While the patent system might give freedom to just any inventor and patent owner, the federal Government is not any ordinary patent owner, but has particular purposes and interests and expectations–and those may be present in federal patent policy, in government funding agreements, and in stipulations on government-issued patent licenses. Don’t like those? Don’t play. There’s a flip side to the pharmaceutical industry boycott of promising medicinal compounds discovered with federal funding–the government could ignore the industry and build a new one based on a different funding and product development model. It’s possible. There’s plenty of room at the low end of the market, as generic (i.e., off-patent) drug manufacturers have made clear. Why does the federal government then choose not only to favor the monopoly version of the industry, but to subsidize it and act as if it is a virtue for universities to play to the monopoly version of the industry? Why is that? Preference, I guess. We may as well state the policy directly.
Our authors, however, argue for a different policy for Bayh-Dole. Perhaps. But they don’t need Bayh-Dole to dictate such a policy. If it did, it would cease to be Bayh-Dole and would revert to something closer to the failed IPA program, but now with requirements on the nature of exclusive licenses–it’s not enough that a patent license is differentiated by territory and “field of use”–it also must be differentiated by segmentation of the market. Is a product using the subject invention “upmarket” or targeting the “general public”? What pricing is “reasonable”? What features can be tied with the subject invention that are “reasonable”–and what features constitute a “tie” to drive up the price (and perhaps the profit)?
One might come up with a general rule, but rules usually fail. Either they are over-broad, and therefore stifle creative and flexible actions, or they are too narrow and it’s easy (though perhaps a bit of a bother) to get around them. This has been the general method of weakening federal patent policies. First, take a clear statement of requirements (say, the Kennedy patent policy) and then weaken it at key points (so it is easier to end-run). Now modify policy (such as in the IPA program) to make the end-runs formal. Claim the end-runs work better than the original policy and make a law (Bayh-Dole) to force the end-runs. Claim that this, too, is wildly successful. Modify the law (such as the 1984 amendments to Bayh-Dole) to weaken the oversight from the new practices. Ignore non-compliance. Do WTF you want, so long as it looks like “success.” The line of attack on public purpose has taken half a century of weakening, end-running, formalizing, and weakening anew. What we have with Bayh-Dole in its present form is a monster that emerges from a continuous urge to assert profit ahead of service. And that urge, in the end, leads to public distrust in the government-funded university research enterprise. It’s there to serve the rich and powerful, no matter what the claims may be about “public” benefit.
If there is to be a general rule, it will have to come with the uncertainty of a judgment that can relax it or step in anyway. In the Kennedy patent policy, the rules were strong but agencies could relax them where it appeared to them to be in the public interest. In the IPA program, rules were stated strongly, but with many qualifications that weakened their effect, making agencies have to act to enforce the rules. Under Bayh-Dole, the rules are made abstract and so become easy to claim are being followed by any action, and the agency procedures to enforce the few rules that remain are so cumbersome that they are never used.
We end up in a world of apparent freedom to do anything, since the federal government no longer has any clear purpose with regard to providing funding to universities to support research or in how the inventive results of that research are to be exploited. We might say that federal government research, by the operation of the Bayh-Dole Act, has become purposeless. But that would not be quite right, because although Bayh-Dole apparently precludes federal agencies from having any public purpose in providing research support to faculty at universities, university administrations insist that the purpose of such research support is to give them patents with which they can seek to make money. Bayh-Dole, they argue, gives them freedom to ignore whatever statements of purpose might be made by federal agencies in providing support and whatever statements of purpose might be contained in the proposals for funding provided by university faculty.
No matter if research might happen to be intended (by federal agencies, by faculty) to advance scientific knowledge–if patents result, they may be exploited (according to university administrators) in any manner the patent owner chooses, without interference from the federal government, from those that proposed the research, or from the inventors themselves (many state universities claim it violates state ethics laws for inventors to attempt to influence how the university manages their inventions). Bayh-Dole strips everyone involved in the funding and conduct of research in the public interest of their intentions–to provide a public benefit, for instance–and replaces it with whatever an institutional patent owner might do to derive a profit or advantage from owning the patent. In one of those deep ironies, university patent administrators then project their own understanding of the law–an owner of a patent on a subject invention might do anything–and use this projection to argue that institutional control is therefore necessary to protect the public from the potential malfeasance and ineptitude of individual inventors, who cannot be trusted to do the right thing. But their argument depends on repudiating the public purposes for which the funding was provided by the federal government in the first place.
