Come in from the cold

In The Economist for August 8, there’s an article on the problem of patents. The article questions the utility of patents and points to a number of situations in which patents appear to block innovation or have nothing to do with it. Here’s the tag line:

Patents are protected by governments because they are held to promote innovation. But there is plenty of evidence that they do not

Much of the industrial revolution, for instance, came about without patents in key areas–or basic scientific research leading the way. Plenty of patents on paper clips, perhaps, but not on key facets of looms or locomotives. The article points out that the early use of patents was to generate income for a ruling government. It is only later, such as in the US constitution, that there’s an effort to make patents serve the public good by promoting “progress in the useful arts.” This American approach to patents takes the form, then, of a counter to trade secrets and a prospect of financial incentive to produce new things. If your creative folk can’t innovate because everyone is keeping secret how they do things and no one can figure out by inspecting or fiddling what those secrets are, then perhaps the patent is a serviceable tool.

The article points to a 2004 National Academy of Sciences report that argues

The benefits of patents in stimulating innovation appear to be highly variable across technologies and industries, but there has been little systematic investigation of the differences. In some cases patenting appears to have departed from its traditional role, as firms build large portfolios to gain access to others’ technologies and reduce their vulnerability to litigation.

and adds further

We do not know whether the benefits of more and “stronger” patents extend very far beyond a few manufacturing industries, such as pharmaceuticals, chemicals, and medical devices. It is even less clear that patents induce additional research and development investment in the service industries and service functions of the manufacturing economy.

An earlier National Academies study, Patents in the Knowledge-Based Economy, presents a number of articles that question the value of patents in information technology and services.

The article in The Economist looks for evidence that the outpouring of patents in recent years has improved the rate of innovation, but doesn’t find this to be the case, across plant breeding, chemicals, car-making, aerospace, software. What’s the point, then? Yes, yes, we have the pharmaceutical argument–that new drugs won’t be developed if investors cannot recoup their investment. The article points out that patent-based drug development has not shown itself to be superior. Germany and Italy were more productive before their firms were allowed to patent pharmaceutical compounds.

But given that the financial sweet spot for drugs is something that mitigates a chronic condition for life rather than one that prevents or cures, just how important are such monopoly-priced drugs-for-life to our well-being? Is this what universities, in particular, should aspire to? Is this the goal that should be subsidized by public funds and public institutions? Did we vote for that? For drugs to prolong our suffering at bearable levels? That’s certainly not much of a high calling for the services of a public university, to play welfare uncle to the pharmaceutical industry and its speculative investors. Who decided that university IP policies and practices should be warped to seek out this speculative sweet spot for the benefit of pharmaceutical investors–to the exclusion of all other roles a university might have, across all the various forms of research finding. The biotech “model” of patenting and speculating dominates all areas of university life. One ring to rule them all, as it were.

A second sweet spot, by the by, is servicing what is now called “futile care”–foisted on the ill and especially the dying as a sign of “fighting back” when really it’s a premium pricing ploy. The New York Times in a review of Dying in America: Improving Quality and Honoring Individual Preferences Near the End of Life notes that the report calls for

the elimination of “perverse financial incentives” that encourage expensive hospital procedures when growing numbers of very sick and very old patients want low-tech services like home health care and pain management.

Consider Ken Murray’s “How Doctors Die” for an alternative to futile care that doctors understand. It appears that drugs and dying form two bubbles of financial exploitation, which obviously will be attractive to speculators of a certain disposition–not immoral, but not particularly committed to considering the broader effects of building a market based on extracting maximum treasure rather than building up the welfare of individuals and the community. Oh, I know–who is to say what the actual benefit is, unseen hands guide the future, and all that. But why should governments–taxpayers–us–pay to preserve a betting parlor for speculative monopolists?

There is no question that some things might not exist if those funding them do not get back what they expect. But for every public work or creative work or product that might sold in a market, there are other ways to look at it than simply as a speculative play to make more money than it costs to create. People do not have to build a thing for its speculative upside. We don’t have to choose our friends that way, we don’t create necessarily that way, we don’t *have* to think everything we do is a speculative investment. Research, for instance, may be an investment, but without a particular need for private return. The investigator, too, might explore for curiosity or even for a cure without seeking out the easy way to money.

