One can see, then, where Bayh-Dole comes into play in this meaningless mess. Bayh-Dole was drafted by the same folks who created the IPA system. The IPA system was shut down in 1978 as ineffective and contrary to public policy. Bayh-Dole emerged the next year, slogged through Congress, failed, and then was revived, tacked onto a bill to make technical changes to federal patent law, and passed in a lame-duck session as a parting gift to Senator Bayh, who had lost his re-election campaign. Bayh-Dole was given the appearance of doing what the IPA program had done.
Norman Latker, the NIH patent counsel that had developed the IPA program, had a hand in the Nixon patent policy revisions of the Kennedy patent policy, and then had a hand in drafting the Federal Procurement Regulation that codified the Nixon patent policy (because the Nixon patent policy had added this requirement for codification, by perhaps total coincidence), wrote later that Bayh-Dole was based on the IPA program. Really, Bayh-Dole was based on the Federal Procurement Regulation, not the IPA program, but because the FPR, which become effective in 1975, was designed to create the opportunity to expand the IPA program government wide, really Bayh-Dole was constructed out of parts of the IPA and FPR, a sort of franken law raised from the dead to serve university patent administrators.
Bayh-Dole was presented as a law that pre-empted all other federal law with regard to invention ownership. That part was pretty accurate–with the addition that the pre-emption took place not when an invention was made with federal support, but rather only if and when the invention was acquired by a federal contractor. The fake presentation of Bayh-Dole got around this problem by asserting that inventions made with federal support were owned outright by the nonprofits that hosted the research (or–the story varied because it wasn’t in the law–nonprofits had a first option or inventors were required to assign or inventors had to give their research organizations the first right of refusal). The nonprofits did not have to decide to patent inventions before having the right to take ownership (as they did under the IPA program)–in the fake version of Bayh-Dole, they already had ownership and merely lacked paperwork to confirm it. According to this version of Bayh-Dole, they merely had to decide whether to keep that ownership or pass it over to the federal government. Inventors did not have ownership of their inventions until both the nonprofit and federal government had decided not to retain ownership. Senator Bayh argued this account in his personal amicus brief to the Supreme Court in Stanford v Roche. One might understand why scores of university attorneys then assumed that Sen Bayh must be right about a law named after him, even though it turns out he was most definitely not right at all.
The logic in operation here is worse that Catch-22. If an inventor wanted to own, university administrators would reject that request on the basis that the invention then must have value, and if the university administrators later decided the value wasn’t worth it–they didn’t have the money or time or expertise or didn’t like the inventor or there were politics at work–then they handed the invention to the federal agency, and then the inventor had to make the case that he (or she, or pick it) would better serve the public by obtaining a patent than would the federal government AND the university administrators would have to agree as well. They could, in spite or other meaningless motivation such as conflict of interest or potential for misusing university resources, argue that the invention rights should stay with the federal government, where under Bayh-Dole inventions could now be licensed exclusively by federal agencies.
This version of Bayh-Dole was nonsense, as the Supreme Court in 2011 ruled in Stanford v Roche. But this version of Bayh-Dole was highly attractive to university administrators and served to push many federally supported inventions into the emerging university-based licensing system that supplanted the agent-based licensing system as that system remained selective. This nonsense version of Bayh-Dole also gave administrators the basis on which to force changes in university patent policy. The patent policy, administrators claimed, must be changed to comply with federal law. Inventors must acknowledge that the university owns all inventions made with federal support and must disclose all such inventions for university patenting and licensing. Any invention the university declines to manage goes to the federal government, and inventors can beg rights back from the funding agency, but only with university approval, which will come with burdens. Once university patent policy had been changed, however, it did not matter what the federal law required. Bayh-Dole could be repealed tomorrow and university administrators would not change their patent policies to repeal the compulsory university ownership of faculty inventions.
Now let’s back to our blue circle, that within its black border contains all university patenting in the Bayh-Dole era. 
The circle and border don’t account for all inventing, or even all patenting by university personnel because university personnel have done their share of patenting outside university demands for ownership of inventions. That thin border does not account for all the unreported subject inventions that have been made at companies that became federal contractors (see 35 USC 201(f) and 35 USC 202(c)(7)(A)) when they took assignment to subject inventions by means of exclusive patent licenses from nonprofits and made additional inventions–also subject inventions–in their effort to develop commercial products. But even all those inventions won’t make all that much difference in the circle. Certainly, there won’t be an eclipse.
