We turn then to the final claim made by AUTM in its “talking points”–the stuff any advocate of Bayh-Dole ought to be repeating to legislators and faculty and anyone else appearing to lack sufficient self-delusion–that none of the fakery presented in the talking points paragraph would be possible without Bayh-Dole:
This would not have been possible without the Bayh-Dole Act.
History. Before the Bayh-Dole Act, the NIH and NSF operated IPA programs that required universities and other nonprofits to take ownership of any invention made with agency support whenever the university or nonprofit decided to file a patent application. The NIH program operated (in a revived form from 1968-1978, the NSF program started in the mid-1970s). Those programs were shut down as ineffective and contrary to public policy in 1978. Bayh-Dole was drafted by the same folks who did the IPA program, and introduced as legislation the year after the IPAs went down.
Everything AUTM attributes to Bayh-Dole was done and could have been done under an IPA program. See the history and critique by David Mowery et al. in Ivory Tower and Industrial Innovation. Moreover, the Kennedy and Nixon executive branch patent policies provided for contractors to own inventions, subject to federal agency approval for those contractors that didn’t have technical capability and a commercial market position–such as universities most universities did not for most inventions made in work they hosted. So even without an NIH or NSF IPA program (with its own subterfuges and end-runs), universities could deal in patent monopolies if they really wanted to. Furthermore, prior to Bayh-Dole and outside of the IPA programs, drugs and vaccines were developed with federal support but not by means of a university-brokered trade in patent monopolies. The Salk vaccine for polio, for instance. Or drugs to treat childhood leukemia.
AUTM recites a fake history, fake outcomes, calls it a success, attributes it all to Bayh-Dole. Pretty cool move.
Here’s a graph of FDA approvals of new molecular entities–drugs:
Do you see any Bayh-Dole effect? How about patents held by universities?
Bayh-Dole hits around the “6” mark. Series 5 is all university utility patents. Series 6 is those patents citing federal funding. The Bayh-Dole effect just jumps out at us, doesn’t it? Yes, if anything, the long-run trend is that universities have tended to acquire more patents on non-federally supported inventions, even as federal funding has become a much greater share of university research support. What’s with that?
But staring out at us from this graph is that unlike federal patenting, where before Bayh-Dole most federally owned inventions were available for public use immediately and often royalty-free, those university-owned patents are almost all held behind a patent monopoly paywall and are not available for anyone’s use. For the most part, only those willing to take an exclusive license to commercialize have an opportunity for access. (Yes, the NSF does have a work-around to Bayh-Dole for consortium inventions, and the NIH pleads with universities to find it in their hearts to make research tools available non-exclusively.) So this graph represents the growth in inventions delayed from public access for up to twenty years so that university administrators can seek out a few lucrative deals that otherwise they would not have a financial stake in.
And this is the rub. Here’s the GAO’s point:
We also noted that, to date, most of the revenues generated by the universities came from a small number of inventions.
During our visits to the universities (as discussed in apps. VI through XV), we found that the bulk of the revenues was generated by a relatively small number of inventions.
Most universities get a least three-fourths of their royalty income from one or two inventions, but JHU officials said they have not had a “big hit” yet.
MIT could not determine what percent of this income was derived from federally funded inventions. According to TLO’s Director, about 90 percent of the money MIT receives in licensing royalties each year comes from about 10 percent of its licenses.
And so on. The universities sit on a pile of patents, make most of their money from a very few licenses, and everything else is roadkill. The numbers–all the inventions, patents, licenses, startups–represent mostly waste effort, waste expense, waste delay, waste moral high-horse exclusion of everyone else. The claimed effort is that university administrative involvement is somehow essential for research inventions to get developed into products, and without products there can be no use (as if all use must first have commercial product), and without products, there can be no public benefit, and without public benefit, why those federal research “investments” are wasted. That’s the argument, to the extent there is even an argument and it’s not all spin without regard for the truth. It’s actually the case that things mostly go the other way. The administrators, by putting tens of thousands of research inventions behind patent paywalls, waste research opportunities for collaboration, for use, and from widespread use the impetus for development, for standards, for greater investment by industry.
Almost anything by way of a brilliant research discovery can be put to use without university bureaucrats, without patents, or with patents without a monopoly position held by a single commercial entity, or if with such a position without encumbering all the claims within a given patent, or even if so, only encumbering all those claims for only time enough for the licensee to choose what they will develop and freeing all the rest. In the case of inventions in medicinal chemistry, a single patent (or a patent family of continuations, divisionals, and continuations in part) may claim thousands of molecules, multiple methods of making these molecules and others like them, and multiple applications of the molecules, multiple means of delivering the molecules, and combinations of the claimed molecules with other molecules. A drug company might pick on molecule, one method, one application for its investment. But the rest of the invention remains off limits, behind a patent monopoly paywall created by a deal between a university administrator and a company.
Thus, we might observe that whatever “successes” there have been with faculty-led research resulting in commercial products in biotech and pharma, there’s still no indication that Bayh-Dole had anything to do with the “success”–the “success” would have happened without the involvement of university bureaucrats. Niels Reimers claimed as much for the Cohen-Boyer gene-splicing patents–that the techniques would have been used anyway, without the patents. The patents may have played an important role (I would argue so, at least), but not to enable use or commercial development but rather to delay the formation of proprietary positions that would block improvement of the techniques from general access.
