The "Patent Problem" in 1948

I’ve been looking at university patent policies lately and came across this discussion of university patent policies by Archie Palmer from 1948, produced by the National Research Counsel and available through Google Books. The discussion is notable for the clarity with which it lays out the various issues involved in the “patent problem,” as Palmer puts it, something that had been a concern for nearly half a century.

Palmer surveys university patent policies–or the lack thereof–while arguing that it would be progress for universities to have patent policies and not make a virtue out of researcher apathy regarding the practical potential of scientific findings.   He cites debates regarding the advisability of patenting scientific work, and follows with conclusions from various panels and writers that patenting can be beneficial in certain circumstances.

I’m struck with the range of issues that are still with us–the voices advocating for the use of patents to advance industrial development, met by those warning that patents figure to be great disruptors of science and scholarship.  I’m pretty agnostic about patents.  I’ve seen them do good, and I’ve seen them become a torment.  Given that patents are yet another cultural convention, it’s hard to feel that getting rid of them would leave things just as they are, except without patents, as if folks wouldn’t compensate in the void and do something else, probably with comparably consternating effects.  The “patent problem” is not so much a matter of patents themselves, but how they are used.  That’s where universities might be innovators in the use of patents, but it’s not happening, is it?

Here’s how Palmer envisions the use of patents by universities:

Some scientific discoveries made on a university campus are of such a character that they should be made public and be available to anyone wishing to make use of them, the university merely retaining, and issuing licenses under, the patent title in order to prevent some person or organization from taking out a patent by slightly modifying the material and thus monopolizing the discovery or invention. A fertilizer or medicine that any manufacturer could make is an illustration in point.

There are cases, however, such as the carbonization of coal or the manufacture of vaccum tubes for radio transmission in which the article can best be manufactured only by one or two establishments, because of the large amount of capital necessary or because the use of the new discoveries depends upon the utilization of materials or processes patented and owned by others.  In such a case, it is manifest that the public interests may be best served by giving a license to the manufacturer of the patent or discovery, even an exclusive license if necessary, either royalty-free or on a royalty or cash basis.

Imagine issuing licenses simply to protect the public against someone making a slight modification and then monopolizing a discovery and not setting out to make money by *being that monopolizer* or actively seeking a monopolizer, making the essence of “commercialization” out to be “complicit with a monopolizer to maximize the benefit to the university”–turning royalty sharing with inventors into an invitation to be complicit as well. Palmer points to inventions “that any manufacturer could make” as ones suited to open licensing to prevent monopoly positions.

The standard that Palmer sets out is based on a large capital investment or background rights held by others.  The patent then serves to gain access to resources and rights that permit the invention to be developed.  Such situations would be all the more suited to university patent positions where multiple organizations hold background rights–rather than it being a “crowded field” analysis–which tends to discourage university patent administrators–one might say, this is just the situation that a university being innovative with its patent assets could address, to the benefit of industry and the public. Palmer imagines that a university in this latter situation in which only one or two companies might invest in developing an invention could be served by a license that might “even” be exclusive and might be royalty-free.

It won’t be able to do this sort of thing, however, if it is fixated on finding a money-making deal, let alone a “big hit” license.   Has any university, in the history of Bayh-Dole, announced a royalty-free exclusive license?  Perhaps that is what the Glasgow initiative was aiming to do, but only with technology it couldn’t place any other way, and without regard to whether the result would be a monopolizer or an effort by a company to invest and/or go get the necessary rights it needs.  For that, the practice tip would be:  do not require payment for sublicensing in cross licensing situations in which the consideration is access to background rights of others.

As to the state of ownership in the policies Palmer surveyed, he has this to say:

At most institutions the compulsory assignment of patent rights is not considered desirable, except when it is necessary in connection with cooperative or sponsored research.  Voluntary assignment is preferred and in many institutions is encouraged and facilitated either through formalized procedures or through special machinery for handling patents set up within the institution.  In many instances the services of an outside organization closely related to the institution or under agreement to act as its patent management agent are employed.

In 1948, before the National Science Foundation had been formed, the typical university with a policy on inventions made assignment voluntary.  Is it progress that now most universities assert ownership of inventions, have sought to expand the scope of their claims, and now aim to make the assignment of title as efficient and thoughtless as possible, if not through federal vesting (and that argument has failed, for now) then by present assignment of all possible expectant future inventions?  As for scope, the expansion has not merely been from inventions made in sponsored research in which the institution has been designated to be the owner, but also to inventions made with university resources, often without any de mininis standard, to inventions made in consulting, and through conveniently inept drafting of definitions for “invention” to pretty much anything, including know how, expertise, information, software, and “non-patented” work.   The irony in this expansion is that some university patent policies end up, technically, claiming ownership of assets that don’t have a legal theory of ownership, such as “know-how” or “expertise”.  University policies on ownership, in their rush to control things, have even outstripped our concepts of what can be owned.