Bayh-Dole and Pandemic

Here is one of many commentators on the Dr. Judy Mikovits interview in “Pandemic.” At about the 4 minute mark, Dr. Robert Carter has this to say about Bayh-Dole:

What to make of Carter’s rebuttal to Mikovits with regard to Bayh-Dole? Let’s work through a transcript.

So about eight minutes in, after all this stuff that really means nothing, they finally talk about the Bayh-Dole Act and the fact that universities are now cranking out lots of patents. But I get to ask the question, why is that bad? I have a patent. USPTO number 7291711. 7291711. You can look it up.

Let’s do that.  Carter has two patents, both derived from the same application. 7291711 (issued 2007) and 7413874 (issued 2008). Carter is a co-inventor, with two others. Both involve identification of fluorescent proteins from “aquatic species”–from corals. Bioluminescence imaging is used to study physiology and infectious diseases. Both patents carry a federal funding notice, so they are represented as Bayh-Dole subject inventions. It appears these patents arise from inventions made while Carter was a graduate student. I can find no indication whether the patents have been licensed and if so to whom and on what terms. The cloned proteins show up in public databases, so it would appear that someone is making them.

But none of this has to do with the question Carter raises about universities cranking out patents. Why is that bad? Patents are like handguns. It’s the people that control them that are the problem.

A patent gives its holder the right to exclude all others from making, using, selling, or importing anything within the scope of the claimed invention. A patent  holder does not have to exclude all others. It’s a choice. On its own, a patent is a publication of the invention–teaching both how to practice the invention, often showing a best mode of practice, and laying out with some care in one or more claims the full extent of the invention. Holding a patent may be a bad thing when one neither practices the invention or allows others to practice it. It may be a bad thing when one uses it to make a product directed at public health but available only at a monopoly price far above the cost to develop the product plus a reasonable profit. It may be a bad thing when the patent arises in a project of distributed research in a given area in which others involved are denied the use of the invention so that those acquiring the patent can attempt to profit. It becomes more obviously a bad thing when the patent that’s not used or used unreasonably covers an invention made in publicly supported research–where the basis for providing the funding is that the work is done in the public interest and is not a subsidy for a private profit-seeking venture.

If one believes that the federal government should support profit-seeking from its health-related research, then perhaps patents are tools to be used. But even then, more patents does not translate into better success in profit-seeking. Fifty inventors at fifty universities all taking patent positions in results of research in a given field easily can create an impossible barrier to anyone trying to make, use, or sell anything that depends on access to even a few of those inventions–especially if each university insists on an exclusive license and won’t grant non-exclusive research or professional licenses. All those university startups? Exclusive licenses mostly. If another company needs a non-exclusive license, they are out of luck unless the startup is willing to sublicense non-exclusively. Add in all the overhead that goes with institutional contracting for a patent license and one might come away thinking that universities cranking out patents is not such a good thing for academic research or for economic progress–and certainly not for public health.

Dr. Carter, for his part, is blithe about it:

I pursued that through the University of Miami. Without their support there would’ve been no patent. I never would have done the work. There would have been no marketable product.

While it may well be true that without the university’s paying for the patenting, there would be no patent, it’s difficult to accept that Carter would have not done his dissertation research (and that’s what it appears to have been) unless he had the right to obtain a patent on the results. Perhaps that’s just how he was motivated. I would say that’s not a common motivation for graduate research. But if it is, we might ask–is that a good thing? Do research only if there’s a patentable invention in it, and a personal profit from institutional handling of it?

It’s also not clear that Dr. Carter’s patents have anything to do with there being a “marketable product.” If there even is a product. Once the methods for cloning bioluminescent proteins are published, how does the existence of a patent covering those methods have anything to do with motivating people to use the methods? It’s not like the methods need to be “developed” at great expense before they can be used. Someone might modify those methods to work better for their own purposes–but if there’s a patent, they can’t do that without infringing. They would have to get a license or design around the patented methods. What’s the point of licensing researchers to use patented tools? Even the NIH begs researchers to make research tools available (even when the NIH ought to–but refuses to–use Bayh-Dole to determine exceptional circumstances and limit contractors’ use of patents to exclude research and professional tool uses). A good example is disease diagnostic methods. Thus, while Dr. Carter has patents, and there may be products, there is a vast gulf left unaccounted for to support the claim that without the patents, there would be no product.

The world was advanced through capitalism. Whoo! Economic progress. Everybody wins.

