayh-Dole is to create a protected pipeline of patents from federal funding to speculative investors. That is the NIH’s vision for the development of treatments for public health. No public oversight. No public right of appeal. No public accountability. No public reporting. No intervention for nonuse, unreasonable use, unreasonable terms, unreasonable pricing, lack of availability when it matters, lack of multiple suppliers to guard against loss of any single source by accident or sabotage or earthquake or fire or flood or contamination.
Pipes ends with accusing the state AG’s of selective “allegiance” to the rule of law. Pipes here is being ludicrous. The AG’s appeal to the rule of law. Pipes responds with a garble of non-law, fallacy, and hand-waving. Pipes shows no indication that she has a concern for the law. It’s not that Pipes argues–we really must have more doses of remdesivir available now, but gosh, Bayh-Dole march-in is not legally sufficient to do it. That would be a rule of law respecting argument. Instead, Pipes tries to sweep the law aside: “The NIH chose not to follow the law in other cases, and so should have to now.” Well, that’s some argument for public health, now, isn’t it?
So how might the facts be against the AGs, though Pipes wouldn’t know it? First, remdesivir turns out to be a minor bit of treatment, not life saving. So the AGs are wasting their time. Second, if Bayh-Dole applies–and it sure looks like it does–then the federal government (and the state AGs, it turns out) already have a license to practice and have practiced the invention–remdesivir writ big–for covid-19 treatment. “Practice” means “make, use, and sell” all the way back to the 1962 Kennedy patent policy, from which Bayh-Dole lifts its language (via the 1968 IPA master agreement). The AGs would be better of demanding that the federal government act immediately on its licensed rights and forget march-in altogether. The federal government has the right to authorize making, using, and selling remdesivir for any government purpose, including addressing public health needs.
March-in can never happen in the time frame of most public health needs–so in a sense Pipes is right–the AGs should not try to use march-in. Further, the government license is directed at “the United States”–in the Kennedy and Nixon patent policies, it was made express that the license included not just the federal government but also the States and domestic municipal governments. The AGs shouldn’t even bother with a petition to the federal government–they should advise their state governments that their states have the right to authorize the making, using, and selling of remdesivir for any state purpose. If a state has the right to lock down its public for a public health problem, it surely has standing to authorize making, using, and selling a drug to treat that same public health problem. Even if Bayh-Dole were determined not to apply, it’s all good for state AGs–states cannot be sued in federal court for patent infringement.
If anything, then, the state AGs should be petitioning the federal government to grant emergency FDA approval for the states to exercise their right under the government license to make, use, and sell remdesivir (and have it made, used, and sold for them). Don’t get caught up in march-in. That’s wasted effort for a rotten bit of bureaucratic eye-candy that was used to make Bayh-Dole look like it would protect the public interest when it was designed not to. We can bark up the march-in tree all day and it will get us nothing. But the government license–that’s direct, procedure free, and ready to go. If the AGs are serious, they will use the government license and not wait around for the NIH to refuse yet again to march-in.