Sometimes there’s someone else who cleans up after the parade. Back in 2010 and 2013, Anthony Nicholls, President and CEO of OpenEye Scientific, published some articles about the problems of academic research, the failure of government to fund basic science, and the pernicious effects of the Bayh-Dole Act:
Let me be less circumspect: as far as science is concerned, there has NEVER been a worse Act of Congress in the history of the United States.
Bayh-Dole is a pretty wrong-headed law. It could be a decent law, had it been drafted by folks who weren’t focused on thwarting the federal government’s efforts to deal with the monopoly-minded pharmaceutical industry at a critical moment in the development of medicinal chemistry. It could be a half-decent law even now, if read carefully, enforced on its terms, and used with a clear eye toward advancing science and public welfare. It’s the last bit that’s the biggest problem.
One thing we relied upon in our university IP practice was the insights of those who were doing the work–not just inventors but the principal investigators, graduate students, company collaborators. We, usually, were not doing the work, though in some cases, I’d argue we made our technical contributions–it was not like we didn’t have our own training and aptitude for inquiry. But especially, going from lab to lab–I dealt with a few hundred labs–the expectation we had was that we were walking into situations in which folks knew a whole lot more about what they were doing than we did. In exchange, as it were, we knew way more about forms of IP, IP policies and regulations, and strategies to navigate IP, NIPIA, policies, regulations, expectations, and opportunities. What few of any of us knew–or at least could say we knew–was what next step was the right one, or best one for any given project.
After deals, we asked the question, “How did we come to be so fortunate?” The question was meant to make us look for the things that tripped the deal. Mostly it was things that no policy deals with–a love affair, a next-door neighbor, a researcher sending birthday cards to sales reps, an articulate graduate student, a former university researcher changing jobs, a chance meeting at a conference, a company rep who wants to show his company that academic collaborations are valuable. . . . Find any of that in discussions of “technology transfer.”
If something was new in the world, what then? What past procedure was so well suited to it? We might have to build something new, just for something that is already new. Or we might need to leave this new thing alone, and let it frame itself. How does anyone know what to do? Where’s the manual? Oh–other than trying to turn every new thing into a nail to be hammered by university policy.
One of the challenges, then, in dealing with something new is resisting the idea to fixate on it. Just because there is one new thing today doesn’t mean it is the only new thing–tomorrow’s new thing can make today’s new thing obsolete. But especially, new things in research often open up lines of inquiry. It’s like making a prototype to help you think about what really needs to be done. The prototype is itself like a telescope, a device for seeing better what the design could be, or ought to be, or can’t be.
Another of the challenges is to resist the impulse to use whatever volunteers itself–for instance, a policy demand (there can be exceptions to policy; this might be one; and besides, why should some policy written by a committee a decade ago manage to hit the correct default for this particular new thing–or any new thing, for that matter); or, the most convenient procedure you’ve recently done (such as, take ownership, file patents, publish a summary, and allow to die waiting for a speculative monopolist who wants to share).
When does it happen that someone can show you something that causes you to change your habits, even IP management habits? For administrators fixated on following procedures, having a sense of considered judgment is dangerous–or, as they put it, disrespectful of authority (as if advancing science is best accomplished by kissing the rings of assistant vice presidents) or unfair (to those who have kissed the rings and do not see the same benefit) or non-uniform (not serving the hobgoblin of consistency). That’s the thing about discovery, innovation, and the like–it does not give a rat’s ass about administrative authority, consistency, or fairness. If you want innovation, then prepare to be slapped around.
These sorts of thoughts work against the idea that there is a “national innovation system” involving research, or that research enterprise can be reduced to a set of procedures, or especially a single approach that’s useful first and foremost because it is “uniform.” To have any competing approaches might show how limited the dominant one actually is.
But even outside a national policy on research innovation–such as “use the patent system to promote the utilization of inventions arising from federally supported research or development”–universities are not compelled to use the patent system at all. There’s nothing in Bayh-Dole that requires university ownership of inventions or commercialization or exclusive licensing or licensing for money. Those actions are all the result of administrative and faculty decisions–and mostly of patent administrators misrepresenting federal policy and licensing practices.
Patent administrators claim that Bayh-Dole vests ownership of inventions with universities (even after Stanford v Roche) and otherwise that compliance with Bayh-Dole requires universities to require assignment of inventions. These claims are untrue–at least until NIST changes Bayh-Dole into a vesting statute by inserting a law-violating assignment requirement into the standard patent rights clause. Patent administrators–many, at least–claim that exclusive licenses are the best way, if not the only way, to use patents. Non-exclusive licensing is characterized as useless, a “tax.” The absurdities in these sorts of assertions are legion. If a non-exclusive license is a tax, then what is that sublicensing clause doing in the exclusive license? If a non-exclusive license is a tax, then why don’t universities swear off trolling their patents (er, enforcing their patent rights against industry that’s already adopted and developed without the need for a monopoly position)? If non-exclusive taxes, then what about the monopoly pricing that adds a patent monopoly “tax” to the price of products produced or sold under the exclusive license?