Using the patent system has nothing to do with “capitalism.” A researcher getting a patent via the University of Miami is irrelevant to the charges made in the film with regard to public officials with a financial interest in patents and having control of health policy. Apparently “world” means “I” and “capitalism” means “patent monopoly.” How everybody wins is a leap, too.

But none of this is where Dr. Mikovits’s criticism of Bayh-Dole hits home. It’s not just any researcher holding a patent that Mikovits targets–it is federal officials holding patents (or even a personal financial interest in patents, or even an agency financial interest in their patents) in the same area in which they have policy authority. Dr. Carter, with no such responsibilities apparent, might give himself a pass. But because he gives himself a pass should we then give federal officials at the NIH, CDC, and FDA a similar pass? That appears to be Dr. Carter’s reasoning.

Obtaining a patent rarely has anything to do with helping an academic or federal lab invention get used or developed as a product. A patent may influence who is attracted to control an invention. And a patent may well influence how its holder asserts a financial interest in others’ uses. And the existence of a patent may lead others not to adopt the invention, to avoid the invention, to exclude the invention from platforms and standards, to design around it, and to undermine it. A patent, especially one poorly managed (such as on offer by default only for an exclusive license to make a commercial product based on some subset of claims and on terms that will be kept secret), generally works as a substantial disincentive to others to adopt and use any part of the invention it claims.

Can a system be abused? Oh yeah, of course. Every human system will be abused.

Mikovits’s criticism of Bayh-Dole is not based on a general claim that “human systems” will be abused. The objection is that Bayh-Dole permits the abuse of public positions responsible for national health care policy. Mikovits’s point is that Bayh-Dole contributes to this abuse of position–and it does, as I will point out–and repealing Bayh-Dole will expose the abuse and end it–which repeal may or may not do. Much depends on what happens in place of Bayh-Dole. We might swat a fly in the back seat of a car on the premise that the fly might distract the drunken driver and our killing the fly still will not get at the drunkenness.

But they go from there to something about public sector employees that are making money off such things.

No–the something is about senior officials in charge of public health policy and advising the president having at least the appearance of a conflict of interest in having a financial interest in patents based on one approach to dealing with viruses while publicly dismissing approaches to dealing with viruses that don’t involve either patents or high-tech research.

But you know, the last thing I checked, the University of Miami is a private university and I wasn’t working for the government, and my grant money came through internal channels.

Carter was working on a government grant. His work was funded in part by the government. His work was presented to the government for funding as a matter of public interest. Carter’s money came “through internal channels” only in the sense that the University of Miami acted as the administrator for the federal funds. That funding contract is what brought in Bayh-Dole requirements, and when Carter assigned his inventions to the university, that’s what triggered Bayh-Dole’s requirements for subject inventions. None of this matters to the Mikovits accusations–though it does matter in a bigger way that I will also get to. Carter the graduate student does not set national health policy by isolating bioluminescent proteins from corals using new techniques which his university patents along with the nucleic acid sequences and vectors. The director of NIAID does set national health policy and does have a financial interest (on the face of it) in patents that might be relevant to that policy. There’s a difference there, I am pretty sure.

Dr. Carter makes it appear that his inventions were made with University of Miami funding, not in work with federal support, and still that has something to do with Bayh-Dole. Lots of people are confused by Bayh-Dole. Bayh-Dole applies to Carter’s work because at least one co-inventor assigned his interest in the inventions to the University of Miami. Even then, nothing in Bayh-Dole requires the university to grant licenses, to grant an exclusive license, or to demand payment. Bayh-Dole rather enables the University of Miami not to have to make a public case for how its patent monopoly position better serves the public than open scholarship and innovation. It’s the bother of making a case for a better public benefit from an exclusive position that Bayh-Dole does away with. That’s what Dr. Carter perceives as “capitalism.” Very strange!

This is just an example of the poor or perhaps deliberate editing that leads to a non-sequitur and hanging accusation. If they want to make a case against Bayh-Dole, they failed.

It is not clear that the Pandemic interview even attempts to make a case against Bayh-Dole. It makes an accusation. The accusation is that public health officials with an interest in patents in the same area as their public responsibilities have a conflict of interest. That conflict expresses itself in such things as championing expensive, patented treatments and downplaying inexpensive unpatented treatments.

