How a Moloch state defends its own

A while ago, I was going around with someone about a technical bit in Bayh-Dole. She thought my position was “baloney” because her lawyers had said it was. The language in the law, though, doesn’t support her position, nor do the courts. There is not much case law, and no one these days thinks to litigate the issue. My disputant figured that she would “never persuade” me–perhaps that’s true, because to persuade me would require, say, evidence from the law and the courts, and apparently such evidence is not there.

Something else is at work, however, in taking positions over what Bayh-Dole allows and doesn’t allow. I’ll put it in the form of a general hypothesis: Public policy includes whatever is not enforced by public policy.

Whatever is allowed to happen is public policy.

There are then different paths one can go by. One can do things because they are allowed to happen by public policy, and declare that these things must be right and acceptable on that basis. Or one can do things because they represent what public policy apparently directs, regardless of the lack of enforcement or strange and unnatural outcomes. Or one can do things based on what appears to be sound practices, given the lack of guidance in public policy–or at least the lack of sanctions for ignoring the express objectives and requirements of public policy. This last bit requires some exercise of personal judgment. (I once worked with someone who consistently refused to do such a thing–would rather write a crappy deal that followed conventional terms than to construct a deal that was clearly responsive to the circumstances–because, if the conventional deal goes bad, it will be the fault of the convention, not one’s own judgment, can’t be faulted for that–and of course, the conventional deal is more likely to go bad, so all the more reason to follow conventions, er “best practices.”)

Consider Bayh-Dole. Here’s a mess of a law, with further mess in the implementing regulations, and more mess in practice, with folks making all sorts of assertions about the law, its purpose, what it does, and how its effects should be measured and evaluated. Some people apparently still think the text of the law is important, because they have come back multiple times to change the text. They’ve removed limitations on exclusive licensing and assignment, they’ve made reports on invention usage secret (or at least tried to), and if they have their way, they’ll turn the law into a vesting statute, despite the Supreme Court’s ruling that it’s not. Apparently, too, the Supreme Court still believes the text of the law matters. There’s some hope there.

We can look at any particular bit of Bayh-Dole and ask whether it matters. Take the requirements on the nonprofit use of income from subject inventions. The law and standard patent rights clause are clear–income can be used to recover expenses incidental to the management of subject inventions and the remainder must be used for “scientific research or education.” But as far as I can tell, no one pays any attention. Universities deduct whatever they want from their revenue streams–such as a set percentage of the income–for their licensing offices. And they allocate portions to departments, to be used as slush funds–could fund most anything. Perhaps any money spent at a university is “for education.” But that reading makes nonsense of the law.

Ah, but if the law is mostly spectacle and nonsense anyway, and never enforced, and rarely read, then the public policy is actually for nonprofits to use income from subject licensing most any way they like. If the income is received by a research foundation or other invention management agent, then perhaps that agent must go out of its way to spend the money on scientific research or education. But universities don’t really care one way or another about their own income from subject inventions. And the government, too, doesn’t care. So no one cares. Perhaps when a faculty inventor gets really pissed off and demands an audit of the university’s use of revenue from her subject invention, there might be some litigation, since universities that deduct more than what Bayh-Dole allows are often shorting the inventors the share policy sets for them.

We can repeat this process for a bunch of things in Bayh-Dole–assignments, substantial manufacturing in the U.S., preference for small businesses, compliance with the (f)(2) written agreement requirement, election to retain title, use report secrecy, scope of enforceable rights, scope of a subject invention, time when a subject invention comes into existence, meaning of “conceived or first actually reduced to practice,” and the scope of the government license to practice and have practiced subject inventions. For each, we will find that the law and regulations provide for one set of outcomes, but university practice largely ignores these and has created its own culture of practice that’s different but claims it complies with Bayh-Dole, or is necessary for compliance with Bayh-Dole. It’s just that on the plain text of the law and regulations, the claims are not true, not supported, just plain wrong. They constitute a faux Bayh-Dole, a Bayh-Dole imagined the way they want it to be, a convenient way, a way of habit–and typically a way that serves the interests of those taking advantage of the law, mainly university administrators, their speculative business partners, and the lawyers who advise them.

But from another perspective, the faux version of Bayh-Dole is endorsed by public policy. No one bothers to challenge the faux interpretations or practices. So they are public policy, too. It is as if Bayh-Dole was created to permit people to create their own private versions of Bayh-Dole, and once these private versions were adopted and became dominant, any other version–including the version set out in the law by people under the impression that the text of the law actually matters–gets suppressed.