Ayn Rand’s idea of selfishness is not that of “doing whatever makes the most money” or “being bought by whoever has the most money”–for Rand, the self is more worthy and less easily debased than all that. Turning activities such as research into speculative investments for maximal financial return is a form of betting on the community. It’s something that can be done, as can betting on who will die next, or betting on who will get married or divorced next. Yes, employers do take out life insurance policies on employees for the possible payouts, and yes, there might well be betting pools out there looking at whether an associate’s marriage will fail–but do any of these forms of betting do all that much for community? It’s one thing to run a lottery to separate people from their money, but it’s another to make the subjects of the bets how we live our lives. It’s yet another when the government is building the casino and encouraging betting on our lives, as if the activity of betting is itself the preferred, if not best, route to a better quality of life.

One is left with the idea that some industries rely on patents, some exploit patents, and others avoid patents. It’s one thing to advocate for patents for pharmaceuticals (even if that’s not settled as a good thing), but it’s another to insist that patents are universal goods and should be extended to all areas of creative activity. A remnant to the adamant resistance in the medical community to patents is the exception to infringement for practicing patented surgical methods. No doubt there are folks who want to see this exception done away with, too, as the research exception was with Madey v. Duke. Why not patent methods of defending against Marshawn Lynch? If the Seahawks held a patent on new and unexpected ways of preventing Lynch from getting into the open field, they could legally prevent defenses on opposing teams. Why not patent methods of finding bugs in Apple products? That would be good. Then Samsung could prevent Apple from using the best methods to identify defects in, say, iTunes. Heh, heh. Good for a laugh, you say–but why are these areas much different than, say, “detecting malicious email transmissions” (Columbia University, 2015) or “detecting compromised computers in a network” (Florida State, 2014) or “efficient intrusion detection” (University of Florida, 2012)? How is the public good advanced by such patents that prevent others from using these methods to prevent their computer systems from being abused by others?

Why not go the other way? Why not create greater commons in some areas of endeavor, such as the internet? And if so, why do we have to wait for lawyers and legislators to act–meaning the wealthy and lobbyists? A university could create a broader commons by precluding faculty from using patents to “protect” (i.e., monopolize) their research findings. A horrible thought, you think? A number of university faculties committed themselves to just this sort of policy fifty years ago:

It is the policy of the Faculty of Medicine to forbid the patenting and exploitation of any medical discoveries or inventions. (Columbia, 1944 thru at least 1962)

The purpose of the State and Federal research programs in these colleges and schools [agriculture, veterinary, and industrial relations] is to develop new information and improved practices, the widespread use of which will benefit producers and consumers and thereby give a satisfactory return to the public for its tax support of this work. Most of the results of this research are given to the public by publication. The securing of patents on new devices or processes primarily for personal profit of members of the staff is unwise public policy and might jeopardize the continuation of public support. Patents however should be taken out whenever necessary to protect the public by control of quality and by insuring a reasonable price for the patented product. (Cornell, 1952 thru at least 1962)

No patents primarily concerned with therapeutics or public health may be taken out by any member of the University, except with the consent of the President and Fellows; nor will such patents be taken out by the University itself except for dedication to the public. The President and Fellows will provide legal advice to any member of the University who desires steps to be taken to prevent the patenting by others of such discoveries or inventions. (Harvard, 1934 thru at least 1962).

Medical and dental ethics which prohibit physicians and dentists from realizing any direct or indirect material return from the manufacture, sale or distribution of any product for which the patient pays, or which is used as a therapeutic device or health aid, or which in any manner affects public health shall be the governing principle to the faculty member, the employee or student of the University who has a patentable idea of possible value to medicine. (Loma Linda University, 1956 thru at least 1962)

Since then, of course, we have had Bayh-Dole and the deceptions and clever exploitative schemes of its advocates to turn patents from a social tool with limited utility to the promise of widespread social good, if only bureaucrats owned research and speculative monopolists paid dear to buy it from them. This is only a dream some people hope to dream each night. For the rest of us, the success of the Bayh-Dole regime means oppression, disruption, and loss of freedom, including the freedom to innovate using the results of public research–no, can’t do that, must first pay bureaucrats or wait for speculative monopolists to make their money.

The US government has had to step in at a number of points and break up patent gridlock arising from either monopoly or fragmentation. In the 1920s, the emerging aerospace industry couldn’t build an airplane because companies held patents to block each other, allowing European companies to gain an advantage. The federal government had to step in and require cross-licensing to restart the industry. The nanotech situation in the past twenty years has seen the same fragmentation, with each variation on carbon nanotube or graphene the subject of multiple patents. Few can get through such thickets, whether controlled by many companies or one. “Stifled at birth” as one article (linked above) puts it–and university administrators have had a heavy hand in the stifling. One cannot look seriously at the reports of “success” without also looking at what’s been suffocated in the back rooms.

