Don’t think it will be easy to get at Bayh-Dole

Bayh-Dole was designed to create private patent monopolies for the pharmaceutical industry that operate without public oversight or accountability.

Almost everything about Bayh-Dole is a corruption of prior federal and university practice. Sure, it is possible that university administrators might stand up and use Bayh-Dole in a non-corrupt way. They could actually implement Bayh-Dole. They could read Bayh-Dole carefully–or, hey, even read it once. But no, that hasn’t happened much. Even those few university patent administrators that do focus on public interest come in for criticism by the corrupt monopoly heads. And senior university officials, for the most part, would rather deal with celebrity elites rather than with common folk. It’s more important to seek the money from elites to do the public’s work than to just do the public’s work. Talk about universities losing their moral compasses.

Anyone thinking that Bayh-Dole can be used to address high drug prices is suffering from an illusion–the illusion about the usual narrative about Bayh-Dole. High drug prices are an intended effect of the law. High drug prices are just about the only basis on which Bayh-Dole might be judged a success–well, high prices and the bloatification of university patent licensing operations and the destruction of the discussion of any other way to do things.

Bayh-Dole justifies the wholesale taking of inventions–the private property of university inventors. The Supreme Court overruled this practice, but the patent attorneys feeding off Bayh-Dole doubled down with the claim that present assignments were necessary for universities to comply with Bayh-Dole. At least with the federal patent commons, inventors had access to their own inventions. Under Bayh-Dole, they don’t.

Bayh-Dole diverts inventions that would have reached the public domain or the federal patent commons–available to all–to speculative university monopolies, where they are held in the hopes of attracting speculative investors who will make billions and share millions with the patent brokers, with some left over for inventors and universities.

Bayh-Dole creates monopolies with particular focus on exploiting human suffering as a market. The sweet spot is to create drugs that make acute conditions chronic. The public good is served when patent brokers make a lot of money and the patent exploiters make much, much more money.

Everything by way of gesture and apparatus in Bayh-Dole is there create a cloak of concern for the public welfare. The expansion to small businesses, the need for a “uniform” policy that’s government-wide, the necessity of “certainty,” the assurance of “march-in procedures.” All of this is just cover.

Even a modest inquiry shows how irrational the justifications are. Start with the idea that the only way that the public might benefit from federally supported research is that patent brokers create private monopolies to create commercial product sold at, well, monopoly prices. Otherwise, everything “sits on the shelves” and children go hungry and kittens drown. The stark reality is just the opposite: 99% of inventions claimed by patent brokers under Bayh-Dole are forced to “sit on the shelf”–unlicensed, or licensed but not developed. Not available. Before Bayh-Dole, universities claimed commercialization rates ranging from 25% to 50%. Now the rate is 0.1% to 0.5%. There’s your Bayh-Dole effect.

But it doesn’t matter, so long as pharmaceutical companies get monopoly access to compounds discovered with federal funding and speculators have a chance to introduce monopolies ahead of acquisition of these compounds by the pharmaceutical companies.

Bayh-Dole’s apparatus to protect the public interest is mismatched with the statements of public interest and most of the apparatus is so botched and diluted that it could never work.

Procedures made useless by Bayh-Dole, the implementing regulations, and the standard patent rights clause:

march-in 

Mis-matched by design to public interest, march-in interventions are restricted to four conditions, transmogrifying “reasonable terms” of practical application into other forms of “reasonable”–reasonable time, reasonable availability. Just not reasonable terms. No matter. March-in procedures are subject to so many requirements with delays that even if an agency had a legitimate demand, it would take years to march-in. Under the old IPA system, march-in was pretty much immediate.

exceptional circumstances 

The process by which a federal agency can restrict patent exploitation at the time a funding agreement is awarded is made cumbersome and left, eventually, to the belief of the Secretary of Commerce rather than, for patents on drugs, to the judgment of the Surgeon General. Under the Kennedy patent policy, exceptional circumstances were the ones that left inventions with contractors who otherwise lacked a commercial position or capability to use an invention.

small business preference

The procedures regarding giving small businesses a preference in licensing subject inventions make it virtually impossible for the government to reverse deals that have violated the law. The government authority is reduced to making recommendations for changes to university licensing policy. There is, in effect, no small business preference that’s enforceable, despite the apparatus that gives an illusion otherwise.

substantial manufacturing in the U.S.

Whether a university must require substantial U.S. manufacturing for an exclusive license for the U.S. is conditional. A university may claim it tried but couldn’t get a deal for U.S. manufacturing or can simply declare that such deal is not “feasible”–subject as well to funding agency discretion (and not to the Secretary of Commerce’s discretion–where it might matter). No wonder there’s never been a march-in regarding U.S. manufacturing. Even Xtandi, the multi-billion dollar cancer drug “invented” with federal support and selling for $88 a pill in the U.S. and $12 a pill in Canada, appears to be manufactured in Europe, though it’s licensed exclusively in the U.S.

enforcement

There is no provision for enforcement. There is no private cause of action to object to any university licensing practice or federal agency failure to follow or enforce Bayh-Dole or the standard patent rights clause. The penalty for failing to report or otherwise comply with title practices is a sixty-day period in which the federal government can require conveyance of title to the government. Even then, all licensing commitments in place stay in place. Bayh-Dole is a do WTF you want sort of law, so long as you are a patent broker.

reporting

Reports provided by patent brokers to the federal government, if federal agencies bother to ask for them, are kept secret, excluded from federal public disclosure law. That way, the public can’t know just what patent brokers are doing with Bayh-Dole. Mostly, what the brokers are doing is using patents to withhold 99% of university-hosted inventions and discoveries from use. But they don’t care, because it’s almost impossible to find out what the brokers are doing. By law.

Bayh-Dole is a total disaster for research, for innovation, for economic development–for just about everything except patent brokers and pharmaceutical firms. If you want to go after the law, there are ways to do it, but bear in mind you are trying to make a scam cloaked in virtue actually become virtuous. There is something inherently difficult in the effort. The entire “protective” apparatus of Bayh-Dole is designed to fail to serve the public interest. The public interest, rather, is whatever patent brokers and speculators say it is.

If you aim to attack practices under Bayh-Dole, keep in mind that you will be attacking practices that the law was designed to enable. You will appear to be undoing the success of the law. You will be characterized as clueless or spiteful or an agent of evil. Bayh-Dole is a law that appears to make moral what you think is corrupt, exploitative, gouging, and conversion of public assets for private gain. It’s just that the private gain is couched in terms of institutional interests, not individual interests. Patent attorneys make their $800/hr. University patent administrators pull their $100K/yr. Speculative investors get 50x returns (if they get anything). Pharmaceutical companies make billions riding the monopolies (but look, there’s a new drug–and it would never have become available without all those parasites with their thumbs in the pie–no, no, I mean, it would never have become available unless patents with certainty of title had not encouraged the private money necessary to create a commercial product). Some (few) people get rich, of course, but now in the context of doing what appears to be federally mandated.

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