Here at Research Enterprise, I have worked to make evident Bayh-Dole as it is drafted, working through the wording, considering it from the point of view of good statutory interpretive practices. I’ve chased down the history of the law and its precedents. I’ve looked at revisions and court cases–even with all the goofy pleadings by university attorneys. I’ve looked at metrics, alternatives, consequences. I’ve spent more time, I am sure, with Bayh-Dole than anyone presently alive. But for the most part, I’m also sure, the folks in university patent licensing practices don’t care. As far as they are concerned, what I write is “baloney.” Same with university presidents. When I documented that a university licensing office had fabricated startup statistics, his response was to call the documentation “bullshit.” Sure, the office won an international award on the strength of their fabrications, and shook free about $100m to spend over six years in part on the strength of their fabrications. But he had no answer for the documentation, and it was clear that both he and the licensing office were happy to fabricate startup numbers to mislead the public and the legislature. Fake news is good news if it looks like good news. And apparently, if it goes uncontested, fabricated figures and misrepresentations can be treated as “true.” And if treated as true, they can be used to change public policy–to attract more public funding, say, for a program that is made to appear “successful” and flatters those who have provided funding in the past. Trust us, it’s all for the best.

One might call this the corruption of public policy–misleading those who are responsible for allocating public funds and establishing public rules and assuring the public that everything is being done with the highest standards for the public benefit. One might say, a little fiction is necessary because legislators are doofs and the only way to get them to make the right decisions is to put it to them in a form they can grasp, and if that’s fictional, then so be it.

Further, how can it be corruption if public policy then allows such things? An old argument for business malspeech followed the line that in politics, “bluffing” is expected–people may say things that aren’t “technically” true, but everyone expects such lies, and therefore lying is acceptable. Politics, in this view, is like jokes. No one believes that a priest, a lawyer, and a turtle actually went into a bar, so it’s not a lie to say they did. Same for Bayh-Dole. It’s politics. No one needs to expect an advocate for Bayh-Dole, say, to tell the truth. So he can say whatever he wants. He can insist he is telling the truth. He can appear sincere. It doesn’t much really matter, though, because these assertions, too, need not be true. They are political reality, nothing more. And political reality is that it’s okay to bluff, to lie, to make up whatever serves, because no one expects the truth. The truth would be hard, and would disrupt the way things are.

In this world of opinions about stuff that’s expected to be bluffs, or lies, or fake, Research Enterprise is just more bluster, more opinion. It doesn’t matter what anyone says the text of Bayh-Dole says, or what a Supreme Court ruling says–it’s just opinion. It’s just fake. Persuasion is a matter of choosing sides, of social shaming, of abuse. It can be fake all the way down until it gets to some little beating heart that still wants to be loved or fears loss or seeks power without parents or doesn’t really know what to think or do.

We come to live, then, in a world of statements detached from evidence–from text, performance, reason–and form our opinions about what matters based on comparison to this free-floating faux version of things. Perhaps that’s the convenient thing to do–just adopt the prevalent point of view and earn a living. The law exists to be used when the government doesn’t like something. Nothing more. So don’t rock the boat when there’s a good thing going down that the government doesn’t bother with.

In all of this, there is the path of what we ought to do about patents in university research, supported by government funds. The faux version of Bayh-Dole argues for institutional ownership of inventions, of patent licensing–especially exclusive, of the expectations for institutions to make money from their patent licensing, that the number of patents obtained and licenses granted is sufficient to show the astounding effects of Bayh-Dole. These, in faux Bayh-Dole discussions, are really, really good things. Very few people I know in university tech transfer push back and do these things under protest, arguing that private ownership or company ownership might be better (in some way) than institutional ownership, or that no ownership at all might be better (in some way) than institutional ownership, or that there are more effective (in some way) forms of technology transfer than making a patent license negotiation precede any access to a research discovery or invention, or that universities should spend the money they make from licensing on someone other than themselves.

It’s this problem of what we ought to do (in some way) that actually is on the line. It’s not what public policy allows. It’s not even what Bayh-Dole “technically” requires. It’s what would work, it’s what we should do, it’s what people with integrity and experience ought to do, to practice their craft, to not screw over others, to benefit people they have been asked (or made commitments) to benefit–inventors, say, or the general public, or companies in the region, or developing nations, or whatever.