And this may be a general observation for group innovation: use proprietary positions to delay independent proprietary positions that would disrupt the formation of a viable cumulative technology platform. Once that platform exists, then standards may be formed from essential pieces, and people can compete for proprietary positions in applications that interface with the standard or build on it in non-essential ways. If all proprietary positions are suppressed, we get a weird form of communism. If all proprietary positions are encouraged, a nascent technology fragments into institutional pieces and the only remedy is to forget it and move on for two decades when the patents begin to expire.
Thus, despite AUTM’s claim, it may well be that what AUTM recites (a small bunch of products, generally never with backing documentation that even identifies them, let alone shows which of the inventions were indeed properly identified as subject inventions) is the inventions that became successful despite Bayh-Dole. For an invention to succeed as a result of Bayh-Dole, we would have to have
a patentable invention
that could not be used at all but for extensive development–not for research, not by the public, not by professionals, not in industry, not as a standard
and that the invention was not so important that the federal government or private foundations were willing to fund that development,
and that it turns out could not be developed unless a single company or investor took on the effort–collaboration is not possible, development over time not possible, no commons, no consortia, no crowd funding
and that no such company or investor would be willing to do so unless it had the benefit of a patent monopoly as insurance for its expenditure–and the required development is unlikely to involve any further inventive activity that would establish such a patent monopoly
and for which researchers and inventors involved and anyone they might recruit to help them (such as patent attorneys, venture capital funds, business advisors, industry representatives) could not identify any company or investor willing to undertake this go-it-alone development themselves,
and no invention management organization believed the invention was worth the effort to attract such go-it-alone investment,
and so the inventors offered ownership to their university,
and so Bayh-Dole!
the university then was relieved that Bayh-Dole would prevent the federal government from intervening to demand ownership of the invention with the intention of placing the invention in the public domain, where it would never be used because of all of the above–
so that university administrators were able to secure the private investment necessary by obtaining patents on the invention and licensing the invention exclusively to a chosen company,
resulting in a commercial product with public benefits on reasonable rather than monopolistic terms, with the patent licensed to promote use and free competition because these are the conditions Bayh-Dole purports to impose on the patent rights to any such invention.
But even that’s a stretch. If this happens at all, it happens less than 1 time in 1,000. That’s the University of California estimate. But university officials do it the other way round. They claim everything and then try to find an exclusive licensee that will go it alone, regardless of the other options available for broad use and development that, say, follows on use. University officials cannot bring themselves to offer as a default any invention on, say, royalty-free terms to everyone who shows up. Apparently university administrators believe that patent monopoly paywalls run by institutional bureaucracies are in the public interest, and everything else isn’t.
And all of this they say is the result of Bayh-Dole. They argue they couldn’t act in the public interest without Bayh-Dole. That’s AUTM’s argument. To them, it’s rather a reverse funnel–Bayh-Dole is the tornado that sweeps up all inventions wherever federal funding builds a trailer park, and it is the role of university administrators to extract inventions from the dark cloud and place them somewhere over the rainbow as a patent monopoly.
I don’t have any problem with university folks assisting anyone who asks in managing inventions. There are ways to get involved that make a lot of sense. I don’t have any problem using the patent system along the way. I am not about to argue that we would be better off with no patents at all or that there is never a time to consider an exclusive license. I can even see the point that the federal government claiming inventions disenfranchises inventors, and in some cases that’s great and in other cases, it’s screwy. And I don’t think for a moment government lawyers and university bureaucrats coming to some arbitrary arrangement over ownership of inventions made with federal support–so that inventors are uniformly disenfranchised–have any chance of creating a workable practice in support of, well, most anything.
But it’s even more than a stretch. University officials don’t comply with large swaths of Bayh-Dole and federal agencies don’t enforce Bayh-Dole’s standard patent rights clause. Heck, even NIST’s standard patent rights clause operates outside Bayh-Dole in a number of places–in defiance of Bayh-Dole. Whatever it is that universities are doing with inventions, it cannot possibly be because of Bayh-Dole.
They don’t comply, what they claim as success would have happened without the intrusion of university bureaucrats, and they don’t want anyone looking at the horrible damage they are causing for all the federal research that does go to waste behind university patent paywalls that no one ever cares to pay to acquire. Most of that research would not form commercial products–but it would provide a spark for research collaboration, a motivation to send visitors to labs to learn techniques, an opportunity for rapid uptake and assessment, multiple sources of support for improvements contributed to a cumulative technology platform, professional and industry uses relieved of a demand to develop a royalty-bearing commercial product or risk retaining any license at all.
Federal invention research policy just sucks along, with AUTM working overtime to make sure nothing changes, because, you see, innovation in research policy just isn’t possible once the gold standard of Bayh-Dole has been achieved–
bureaucratic attempts to exploit patent monopolies–to force faculty inventors to use the patent system, to publish in the patent literature whether they want to or not on threat of ruining their careers–
based on research funded by the public in the public interest, without Bayh-Dole compliance or accountability, with general federal agency indifference to everything except meaningless paperwork gestures, and
with the appearance of public protections that in practice never operate and no way for the public obtain reports of utilization or initiate march-in or require federal agencies to enforce or to act on the government rights reserved under Bayh-Dole,
where one university patent deal a decade–or even every two decades–is sufficient for financial success at any given university, and tens of thousands of faculty inventions and 99% of the parts of any single claimed invention can be suppressed for twenty years–
this is the success that could not happen without Bayh-Dole.
AUTM’s account of Bayh-Dole is an expert cheat. Go ahead, read AUTM’s account of Bayh-Dole and delude yourself. That’s what AUTM wants you to do. Your willingness to be deluded is all they have to work with.