If that’s a great federal policy on patents, it comes at the expense of the purposes for which federal money is allocated. One would think that Bayh-Dole is diametrically opposed to Vannevar Bush’s vision of the role of government in supporting the “free play of free intellects.” Instead, Bayh-Dole suppresses the outputs of such “play” and turns from what those “intellects” would do with their own work to what institutional patent brokers, immune from oversight, enforcement, or accountability, might do with the inventions they obtain.
That’s pretty crappy federal policy–routing inventions to bureaucrats and speculators without protections for inventors and without public oversight or accountability. How patent bureaucrats and speculators come to carry better judgment about public interest than faculty researchers, inventors, and federal program officers is beyond me. Sure, they are human, and citizens–but how does that give them better insight? There’s no reason why being adept at patent licensing gives them any better insight into public service than those doing the proposing and creating and those deciding what to fund and why.
We might even argue that patent administrators have a conflict of interest, wanting to prove that their decisions to own most everything and patent most everything are in fact justified–by the money being made. So they hide the data on use, promote the success of their licensing programs without good support, and refuse to change.
It may be that “middlemen” (as Bremer called them) are important to the placement of university inventions with industry. Certainly for some situations, they play an important role. But there’s nothing particularly compelling that supports an argument that we must always have middlemen to deal in subject inventions, or that they have better judgment than anyone else regarding what should be patented or how a patent should be licensed. In fact, it may be that these middlemen need to get out more, and perhaps then they’d see how dull, limited, inventor-loathing, and innovation-adverse their dominant practices currently are.
Perhaps that’s a bit of what Boettiger and Bennett are getting at, without saying it in so many words. Maybe it’s time to say things in so many words and get it out in the open.
Here’s as close as they get:
The outcomes have been positive on nearly all counts, but the Act inadvertently created a misalignment between the private interests of university technology transfer offices and public interests that benefit the innovation system at large or that enable access to IP for humanitarian purposes.
There is actually no reliable or robust data to support the claim that Bayh-Dole has had generally “positive” outcomes. Certainly not on “nearly all counts.” Perhaps what our authors mean is that many people repeat the claim that Bayh-Dole has been successful. The information available points to one university invention in 200 getting to commercial product, and of those that do become product, it would appear that some suffer from monopoly pricing that fails to meet “public” needs. There is also nothing to suggest the “misalignment” was inadvertent. It appears to have been intentional–from Latker drafting the law to moving agencies to direct the creation of the implementing regulations to the move to make march-in provisions too difficult to use to the raft of 1984 amendments that made use reports secret–not just select information in those reports–and removed restrictions on exclusive licensing and assignments. All of these changes were intentional, and created an environment in which technology transfer offices did not have any obligation to be aligned with any particular expression of “public interest” but their own–not the federal agencies’, not the principal investigators’, not the inventors’, not any activist’s or even anyone’s interest from industry. This is purposeful misalignment–but we can call it “liberty” if you wish–the liberty of the middlemen, the patent brokers, the speculators and regraters and forestallers of public interest activities in favor of paywalls and threats.
The whole point of federal government involvement in research other than to procure goods and services for government use is, to put it out in the open, to enable access to IP for humanitarian purposes. Not for government procurement, and certainly not as a subsidy so that patent investors might make more money at less risk than they would be forced to do otherwise. The humanitarian purposes recognized by Vannevar Bush were the advancement of scientific knowledge at its frontiers, so that there might be more resources available to those creative enough to address pressing problems in the world, such as advancing the state of medicine. And for funding those creative folks who did want to address pressing problems in the world using such new tools of science. There was nothing in Vannevar Bush about the necessity to first turn those pressing matters of public welfare into commercial markets to be gated by monopoly positions, making the public dependent on patent owners to gain any access to the beneficial results of federally supported research.