It’s odd, then, to use forensic rhetoric (about the past, about history, about evidence, about what texts read, about what courts have held) to make an argument about the present or future. How should research inventions be managed? What about research inventions made with federal support? What about those inventions where the federal support is to address a matter of public welfare? Or to advance the frontiers of scientific knowledge? And is “manage” the right word, here? Is the patent system really helpful? Should university patents be used to mitigate other uses of patents, such as monopolies that suppress use or that drive up prices in the presence of need and absence of competition and alternatives?

One might think that federal funding for university research targets those areas in which public welfare needs are the greatest, most pressing; where the frontiers of science might benefit from the most focused and well funded efforts. One might think that one purpose in federal funding is for there to be a set of patents that mitigate the effect of corporate patents–by opening up access rather than by competing to see who can create the most lucrative monopolies. It is just here, where the apparent public need is greatest, that one might establish private monopolies to extract payments. It’s like handing out monopolies on water in times of drought–except here the water is a way of doing something, such as mitigating the effects of a disease, and for that some folks think it is great to turn needs into “markets” and argue that extracting maximum revenue from these markets is just the thing to advance overall public welfare.

I’m not sure even Ayn Rand would go so far. It’s one thing to pursue with integrity one’s life’s course. Even to be selfish with regard to one’s life and not compromise with others who might attempt to rob you of your vision, your possessions, your purpose. But is such a thing is equivalent to exploiting the sick for their wealth, or holding up science or the application of science because there’s money in gating demand and picking favorites?

Bayh-Dole appears to be a public policy that states “institutionally brokered monopolies on findings made in research to promote the public welfare are the best/only/primary way to advance the public welfare.” Of course, Bayh-Dole doesn’t itself say that. It says to use the patent system to promote the utilization of inventions arising from federally supported research or development. But also, of course, no one really cares what Bayh-Dole says. I could be making it all up. I could be bluffing. There is more to it. And of course there is. But in the faux way of it all, it doesn’t matter if there is anything more to it. Anything more will just be fake, too, even if it cites things like laws. Once that’s the assumption, we have full-on bozonets–people living in a free-floating set of mildly self-consistent statements detached from anything grounded–evidence, reason, outcomes. Stuff is good because it conforms to other stuff that’s stated to be good, and the fact that a lot of people participate in making the same acknowledgements of goodness is sufficient confirmation. It is better to join than to establish. Everything else is “baloney.” Even if things are inside out, and the baloney is what the bozonet announces as good.

If we turn to what ought to be the case, what public policy might guide us to, what academic inventors might do with the patent system, and we don’t want to simply play politics, how then might we come to understandings about what we should do, what we should allow others to do? Do we as a public want drug prices to be really high? Is that a public goal? Should prices be high because we tax drugs? Or because private parties derive profits from high prices? Is this just merely a battle between the capitalist shareholders of pharmaceutical companies competing with the capitalist shareholders of health insurance companies, with the federal government providing substantial subsidies to lighten the burden of this fight on the public and to ensure that the competition between the shareholders has sufficient money at stake to be really fierce?

The looting will continue until there’s no looting left to do or someone shows up who has more power than the looters. Or, bullshit about Bayh-Dole will be public policy until someone steps in with the power to ground public policy in something other than whatever is convenient to say about it. Perhaps there’s a theory somewhere that the rule by bozonet, as if by an invisible hand, advances the progress of society to its optimum form of social justice, economy, and pursuit of general happiness.

If we get past such arguments, then we might face up to the question of whether it’s good to have a public policy that places the right to patent with inventors, only to have that public policy upended by a second public policy that says that university inventors should have nothing to do with patents (other than passively share in wealth from them) and that institutions should take control of such patents whenever they can, and especially for inventions produced with public support, and to have even that public policy upended by another that stipulates that the best thing institutions can do with patents is to preserve the monopoly in those patents on behalf of those who best can seek profits from the exploitation of the patents. I get it. I just don’t see that these are good public policies–not for scientific research, not for scholars, not for inventors, not for universities as social institutions, not for universities as profit-centers, not for innovation, not for economic development, not for the pursuit of general happiness (other, than the general happiness of the ticks that have got themselves gnawed into this source of livelihood–for them, I can see, it is a really good thing to leave just as it is, with a few more tweaks to disenfranchise inventors entirely and prevent any public accountability). Yeah, I see that.

