Nine Points to Consider (with regard to Bayh-Dole)

No matter how one takes apart the assertions of the advocates for the Bayh-Dole Act, they just keep coming back, like some obsessive combatant out of Road Warrior. In the articles here at Research Enterprise, I have documented and reasoned and cited the evidence and the arguments that show that Bayh-Dole has been and continues to be a dismal failure. But things are beyond reason. Bayh-Dole represents a prophecy about good things to come, about potential, about bureaucrats trying so very hard, so earnestly, to make good things happen by owning research inventions, by attempting to license those inventions for commercial development. That prophecy has failed, but the adherents are deeply committed to the idea beyond all reason and double down. They can’t just walk away. This is not the Society for Putting Things on Top of Other Things, after all.

Without getting caught up in the details, let’s summarize.

1. Bayh-Dole is based on fake history. Universities were involved in technology transfer before Bayh-Dole. Bayh-Dole is premised on involving federally funded inventions in the same system of management that universities used for non-federally supported inventions. University licensing of inventions was not better than the federal government’s licensing, especially in biomedical matters.

The federal government did not own all inventions made with federal support prior to Bayh-Dole. Department of Defense contractors generally could own inventions made by their employees. The NIH and NSF operated Institutional Patent Agreement programs for nonprofits that required institutional ownership of inventions made with federal support when the nonprofit decided to file patent applications. Other federal agencies could allow contractors to own inventions on a contract-by-contract basis or on an invention-by-invention basis.

For universities, for biomedical inventions and basic science invention–Bayh-Dole represented no change in practice. At best there was a three-year lapse from the termination of the IPA program as ineffective and against public policy in 1978 to mid-1981 when Bayh-Dole came into effect. The 28,000 federal patents wasting away meme was just a political bluff by a federal attorney. But the fake history lives on, repeated as if Twilight were real. 

2. Bayh-Dole is grossly misrepresented. University administrators cannot accurately represent Bayh-Dole. They claim that Bayh-Dole allows universities to take ownership of inventions made with federal support. They play games with the meaning of “retain” to mislead inventors, legislators, and the public. The law does not give universities any special right to ownership of such inventions. The administrators claim that Bayh-Dole requires the filing of patent applications and “commercialization” of inventions. Again, neither is true. Administrators have cheated thousands of university-connected inventors of their inventions. They argue they do it for a good cause, even if Bayh-Dole does not require it. University administrators operate under a fake law, supported by a fake history–and they have had the temerity to put their fake version of Bayh-Dole into university policies.

3. Most of Bayh-Dole does not operate. The foundation of Bayh-Dole that contractors who own inventions made with federal support can preclude the federal government from requiring assignment of these inventions. That part operates. Almost all of the rest does not. The apparatus that would protect inventors, third parties, and the public does not operate. But for the things for administrative show the substantive requirements of the standard patent rights clause do not operate, are not complied with, are not enforced, are waived, are not acted upon by the federal government. How can a law that is faked and does not operate be said to have had any effect whatsoever?

4. The evidence presented for Bayh-Dole’s success is fake. There is no evidence that Bayh-Dole operates beneficially. The law is faked, the law is ignored. But there’s no data, no metrics. Bayh-Dole purports to make reports of invention use a government secret–ignoring FOIA requirements. AUTM, the professional organization of university invention managers, does not bother to track Bayh-Dole metrics. There’s no reporting on utilization, no date of first commercial sale or use for each subject invention, nothing that would show that Bayh-Dole promotes utilization, maximal participation of small businesses in development of inventions, free competition and enterprise, or US manufacturing of products based on subject inventions. Universities would report this data if it served their purposes–but it doesn’t. Instead, they fake the data. They claim inventions were made under Bayh-Dole that were not. They mix federally funded inventions with other inventions and report the whole mess as if it were all Bayh-Dole when only 40% of their patents recite federal funding–but 60% of their funding is federal. Odd, isn’t it? They talk about “technology transfer” rather than the licensing of patents based on federally funded inventions. They conflate university-industry “collaboration” with the licensing of patents based on federally funded inventions. It’s mealy mouthed. It is intended to deceive. It is bluff and spin intended to be taken as fact. It is fake.

Pause here. If Bayh-Dole did not change federal practice for universities and biomedical and scientific inventions, then how is it possible that Bayh-Dole has anything to do with university patent policy or licensing practice? Whatever has happened, it is not the result of Bayh-Dole. Bayh-Dole doesn’t operate. Something else operates. Something that university administrators don’t want anyone looking at, so they put all their emphasis on their fake Bayh-Dole, with a fake history to justify it, with fake metrics to persuade you that the law “is working.” Bluff becomes fact. Corruption of purpose becomes the norm. Ineffective and damaging practices become standardized as “best practices.” Ugly times.