There is no need to divide humanitarian purposes into “developing countries” and the “U.S.” or “low-income” and “wealthy.” The point is to serve the “public”–not some special segment of it, whether powerful or pitiful. The division of what’s “humanitarian” is not particularly useful as a motivation for a general (if not arbitrary) federal patent policy. The purpose of federal funding for university research is at its core humanitarian. For our authors, humanitarian comes to have a different meaning–“what ought to be left over after the monopolist investors in commercial products have taken everything that they could possibly benefit from–if they had any sense of compassion in them.” Of course, golems and borgs are not known for compassion. As one venture capitalist told me (I paraphrase), “Sometimes university faculty come to us and pitch a story about how funding their startup would do such good in the world. After they leave, we laugh and laugh about how naive such people are to think we make investment decisions based on anything other than the prospect of making money.”
Nor does it work to somehow refer all decisions to support of an “innovation system.” Frankly, I don’t believe there is such a thing as an “innovation system”–at least not as a monolithic, “uniform” thing. Innovation happens where opportunity presents. But I do believe that about the time one constructs a “system” for innovation that innovation will be among the first things to attack that system–by showing up somewhere outside the system intended for it. To twist Dr. Strangelove, “You can’t innovate there, gentlemen. All innovation must take place in the innovation system.”
Boettiger and Bennett end with a hopeful call:
If the vibrancy and strength of the US university-industry interface is to continue, the next 25 years of Bayh-Dole should be characterized by universities paying greater attention to the innovation system overall, by increased access to patented technologies for research, by broad access to research tools, by a much stronger collaborative environment among universities with a corresponding diminution of the anticommons, and greater attention to managing IP in ways that explicitly support humanitarian applications of new technologies.
Despite the lack of data to support the idea that there’s “vibrancy and strength” in the university-industry interface, there’s a lot in this concluding vision worth considering. I don’t care much at all for Bayh-Dole. It’s a nasty piece of work, no improvement on the Kennedy and Nixon patent policies. Bayh-Dole hands middlemen control of patents on subject inventions without oversight. And university middlemen have made an utter botch of it. Not all middlemen, but enough that the dominant practice is one that puts a boorish but unproductive power play first under the argument that monopolies are the only, best, first, primary route to public benefit. Bayh-Dole is tolerably bad, but university patent policies and practices are intolerable–non-compliant with Bayh-Dole, in conflict with university values and purposes, disenfranchising faculty investigators and inventors, suppressing other innovation pathways, blocking collaborations and research uses and the formation of commons–and all at great expense, delay, inefficiency, bitterness, and bullshit.
Surely we should not have to wait 25 years–it’s been 10 since this article was published, and few universities come anywhere close to what Boettiger and Bennett envision. And whatever responsive practice there is, it hasn’t found its way to university patent policies. Inventors and investigators and industry and the federal government are all still disenfranchised. There are few make-use commons. University patent administrators still have little idea how to put public benefits first, even at the expense of commercial speculation in patent rights, even if it means giving up university income to see something happen. Perhaps the lesson from Bayh-Dole is that people will piss in their own drinking waster if given the chance. That’s what the middlemen have done–what AUTM has done. It’s a sorry sight.
It is time to repudiate Bayh-Dole for research to advance science and for research in the public interest–keep Bayh-Dole for procurement contracts, where it is marginally well suited. It is time to put things back on track. If inventions in projects directed at public welfare are to go anywhere other than the public domain or a patent commons, it ought to be up to the investigators and the inventors to decide on a course of action. What that course is, I don’t need to know. I expect, despite mistakes and greed and indifference, investigators and inventors have more on the line, more personal accountability, greater personal integrity, and more insight into why they do what they do than any middleman patent broker will ever have. If proximity with inventors is a good thing (and the advocates for Bayh-Dole argued proximity was a good thing), then the most proximate thing is for investigators (who propose the research) and inventors (who have the insights) to work out what ought to happen. That’s what Cottrell did, and we got Research Corporation. Time for more of that, and less patent speculation run by institutional players who can’t even bring themselves to comply with the law they’ve got.