What I don’t see is much in the way of arguments that this institution-loving, monopoly-creating, inventor-loathing, evidence-ignoring, public policy corrupting approach is all that harmful. That led me to wonder if the $40b a year the federal government hands to universities is really, for all the spectacle and waste of competitive grant proposals, just a kind subsidy for researchers and research administrators. You know, research for research’s sake, because any country that wants to be known as a superior country, has to have a pile of researchers who do research that’s excellent because there are publications and patents and people make money from patents. That is, technology transfer is just more spectacle in the entertaining parade called research, rather like running a lottery in which there is a great wheel of potential cures and breakthroughs and wild things and authoritative findings, such as that fraternity students might drink more than others–and as the wheel spins we ooh and ahh, but the stuff that actually affects our lives mostly comes from other sources, non-institutional sources, unmanaged sources. Is that so unlikely?

I, for one, would like to see Bayh-Dole enforced on its terms. I’d like to see Bayh-Dole rolled back to its original 1980 version and not the changes introduced in 1984. I’d like to see procurement contracts excluded from Bayh-Dole, so the focus of the law is on scientific research and matters of public welfare, as envisioned by the university faculty that choose to take these issues on and are judged worthy of public support to speed their work. Let procurement contracts follow the Kennedy/Nixon patent policy. I’d like to see inventors within university projects answer to the goals of the project, as set out by the principal investigators. I’d like to see what the principal investigators and inventors might do, if given the opportunity. Maybe they would be indifferent and ignore the inventions they make. Maybe they would be right in doing so. Or maybe they would be greedy and fight with each other and try to screw over anyone they could in their lust for money and power, hardly to be restrained by sober administrators or public advocates until the government with a show of force stepped in to restore order. Or maybe things would move back toward the strategies created by Cottrell and Compton and others–a diverse set of opportunities that faculty inventors could choose among, or, like Cottrell and Compton before them, they could create something new, responsive to their goals.

It’s not that I have great faith in the patent system. It does what it does. For folks that would otherwise keep things secret, perhaps it serves as an inducement to publish. In the age of craft and merchant guilds, the patent system was a tool to deal with private power over innovation. Sort of like the urban car saving us from the urban horse, despite the resistance of the horse lobby. But now, where the patent system is largely exploited by corporations and institutions, not inventors, one wonders whether patents serve such a meaningful purpose–at least with regard to promoting the progress of the useful arts. More so, trying to adapt the patent system to promote the advance of scientific knowledge, at the “frontiers” of such knowledge, say, or to adapt the system to advance the use of inventions to serve the public welfare–maybe these things are just too far afield from promoting the progress of the useful arts to bend the patent system to do much good at all for them.

There has been a long history of the federal government to shape a policy regarding patents involving matters of public welfare. It’s clear that people have been deeply uncomfortable with the idea that the government might identify a matter of public need, engage people to work on that need, and then have those same people obtain a patent and prevent anyone from using their work unless they get paid handsomely for it–or prevent anyone from using their work at all, for the duration of the patent, because no one steps up to pay them. Is it any better that institutions step in and say, we can get an even better price than the inventors could, and we can hold out longer and refuse to let anyone use with greater determination if we don’t get paid what we demand? Hardly. So for a long time, folks in the federal government and even in universities argued that among all the uses of the patent system, when it came to research presented to the public as on their behalf, and using their money, and especially to advance science or address a pressing matter of public need, some uses of patents were not appropriate, even if those uses were otherwise legal and even profitable.

That’s been the fundamental theme–of the 1947 argument that the government should own inventions made with federal support and should make those inventions broadly available for public use, of the Kennedy and Nixon patent policies that clarified when it might be better to allow patents to be held privately, but with limitations on the uses to which they could be put, to the IPA program, which though it aimed to slip executive branch policy still reflected the idea that not all uses of patents were suited to the results of research conducted in the public interest rather than for the private interests of institutions–whether universities, non-profits, small companies, or any old company–or for the interests of shareholders in corporations, or for people aiming to extract money from shareholders in corporations by funding startups with patent rights to such inventions.

This fundamental theme was even present in the original Bayh-Dole Act, with its limits on exclusive licenses, its prohibition on assigning inventions to invention management agents with conflicts of interest, its requirements for substantial manufacture in the U.S. for exclusive licenses in the U.S. to make or sell, its requirements for small business preferences in licensing, and its restrictions on how money from inventions can be used–not to mention reports of usage (why would these be needed, unless promoting use matters–something that is not a requirement of the federal patent system otherwise?), march-in provisions, and that really broad non-exclusive government-purpose license (to practice and have practiced–i.e., in the Kennedy patent policy, “to make and had made, to use and had used, to sell have had sold”). All these things point to a continuing belief that the patent system in general is poorly suited to the public purposes represented by government-supported research.

