Here’s a discussion in the wild, c. 2008, from some folks who generally have legitimate concerns about Bayh-Dole (my emphasis):
One of BD’s intended virtues involved transferring default patent ownership from government to parties with stronger incentives to license inventions. BD assigned ownership to institutions, such as universities, nonprofits, and small businesses, although it could just as easily have opted for individual grant and contract recipients.
Now we know from Stanford v Roche (June 2011) that this account is simply not true. And this paper is from critics of how Bayh-Dole has been implemented in the United States, and what this means for countries trying to do something similar. The paper concedes the secret we-wish version of Bayh-Dole, the version that university administrators created to serve their institutional self-interest. But Bayh-Dole never did “assign ownership to institutions”. It’s not in the law, and the U.S. Supreme Court sent the universities packing.
Here is the unfortunate thing: how can anyone trying to do a decent job of getting background on Bayh-Dole and on US university practice ever find an accurate account of Bayh-Dole, if even the elite critics of the Act have gotten it wrong? We can get into the authors’ concerns for exclusive licensing, creating a government invention commons, and stronger government ancillary licensing, but first we have to get the discussion onto a different platform altogether. In order to preserve even the published criticisms of Bayh-Dole, folks have to acquiesce in the universities’ efforts to nail down ownership of all faculty work (from which they think they can make a buck, er, “has commercial potential”).
If Bayh-Dole is no vesting statute, then a lot of countries have gotten really bad advice from the US, not just from the advocates of government intervention in handing ownership of inventions to institutions, but unintentionally as well from the top critics of what those institutions are doing. What a total mess!
Message for the world: Bayh-Dole creates a uniform government policy regarding how various federal agencies procure invention rights from sponsored work. Bayh-Dole authorizes a default standard patent rights clause that can be varied in exceptional circumstances following a consistent protocol. The standard patent rights clause establishes, for the funding agencies, the conditions under which private development of an invention made with federal support is pre-approved.
The Act does not address who owns inventions made with federal support, but rather establishes the conditions on which a federal agency can require assignment of such an invention from whomever came to own it. If inventors of a federally supported invention assign ownership of their invention to an invention management agent that meets the conditions of the Act, and provided that this agent also meets the conditions of the standard patent rights clause, then the agency is required to accept a non-exclusive license for government purposes in lieu of assignment of title. If the inventors do not assign their invention to a pre-approved invention management agent, then the federal agency may, under the Act, allow the inventors to retain title. If the agency does so, then according to the implementing regulations, it is to treat the inventors as if they were a small business. Certain privileges are accorded employers of federally supported inventors–the right to receive a report of each invention, for instance. But those same employers are also required to require that their employees who may be future inventors make a written commitment to protect the *government’s* rights; that is, confirm that government rights take precedence over any institutional claims to the contrary. This commitment has been distorted and made to appear to mean that for employers to comply with the law, they must require employees to assign their inventions to their employer. This is not so.
The essence of Bayh-Dole is making uniform federal agency pre-approval of invention management agents chosen privately to promote the use of federally supported inventions. Most US universities, however, have used the freedom of the law to take control of all the inventions that they can by changing their own policies to require faculty assignment of inventions. So, for all practical purposes, the universities have spoiled the law and frustrated its greatest attribute–allowing a diversity of private invention development practices, starting with faculty choices regarding agent. The spoilage in itself should be a sobering lesson for anyone in a developing country.
How can we sort out this mess, if even the critics of Bayh-Dole have conceded the university we-wish version of the law?
One pathway, obviously, is to sit by while universities finish off their construction of a compulsory institutional system–not just of ownership, but also of choice of agent and the operating model that agent will use, typically an effort to secure exclusive licenses in exchange for a commitment to produce commercial product and pay a royalty on sales. To make this model work, universities have to claim everything and file patent applications on everything that they can. That in turn runs up both direct costs (to pay patent attorneys and the patent office fees) and indirect costs (to develop data bases and policies and pay staff to handle the huge volume of invention reports that the policy produces). The costs then have to be recovered, intensifying the efforts to land paying licensees. Even if this sort of “system” produces a “successful” license here and there–and there really are some amazingly “successful” licenses here and there–look at the havoc it is playing across all of the university research enterprise. That havoc is *not* being reported in the AUTM licensing survey, which is used to produce vanity metrics, nothing actionable.