Finally, the circle’s border certainly does not account for all research assets not treated as patentable inventions–data, information, materials, collections, software, instrumentation, insights, hypotheses, theories, accidents, capabilities, new talent, collaborations, standards, and the like. In the context of all these other things, the blue circle and its black border, being depictions of patents without context, are largely meaningless.
And here’s another meaningless point. Less than half of the width of that black border represents the patent output of about a trillion dollars of federal research funding. There had better be something in that list of research assets that’s worthy of that trillion dollars of funding. I’ve seen it argued that the federal government accounts for one third of annual national R&D expenditures. It might be meaningless–surely, it is–to try to connect research expenditures with inventions, or even with discoveries, or even with commercial activity or public benefit from products based on, at some distant point, research. Perhaps research is more like “entertainment,” a sort of NPR for institutional science story telling, its purpose being to shape public opinion and discourse. Whatever tumbles out by way of invention or useful anything is happenstance, a joyous coincidence. But this, too, perhaps is meaningless. A trillion dollars for a thin line around a blue circle.
We can gripe that there are better ways to spend a trillion dollars. Are there? We can mutter that we would have more benefits from research if former military officers or celebrities or company executives ran the federal research programs and not federal program officers or academics. Would they do any better? We can speculate that the federal government should just give the money directly to industry, or to speculative investors, and let them use the money however they wish–other than, say, giving kickbacks to government officials. Would that do any better for research? or discovery? or new products–even ones that benefit the public rather than ones that create strangely addictive behaviors through which the public is efficiently separated from its money?
Here’s the sense of perspective offered by the blue circle and its black border. Money can’t buy you love. Federal money doesn’t buy inventions or innovation or much of anything that’s ballyhooed. That trillion dollars in the Bayh-Dole era was for entertainment research. Whatever happens will largely happen for other reasons, not federal funding. If important things happen, federal funding will seek it out, offer itself, and then take credit for being part of it all, as if it were the origin and cause. There’s enough money in play that an industry of technology transfer agents can spring into existence, grow and conventionalize into institutional habits, so that like hats at the horse races, a university cannot be caught out in public without its technology transfer program and brochure with its, um, meaningless claims about inventions, patents, licenses, startups, and a special process by which inventions go in and public benefit comes out the other end, or if not public benefit, then at least money from licensing, which, we are told, should be taken to show the excellence of university research and its commitment to public benefit. Surely, that’s not entirely without meaning.
But now you have a sense of perspective on it. It’s a little mostly cosmetic gesture in the play of how new things come to be in the world. It’s a little almost insignificant gesture even in the context of patenting in the play of how new things come to be. The cumulative effect of a trillion dollars of federal research funding for universities has been to expand the radius of a unit circle of patent gridlock in the US by less than two hundreths. Folks who think messing with Bayh-Dole will solve drug prices or unleash American innovation or most anything are smoking something potent. Anything of real importance will avoid all the uninviting institutional systems–statutory or otherwise–that have been imposed to intercept it and slurp off a share of value before it can ever slouch toward Bethlehem to be born. While in our baseball dreams, it may be true that if you build it they will come, when it comes to innovation, the “they” who arrive to play are not ghostly ballplayers of old but rather mostly those people who make their livelihoods building and speculating in the institutional systems built to intercept innovation in the name of promoting innovation.
The scheme for the public benefit generally adopted by university patent administrators is that no innovation should succeed without a university administrator making money on a patent license, and administrators are satisfied with reimbursement of their patenting costs and a 1% or 2% rake off, so it is not big deal for a speculative investor to make them happy. Flatter them in the press and make them believe they got a great deal, and figure out which to use of the ten or so possible ways an investor can minimize financial and risk exposure to a university licensing deal.
I know. I’ve lived that life. It’s challenging, it’s rewarding, and in its way it’s mostly empty. I keep thinking it should be better than this, that institutions ought to be able to help people who discover, who invent, who have some idea that would make a difference, would heal disease or provide unlimited energy or free us from cell phones. Perhaps. But whatever that institutional assistance might be, it does not appear to be rooted in institutionally compelled ownership of inventions and institutionally controlled patents.