5. The monopoly meme is not generally true. The monopoly meme claims that research inventions will not be used or developed unless a single company has a monopoly on each invention for the life of the patent and makes an attempt to create a commercial product. History and reason demonstrate that the monopoly meme is just more political bluffery. There are instances of companies securing patent monopolies. But those instances do even indicate that the patent monopoly was necessary for public use or development of commercial products, let alone show that what may have been necessary in some odd case is or ought to be made into a general policy. There are vastly more technological changes that have come about without patent monopolies than those that have come about with patent monopolies. And even if one were to find that the use of some inventions benefits from patent monopolization, there’s nothing that shows that such benefits arise when an invention is made in “basic” research where the purpose is to open up new frontiers of science. It’s like claiming that Lewis and Clark should have planted land mines in all the best land they found on their way west and sold those properties to wealthy east coast investors for “development.”

6. The monopoly meme is not even generally true for biomedical inventions. Heparin and insulin did not require patent monopolies. Vitamin D did not. Vaccines did not–not for yellow fever, not for polio, not for gene-splicing. Yes, companies obtained patents for vaccines–measles, for instance. But there’s no indication that patents were necessary. If one states the monopoly meme this way, then advocates for Bayh-Dole argue that monopolies are at least sometimes necessary or are necessary in certain “markets.” It is clear that if one insists on exploiting a patent monopoly, then one deals with others who accept the proposition that a monopoly is necessary. If one will only deal in a monopoly license, then the “market” one will find will be one that insists on a monopoly position. Unless the monopoly meme is generally true, however, then there’s no point to Bayh-Dole. Non-exclusive access–open access–is just as good, if not better, than monopoly control, for use and development of any given invention directed at public health. Again, the point here is not that patents are bad, or that patents cannot provide inventors or patent owners or investors with a financial return greater than they would otherwise have, but that patents are not necessary to public use or development of inventions that might improve public health.

7. Bayh-Dole preempts public purposes. The basis for Bayh-Dole is that privately controlled monopolies should take precedence over any public purpose under which federal funding has been allocated. Private–institutional, corporate, speculator–exploitation of patent monopolies becomes the public purpose of federal research funding provided to university faculty. Institutions, then, may use patents to preempt research uses, professional uses, and industrial uses in favor of seeking a single company to create a “commercial” version of the invention or a product based on the use of the invention.  Lost, then, are opportunities for an invention to become the foundation for other research (including research in industry), to become part of an open standard, to contribute to a cumulative technology platform, to be allow interoperability, to level the playing field among companies all seeking federal contracts. It is altogether strange public policy that institutions and federal agencies should obtain patents on publicly funded research for the purpose of dealing in patent monopolies. It is equivalent to operating a shadow patent system in which the only demand is that inventors are disenfranchised of their patent rights in favor of institutions attempting to reissue patents to their favorite companies for a share in the added income that might result.

8. University technology transfer is neither unfunded nor a mandate. There’s an argument that Bayh-Dole somehow creates for universities an unfunded mandate to patent inventions made with federal support and “commercialize” the invention based on dealing in that patent right. Obtaining patents, it is argued is complex and expensive. Licensing patents, too, it is argued, is complex and expensive. All true. But these arguments are beside the point. Bayh-Dole provides no mandate for universities to obtain patents or to license patents exclusively. A university may comply with Bayh-Dole’s patent rights clause by not taking ownership of any invention made with federal funds, and therefore have no obligation to file any patent applications nor to assert an ownership position nor to seek to license any invention. In that case, a university’s obligations under Bayh-Dole are minimal, inexpensive, and covered by the government’s payment of indirect costs for each research agreement. Whatever universities spend on “technology transfer,” it is something they choose to do, for a public reason or in pursuit of money. If a university spends more than it wants, or creates an approach to work that is more expensive than it is productive–that’s a university decision, not some “unfunded mandate” without any source for that mandate. Certainly Bayh-Dole makes no such mandate.

9. Conflating technology transfer and exclusive patent licensing is a matter of deliberately muddled thinking. Technology transfer involves the provision of knowledge that permits someone to practice what someone else knows how to do. In that, technology transfer is a form of instruction. Licensing patent rights has next to nothing to do with technology transfer. Certainly licensing patent rights is not necessary to technology transfer. Licensing patent rights can only encumber and delay technology transfer. Of course, there are companies that may refuse to be taught unless they obtain an exclusive patent license–but where is the public policy that demands that universities deal only with such companies? We might ask, then, where the mandate to “transfer technology” comes from. Certainly there’s no basis in federal patent law–no requirement to force inventors to seek patents or to disable the involvement of inventors in the publication or use of their work or to demand commercialization before public access or professional use.

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