Or one can work to reset the fundamentals of the Bayh-Dole Act (35 USC 200-212) and its standard patent rights clause (37 CFR 401.14(a)), embedded in a broader framework guiding federal grant support to universities and other nonprofit organizations (at 2 CFR 215). For this effort, one has to roll back university IP policies that make inappropriate claims, revise “guidance” documents prepared for faculty and industry that “summarize” Bayh-Dole and get it wrong, and explain to the public (and policy-makers in particular) that things got a bit out of hand, some bits of law and regulation got misstated and there will be a pause while things get sorted out. That could be a very refreshing sorting out, but it does not appear that university administrators are up for giving up their appropriated status as arbiters of all faculty research that results in anything they want to keep for profit-seeking exercises.
Or one could say thirty years is enough of Bayh-Dole, and open up a new discussion of what we have learned, especially about university administrative behavior, and as well about federal grants programs based on requests for proposal and peer-review–hugely expensive programs to operate, and with peer review at times acting to reduce the diversity and limit the direction of projects allowed for funding so that they conform to the expectations of the status quo leadership of science and scholarship. Perhaps at this time in the condition of science and the economy it would be a good time to let off of the idea of “business as usual” and perhaps also it may do little good to try to “go back” to a different time, where a different approach appeared to be reasonable, since that different approach–the pre-approved invention agent model–may not be so workable now, especially given that university administrators have done so much damage to that model, that if it isn’t dead, the luster certainly is off of it.
If we were to go this third path, then we have other options. One is to open up new legislation. The university administrators are guarding all the legislative approaches they can to prevent such a thing at the federal level. Still, the objections to their behavior are coming from many different directions, and it will be a wonder to see that they can hold off all of these with vanity metrics and disparaging comments about anyone who would dare to suggest alternatives. At the state level, one can go after public university practices with freedom to innovate laws and stronger protections for faculty and students working with resources and federal funding at public institutions.
Given the problems that universities are having with their pitch for state funding, perhaps this is a better angle. The tough thing, though, is that the public universities have pitched their anticipated patent licensing revenue as a “new source of revenue” that will allow them to “run more like a business” and so won’t need that state subsidy, thank-you much, so long as tuition for students is doubled or tripled. When legislators realize they might not get re-elected for allowing such price gouging on tuition, perhaps we will get a change to make the case that patent licensing is not a reliable “new source of revenue” and attempts to make it such damage research, instruction, and public service.
A third option of this third path is to appeal directly to university administrators and faculty to change course. If innovation from research, or at least in the context of research, is so terribly important to the economy, then change how folks are going about it. De-institutionalize ownership, or if you can’t let go just yet, at least de-institutionalize the agent model, and separate ownership from the agents involved–better, assign ownership to the agents and hang onto a financial interest, if that’s what really matters. And if you can’t let go of the patent licensing business just yet, at least diversify the operating models and resources, so faculty are not constrained to see their work patented and offered for speculative monopolies against their better judgment.
There are some really sound, value-producing, entrepreneurial opportunity-creating approaches available–some that do not require all the complexity and nuance of a prison-camp-for-inventions approach that’s so popular at present; some that provide immediate access to new faculty work in registers that the faculty involved are prepared to support, whether open or consortia or commons or public domain or standards or via workshops or consulting or advisory services or startups. There’s a vista of opportunity to explore and develop.
It will be interesting to see which universities are up for the present challenges and willing to open up their approaches to get things accomplished. We truly need a change. It could be universities will once again be at the forefront of innovation. Wouldn’t that be sumthin’.