We have discussed the idea that university ownership of patents ought to be different from just any ownership of patents. Universities ought not use patents to exclude all use, for instance, or to license or assign to someone who will exclude all use–even for lots of money. In the same vein, there’s a problem if a university licenses a patent exclusively and the licensee never develops a product. In that case, not only has the invention not been used as it ought, but it has been kept from others who perhaps would have used it.
This is the problem of creating petty patent monopolies–all the folks who are excluded then are given the motivation to design around the patent, or to isolate the invention, or to make the invention commercially valueless. Researchers and companies alike are given this motivation. It may be a strange way of promoting the progress of the useful arts, but patent law allows petty monopolies–except for where Bayh-Dole modifies patent law. Bayh-Dole expects that the patent system will be used so that subject inventions get used, not just that patent owners may suck money out of trading petty monopolies. Bayh-Dole certainly does not allow patent rights to be used to motivate people not to use the subject invention and by creating barriers to use to ensure that the invention won’t ever get used during the life of the patent.
Think about that. Monopoly licensing, where it does not result in a widely available commercial product, creates just the opposite of what Bayh-Dole requires: such licensing creates nonuse and creates incentives for everyone else to find ways not to use what federal funds has supported. People then have incentives to make the invention useless and the patent worthless–even if “rationally” they should “pay for a license.” Studies of negotiation (using the ultimatum game) have shown that as a deal falls outside a split of approximately 60/40, people will refuse the deal against their own best interest to teach a social lesson to the fool offering an unfair deal. (Steven Smutko provides an example from the real world of negotiation. Dan Ariely points out that chimpanzees take whatever they can get, regardless of the amount kept by the offerer and suggests our neocortices work to engage social values rather than immediate self-interested ones.)
University creation of petty patent monopolies is often seen by those in industry (and among the general public) as socially wrong, unfair, against expectations, and inequitable given what the university has put in (nothing except the cost of creating the unfair condition in the first place by obtaining a patent) and its insistence on putting monetary return ahead of social purpose (seeking a monopoly partner, demanding commercialization, attempting to maximize income, and the like). University folks complain that their licensing operations would be more successful “if only industry cooperated.” They don’t see that industry refuses to cooperate, not out of a rational decision based on immediate self-interest, but rather by taking into account the broader social context in which universities ought to operate. The university claim that companies won’t cooperate reduces to a wish-lust that companies should behave like chimpanzees. Companies may behave like pigs or like persons, bears or bulls, but rarely do their managers make them operate like chimps.
The problem with university petty monopolies lies in social expectations. A university can never be a corporate player. Never. Just as a Denny’s could not become an upscale dining establishment or a J.C. Penny’s a hangout for teens. No matter what university patent administrators do to try to “change the culture” within a university–and even if all horrors aside they were to succeed–they could never “change the culture” outside the university. All university patent administrators appear to be willing to do with petty patent monopolies is to get people to back away and not deal with the university at all, not support it, not use its nasty, poisoned inventions. State legislators sense the problem as readily as does the general public–if it is called out to them. Why subsidize a university that brags it can make millions from its monopoly positions? Other things stand in more need of public support. Industry also sense the problem. If you are going to compete with us on the basis of petty patent monopolies and money, then deal with the consequences–we will put our game faces on.
In What Money Can’t Buy, Michael Sandel points out that market interests drive out social values. Michael L. Michael shows that even the introduction of incentives displaces personal integrity and drives out social commitments. Dan Ariely shows in Predictably Irrational how attempts to mix social and business relationships cause the social relationships to fail. (See chapter 4 in particular: “The Cost of Social Norms: Why We Are Happy to Do Things, but Not When We Are Paid to Do Them.”)
The idea of “technology transfer” is the love child of patent attorneys looking for business. Originally the term was used for university administrators finding potential inventions to “transfer” to patent brokers. That’s what a technology transfer office was. What was extracted from the lab for use by others was the patent right and that use was by patent brokers. When (rare, but happens) a patent broker licenses a patent, then it’s up to the licensee to decide what to do with the underlying invention. Sure, there’s a patent license document that huffs and puffs about diligence and payments. That’s for public show. The actual deal is whatever the company wants–it can sit on the invention until (if ever) the broker complains; it can go off to develop product and then renegotiate everything (and the broker will take lousier terms rather than kill the deal five years in); it can terminate the deal but keep all the secondary IP that will block any other poor sot trying to make the same product; it can downgrade the license to nonexclusive and void any diligence obligations, pay a tiny amount, and see whether anyone else tries to make the product and then ramp up efforts. Yeah, any of this.