But the biggest misrepresentations on exclusive licenses are these: first, that most exclusive licenses that universities grant are in fact assignments, and in violation of Bayh-Dole. But the patent administrators don’t really much care. Second, that exclusive licenses are the best way to make money, or to develop an invention, or to contribute to economic development. The reality is that attempting to use exclusive licenses (er, non-compliant assignments) has proven to be wildly unproductive. Few licenses are granted, and of those, only a very few result in commercial product, and of those products, only a very, very few are priced reasonably or permit competition within a short period of time after introduction. And one of the worst things possible is a failed exclusive license–then the invention is sequestered for the duration of the license, or the patent, or the bankruptcy proceedings. Every so often, there is a big hit license–but even then, it’s clear that such big hits do not have to involve an exclusive license. Warfarin didn’t. Cohen-Boyer didn’t. Hall didn’t. Axel didn’t. Cisplatin did. Google did. SPICE didn’t. X-Windows didn’t. Apache didn’t. Digital computer didn’t. Internet didn’t. If all one offers is exclusive licenses, then it stands to expectation that big hit payouts will involve exclusive licenses.
The idea of a single university approach to inventions is ludicrous, horrible, mock-worthy. Who can possibly walk around spouting such stuff–other than patent brokers happy to be assured of a continuous stream of new work? Notice how the argument for university ownership of inventions ends with the license? Not with use or sale of product or public benefits from access to the invention. Notice how universities announce how many inventions they have claimed and patented (i.e., removed from circulation) and they never report how many of those inventions they have licensed–they report only how many licenses they have done, an almost completely unrelated measure (since they could have licensed a few things from the past non-exclusively, such as to the members of a research consortium).
Even the number of startups, fabricated and inflated as that number may be, only reflects the movement of a sequestered invention from one owner to another–many academic startups never produce a product, and of those that do, many produce a product that isn’t based on the invention that was licensed. The exclusive license serves to prevent others from creating a work-around to the product the company has produced. That is, the exclusive license supports nonuse of the invention, and the university casts this nonuse as a tremendous contribution to economic development–and gets paid to be complicit with the nonuse, and reports that income with its royalty income, as if such payments reflect the success of the invention.
How do we break the tyranny of these patent administrators? It is they, not Bayh-Dole directly, who are the problem.
Nicholls suggests an approach:
My second suggestion is that academics ignore Bayh-Dole. I’ve had a lot of academics tell me they can’t help trying to become millionaires, that Bayh-Dole forces them to act so. This is not true. The operations within universities, the offices of science and technology that seek to patent and to license, are entirely at the mercy of the bench-level scientists. They don’t have the skills to know what is truly novel and what is not: they rely on what the scientists tell them. So. Don’t. Tell them. America was changed forever by the simple civil disobedience of its citizens in the 1960s. What would happen if academics were to rebel—even a little—and stop supporting elements of the system that are ruining science?
To add to Nicholls’s proposition: under Bayh-Dole, an invention is not a “subject invention” until it is owned by a contractor. As long as universities refuse to comply with the (f)(2) provision of the standard patent rights clause, no invention made with federal support is a subject invention until it is assigned. No-one has an obligation to report inventions made with federal support, absent the (f)(2) agreement. And the terms of Bayh-Dole take precedence over university policy claims and employment agreements.
Furthermore, Bayh-Dole concerns only patentable inventions. An invention is not patentable until the inventor recognizes it as inventive, until the invention is fully conceived in the mind of the inventor, and has been tested to demonstrate that each element functions as intended (or, in the alternative, has been documented in a patent application). So don’t finish an invention–don’t recognize it, don’t test it, don’t file a patent application).
So, yeah, don’t report inventions made with federal support until you have to, and before you have to, break the stranglehold of the monopoly patent brokers on your work, and if you can’t get their fingers from the throat of policy and employment agreements, resist the standard monopoly model every step of the way–put your invention management strategy in your grant proposals, start a consortium that includes your invention management strategy, get the licensing office to give you an exception to policy (especially if the policy demands exclusive licensing or precludes the involvement of the principal investigator or inventor in the disposition of patent rights). Stop supporting the system that’s ruining academic science and industry collaboration and the pathways by which innovation has come about–especially the non-market, networked connections that work to develop an idea and vary it, awaiting a time for possible use.
In Lysistrata, the women of Athens refuse to have sex until the Peloponnesian War is ended. Perhaps bench scientists should do something similar involving inventions and university patent licensing offices.