The Bayh-Dole part of the equation is that the law permits federal agencies to grant exclusive licenses–to the point of assigning the claimed invention–and keeping the terms of such exclusive licenses secret. While the Pandemic interview does not make a case against Bayh-Dole, the accusation is worth considering. And for that, the makers of the film have done a good job. You are reading this, after all.

Yeah, and at the same time they left a sour taste in the viewer’s mouth. The effect if palpable in its effect even though they were fallacious in their execution.

Agreed. Though Dr. Carter doesn’t point out how their accusation that Dr. Fauci has a conflict of interest is fallacious, and Dr. Carter doesn’t appear to recognize how oddly illogical his own retort is. The purpose of films like this is to create a stir. The risk is that people will react adversely to the tone and ignore the substance.

Is Bayh-Dole good or bad? From what they said, I don’t know. But I do know it benefited me.

It’s very sweet. Because Dr. Carter thinks that Bayh-Dole benefited him, the logic appears to be that there’s then no problem with public health officials having a personal interest in patents on inventions in public health and also advising the country on what remedies for a virus pandemic are worth funding and what remedies should be downplayed and withheld.

The Pandemic film treatment of Bayh-Dole is conflates federal ownership of inventions and federal employee/inventor financial interest in patents–neither of which are a matter for Bayh-Dole–with Bayh-Dole’s authorization of exclusive licensing of those inventions. Federal ownership of federal employee inventions is handled by Executive Order 10096 and codified at 37 CFR 501. Payment of a share of royalties to federal inventors is handled under Stevenson-Wydler, at 15 USC 3710c. Bayh-Dole handles when the federal government may take ownership of inventions made under federal contract when those inventions have been acquired by federal contractors and then not disclosed to the federal government and the contractor then does not choose to keep title or fails to pursue patenting. 35 USC 202-204 (37 CFR 401). Bayh-Dole does not apply if a federal contractor does not acquire ownership of an invention made under federal contract. Bayh-Dole also authorizes federal agencies to grant exclusive licenses. 35 USC 207-209 (37 CFR 404).

The Bayh-Dole issue is that Dr. Fauci has a financial interest in inventions he has made as a federal employee, and the agency that he directs may have or is attempting to license those patents exclusively. On the face of it, there’s a serious conflict of interest that creates an appearance of bias–toward one company over others, toward one line of research over others, toward one treatment over others. That’s not conspiracy theory. That’s an assertion that can be readily rebutted to show that whatever conflict of interest there may be has been satisfactorily managed by disclosure and recusal.

Appearance of bias, however, is sufficient to create public distrust in governmental policies and advice. The exclusive licensing part is key, and that’s Bayh-Dole. It’s not ownership of patents. It’s not licensing–royalty-free, non-exclusive, non-discriminatory licensing might be perfectly fine. Rather, it is the offer of exclusivity, of a patent-based monopoly over not only a particular health product but also over a potentially broad invention with the right to exclude other research or professional use or development of other products, even ones that don’t compete directly with any product that has been developed for commercial exploitation.

Bayh-Dole’s authorization of exclusive licensing–on secret terms–lies at the heart of federal agency organizational conflict of interest. When senior officials advising on health policy have either a personal or organizational interest in patents, that’s a serious conflict of interest. That’s the kind of conflict of interest that hit Fred Hutchinson Cancer Research Center when its management and doctors with a financial interest in patents and a startup kept a clinical trial going after patients started dying.

Think what you want about Dr. Mikovits’s interview and book. There’s plenty to pick at both in tone and substance. But: does Dr. Fauci hold patents via federal agencies? Yes. Could those patents be offered for license exclusively? Yes. Would he be in line for royalties? On the face of it, yes. It does not matter whether Dr. Fauci has received a dime in royalties. It does not matter whether his patents (assigned to the federal government) have actually been licensed. The appearance of conflict of interest is there, and–to refine Mikovits’s accusation–that conflict is not managed properly.

There’s no easy way to find out whether Dr. Fauci’s patents have been licensed, to what companies, on what terms. There’s no obvious disclosure of the situation. That’s a real conflict of interest problem. Dr. Birx is in a similar situation, for that matter.

Bayh-Dole fails here in two ways. First, it authorizes federal agencies to grant exclusive licenses to inventions owned by the government, and second it allows those licenses to be made on secret terms.