The patent system in general has been set up for a fundamentally different purpose, and to patch that system with Bayh-Dole, a law about federal agency procurement of patent rights, requires careful attention–something a lot of people aren’t up to, apparently, and so think that anything Bayh-Dole might require is, really, so much “baloney” because, well, it doesn’t fit with what they have been in the habit of doing, and what they have held themselves out as experts concerning, and how they have used their status as experts to make authoritative decisions, and how if things were ever seen in a different light they might have regrets, if not some people considering their suitability for their positions.

In the view of these folks, there is no point in considering what Bayh-Dole provides; or considering whether the patent system is poorly suited to the results of public welfare research, especially that research conducted at universities; or taking into account the long-standing federal (if not public) concern that patent monopolies are not uniformly good things for public purposes and institutions, and that patents, if they are to be used to promote use (rather than progress–i.e., diffusion through publication), should be used under direction, with public oversight to ensure that things don’t revert simply to the full spectrum of behaviors permitted by the patent system generally.

The faux version of Bayh-Dole argues that subject inventions are any old inventions, and whatever universities do with them is in the public interest–whether that’s creating private monopolies or suing industry or doing nothing, nothing, nothing at all. It’s all good. Leave it alone. It’s sound public policy because public policy is whatever is allowed to happen. You know, a laches defense to the law–you can’t enforce now what you’ve never enforced before. Adverse possession–we have squatted on this property and are entitled to it the way we use it. Even if things were “working”–that all those private monopolies led to use and that use led to public benefits on reasonable terms–there would still be this nagging question about the thought that things shouldn’t be this way. You know, like plantation owners wondering if maybe there could be a better way. But, of course, there is little such reflection. And things aren’t “working.” Most university patented stuff isn’t used, doesn’t get paid for, just excludes all others.

The new public policy regarding Bayh-Dole and research inventions is that it’s good enough that inventions get patented and a mild attempt is made to license them, and a license grant is the end of the institutional responsibility, other than to see that the institution gets paid according to contract. Look at university technology transfer “flow charts” of the “process” of technology transfer. It ends with the license (almost always, a single license), not at use, and not at use with public benefits on reasonable terms. The patent system, in this version, gets used to insert institutions into money-making ventures involving patent monopolies, and anything less than a full monopoly interferes with the prospect of this scheme. Of course, if this is public policy–since nothing appears to be concerned by it–then Bayh-Dole, in this robust view, makes sure that universities (especially) can attempt to profit from whatever financial benefits can be had from dealing in patents.

Use of university inventions doesn’t really matter. It’s part of the spectacle to give the general public the impression that it’s all good. Most university press releases about inventions report “potential”–not use. And if the public believes things are good, or folks are really trying to do good–and you know how complicated and difficult and high-risk technology transfer is anyway–then we do what we want, at the expense of investigators and inventors who do not get to do what they want, at the expense of entrepreneurs and company officials who do not get to do what they want, at the expense of members of the general public who might use such inventions except they cannot because they do not get to do what they want.

Institutions in a rather narcissistic way have turned Bayh-Dole–asserted as public policy–into the self-flattering idea that the law is really about them, about their undisputable leadership in deciding how to use the patent system, who to take inventions from, who to favor with monopoly rights, and under what terms. It’s a dream of administrative authority combined with a moralizing mandate to make money from patents, however one may.

Bayh-Dole makes a spectacle of protecting the public interest but in fact the government waives enforcement of the law, so that the public interest ends up being whatever institutions and their business partners do. That is, the public policy is to have a spectacle regarding the public interest and let everyone involved ignore the requirements of the spectacle. That’s the public policy under Bayh-Dole. To complain about non-compliance, or high drug prices, or disenfranchisement of inventors, or arcane things like state virtual re-issue of federal patents (by assigning under the guise of licensing), or loss of public trust in universities as agents of social benefit–all that is beside the point if the public policy is to let university patent administrators do whatever they damned well please. That’s their dream, and they are sticking to it.

Since there’s no particular effort to counter such institutional narcissism, what the universities put out as Bayh-Dole becomes Bayh-Dole, redefines Bayh-Dole, is public policy. Everything else is “baloney” if not bullshit or heresy or clueless or mean-spirited or rogue. And that’s where things stand. That’s the spirit of the age. That’s how a Moloch state defends its own.

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