The IT industry has used standards and interoperability as ways to navigate patent thickets, separating patents into essential and non-essential claims. Think of it as road building without eminent domain–the industry leaders choose to build the roadmap for improvements where no company will play the troll on all the rest–FRAND (fair, reasonable, and non-discriminatory) licensing or nothing. Universities, generally, almost universally, do not participate in FRAND licensing–certainly not as a default or a preferred form of deploying patents, even though some of the biggest “hit” deployment projects, such as Cohen-Boyer and Axel, were of this form.

There may well be a role for patents to promote progress of the useful arts. The NAS report suggests restoring the standards for what’s “non-obvious” and requiring that patents be written to teach the invention in plain language, not to cleverly try to expand the scope of claims and obfuscate said invention with a plurality of expressions of methodology. That is, it is not the idea of a patent, but what the patent actually constitutes, that should be in play. More than that, just because a patent might promote progress in the useful arts does not mean it is the only or best way to do so. Progress requires more than patents–it also requires commons, platforms, and readily available resources.

Indeed, that was Vannevar Bush’s great insight–that if the results of basic research were readily available, then when collocations of scientists, academics, and gadgeteers were assembled to take on an established order, they had plenty to draw on to do their work without interference from the established order. The effect of Bayh-Dole has been to claim that only by shopping basic research*to* the established order, either directly or via speculative monopolists, can there be progress. It’s just that most of the established orders these days don’t buy into these claims about Bayh-Dole–only, perhaps, university administrators all hot for autocratic power and desperately seeking new sources of revenue to support their salaries at 3x or more the average salary in the country. For these administrators, it’s enough that patents are for the public good, and better than universities, which are also for the public good, should make as much money as they can from them.

Universities, without government prodding, without legal demands–that is, without giving up their right of self-determination–could implement freedom to innovate. Any university that does so restores its own role as trustee and advocate rather than self-interested institutional rummager and bully. If a university president wants her institution to deserve public support (and here I’m thinking of you, especially, Ana Marie Cauci), she will take the approach of freedom rather than patenting and patent ownership. In the old days, universities received royalties on some handful of inventions because the inventors and their company partners wanted the university to benefit. The university did not have to threaten either its own faculty inventors or industry, and the advantage to the university has not improved when the university holds patent rights with which to seek fortune.

Whatever the role of patents generally, the university research role is to feed the commons. The role of the university itself, then, is to make the food as good as possible and make the feeding as effective as possible, and preserve the innovation cafe from exploiters. Advocate, adjudicate, not speculate.

So what has university embrace of patent speculation done?

University claims on inventions displace entrepreneurs with open access in favor of those with the patience and special weakness for dealing with bureaucrats.

When a university owns substantially all research findings, scholarly publications become advertisements. Where multiple universities hold the underlying rights to data, software, inventions, and business ideas, publications are a form of science fiction. No wonder some companies instruct their researchers not to read university publications.

The university fixation of ownership turns discovery and capability into speculative capital. In Piketty’s terms, the purpose of Bayh-Dole (the exploitation of Bayh-Dole) is to turn faculty labor into capital–even if doing so runs against the will of the faculty inventor or author or principal investigator. Innovation requires freedom to work on development. Patents turn that freedom into capital assets.

The university vision is then that these capital assets can be sold to speculative monopolists–that is, the university becomes a rentier, trading on harvested capital. Rather than feeding the commons, the university role is to exploit the commons as a market, a betting parlor for speculators themselves trying to gain the attention of wealthier (but generally foolish) speculators.

The effect of university policies on the ownership of inventions, combined with the expectation that these patents are held for speculative monopolists–that is, for exclusive licenses and a share of the benefit of monopoly pricing rather than for FRAND general access and the benefit of goodwill and rainmaking opportunity for many–is to exclude initiative and delay for 20 years or more access to the results of university-hosted research. That is, Bayh-Dole-influenced university administrators have made university research irrelevant to innovation and entrepreneurship. And all the while fixated on their intent, to promote the public good. I await the moment when they awake to cry, “My God!… What have I done?

The first university that lets go of its patent heart will be the focus of a great deal of hope and goodwill. So will the second, the third, and the fiftieth. Come in from the cold.



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