Federal agencies fail organizational and personal conflict of interest management when senior officials have a beneficial interest in patents on inventions pertaining to their public duties and those inventions aren’t offered royalty-free, non-exclusively. That conflict of interest does not disappear because an inventor assigns ownership to the government (or even to a company). There’s still a financial interest in the licensing of the patented invention. Even if an inventor waives a financial interest, if the inventor directs the agency or has some other role involving policy or actions that aims to derive financial value from that invention or to choose a favorite company for an exclusive license, there’s still a conflict of interest for that inventor-director. An exclusive license means that the federal agency is prepared to sue all other users of the invention, or to acquiesce in allowing the exclusive licensee to do so. If the federal agency has a financial interest in such litigation, it is easy to see how that interest might affect policy and regulatory enforcement–or even enforcement of the exclusive license itself.

Federal agencies fail worse on conflict of interest if those beneficial interests–its own and those of its senior officials–are not fully and publicly disclosed. But the second part of conflict of interest management–recusal–means a conflicted senior official or conflicted agency is not fit to serve in the role. One ends up with a choice between the public and patents, or between making clear one serves the public and leaving it in doubt because of the attraction of dealing in patent monopolies.

We can drill it down further. *Any* inventor or organization with a beneficial interest in a patent used to preserve an exclusive position has a conflict of interest problem when participating in the making of public health policy without at least (i) full disclosure and (ii) recusal. And here we get to Bayh-Dole on the federal contractor side. The law allows universities and university scientists with a beneficial interest in patent monopolies to create huge conflicts of interest. This has nothing to do with capitalism or socialism. It has to do, rather, with the power to benefit from exclusion, crossed with participation in public decision-making.

Bayh-Dole patent practices have led all of our leading universities and many of our leading scientists and doctors to compromise themselves–often for a petty, mostly worthless, often damaging patent position. It’s not the patent that’s bad. The patent system is a means of national publication of detailed information regarding an invention. Using the patent system is a worthy thing. But people and organizations in different circumstances must use the patent system for reasons appropriate to their missions and roles, especially where they declare a public purpose–such as nonprofits and their scientists requesting the use of public funds, or federal agencies allocating internal research funds.

Declared public mission organizations and researchers may use the patent system to publish inventions, but not to exclude all others or assert a financial interest for their own benefit while also participating in public policy formation or governance. Bayh-Dole sets up the conditions under which we lose nearly all our experienced health researchers and health research organizations–they have chosen patents over the public and now make it appear that doing so is not a conflict of interest and don’t even bother to properly manage it. Thus, when a well-qualified research scientist such as Dr. Mikovits speaks out–and people call her a crank–keep in mind that thanks to Bayh-Dole, we have virtually no one else who isn’t compromised by their conflict of interest or their organization’s conflict of interest who can or will speak out. For that matter, whether one is a crank or not, or disgruntled, or doesn’t get along really doesn’t matter at all. The claim is that Dr. Fauci has a conflict of interest enabled by Bayh-Dole. That claim stands on its own. If we wanted to pick over people for being cranks, we might start with Carter, who advocates creationism. But this isn’t about crankiness. It’s about how we manage national policy on public health.

This situation is parallel to that of participation in technology standards. You put all your patents on the table as available on fair, reasonable, non-discriminatory (FRAND) terms or you don’t participate. Bayh-Dole tells both federal contractors and federal agencies that they don’t have to offer inventions arising in federally supported research–especially public health research–on fair, reasonable, non-discriminatory terms. They also do not have to disclose the terms of their patent deals. They also do not have to report their deals while involved with public policy.

What Bayh-Dole does not require is that doctors and scientists–whether or not inventors–at any organization that declines to offer all of its public health inventions on FRAND terms must recuse themselves from participating in public health policy formation or governance. Recusal means: no participation in

federal policy formation or review
federal grant processes, such as deciding what to fund or reviewing applications
new drug approvals
regulatory oversight or actions.

If a university or federal agency exclusively licenses a patented invention to a company, it becomes an extension of that company’s interests. If a university or federal agency does not disclose the terms of an exclusive deal, all the worse. If the university or federal officials also have a personal interest in the license, more worse. Not publicly disclosed and managed. More and more worse.

This is something on which capitalists, socialists, and maybe even economic anarchists might agree–our judges (of public health) should not be on the take and should not work for organizations on the take. Dr. Carter argues there’s no problem–he was on the take to get a patent as a graduate student and it worked for him, so why not for Dr. Fauci, as head of a federal agency? Perhaps you see the logic at work.


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