Meanwhile, everyone else on the planet (except perhaps well meaning university licensing folks committed to the idea of petty patent monopolies) sees what the university is engaged in and backs away. Screw the university and their nasty little patent schemes. Screw them for looking out for themselves. Screw them for trying to steal stuff from my car when arriving to help at the scene of an accident. Screw them for helping only the first driver who offers to pay them. It’s not “rational” in the chimpanzee world, but it makes perfect social sense in a human world. When university administrators claim that they are changing university culture to be “entrepreneurial” (a bullshit claim in so many ways anyway), they really are destroying the motivation of university personnel to act with personal integrity. Instead, people act to avoid sanctions, do the minimum that is required, and (if they have nothing left in their tank of moral thought) do only what gets them institutional rewards.
While efforts have been made to link “technology transfer” to the movement of technology from discovery (assumed to be “in a lab”–often that’s not the case) to commercial use (as if productization for profit is the only way discovery might benefit the public–again, nonsense wrapped in pretty paper), the underlying architecture is speculation on the future value of petty patent monopolies. The result is that many companies reject the deal. It is not what universities should be doing. The petty patent monopoly often has nothing to do with making discoveries more available for use, and, well–screw all of you university administrators for the insulting behavior.
Using petty patent monopolies to prevent use of subject inventions violates the law. Bayh-Dole requires the opposite. That’s a stunning thought to most patent attorneys. They have been taught how to fuse a patent bomb and know that they make money for special handling of the bomb and make even more money any time one blows up. What’s the point of a patent bomb with no fuse? Or with only a tiny puff of glitter when it pops? No fun at all. Yet there’s nothing rightly rational about Bayh-Dole. I’ve chased down plenty of leads trying to find something–anything–that holds up. It’s stupid all the way down. Or, rather, it’s patent attorney self-interest all the way down and from that point of view, very clever. It’s just that what’s good for university patent attorneys and their speculative friends is not good for science, for basic research, for universities, or for industry generally.
Petty patent monopolies are not so painful that industry feels the need to get Congress to repeal Bayh-Dole. Bayh-Dole is like a legislated variety of mosquito. These mutant mosquitoes show up at most every picnic. They swarm and buzz and suck blood when they can. Picnics would be way better without them, but now they are another bother to deal with. A license deal leaves a red itchy mark. Everything else gets a slap. And better, light the citronella candles and slather on the neet and think about spraying to get rid of as many of them as possible. There are beneficial legislative insects. Bayh-Dole is not one of them.
Or, Bayh-Dole could be beneficial, if it were ever enforced on its terms.
But no one cares if universities ignore Bayh-Dole or violate it daily. It’s odd, isn’t it? If federally supported research results are so important, why is it that no one cares whether a university ignores the primary law regarding the disposition of patent rights in those results? No one apparently cares if a university’s licensing practice results in just the opposite of what the law requires. It’s all good, apparently, if the university declaration of intentions is good. “We created that nasty petty monopoly in the public interest.” “We couldn’t find a paying monopoly speculator, so we never did license that one. Oh, look! a squirrel!” That’s easy enough to spout. But it is bullshit, really, when there’s no accountability to the public for doing in practice just the opposite of what the law requires. Bayh-Dole is almost but not quite entirely a law of good-sounding intentions–not actions, not actual performance.
The university patent broker version of Bayh-Dole–inventor loathing, monopoly-loving, self-interested grubbing–has eaten away at the personal integrity and commitment to research in the public interest. The blood sucking has gone on now for 35 years. We are about to lose the generation of scholars who knew anything else. This would be a good time to either enforce Bayh-Dole or replace it with something attuned to the role and values of basic research, better matched to how new ideas arising in such research find use.