In an article published August 29, 2021 in The Intercept, Alexander Zaitchik describes the passage of the Bayh-Dole Act as “The Great American Science Heist,” with the subtitle “How the Bayh-Dole Act Wrested Public Science From the People’s Hands.” He has a point. The premise behind Bayh-Dole–the work of government patent attorneys–is “we have to take rights away from the public (and from inventors) in order for the public to get anything ever at all from federally supported research.” Must be something taught in law school, because otherwise it doesn’t make any sense. (Oh, and if you don’t think that was the premise, then out with it–just what was the secret other premise?)
Early in his article Zaitchik writes about Admiral Rickover’s Congressional testimony regarding government interest in inventions made in federally supported work:
Speaking before the subcommittee, Rickover railed against the proposed policy changes. “Government contractors should not be given title to inventions developed at government expense,” he said. “These inventions are paid for by the public and therefore should be available for any citizen to use or not as he sees fit.”
A few sentences later:
It befuddled and angered him that the U.S. government would consider giving up its own shop rights to industries that would never do the same.
Let’s pause here and unwind this point. There’s actually a lot going on.
A “shop right” is what an employer gets as equitable interest in an invention for supplying resources used by an inventor. There’s nothing about “shop right” in federal patent law. A shop right is a judicial concept, a court-constructed implied license that ought to be granted by a reasonable inventor in recognition of the circumstances of inventing–employment, use of employer’s resources, use of employer’s information, and the like. A shop right license allows an employer to make, use, and sell product based on an employee’s invention for any company purpose–but within bounds, such as what a company has been making, using, and/or selling or what is “foreseeable” that the company would make, use, or sell.
In the debates regarding government invention policy, the issue wasn’t–and isn’t– whether the government should have a right to practice inventions (and authorize others to do so, for government purposes) arising in work that it supported. Even Vannevar Bush, in Science the Endless Frontier, argued the government should get a license for government purposes. That’s similar to a shop right, but in the context of contracting rather than employment. So, in a way, “shop right” might cover both situations, though the term shop right isn’t used in either government regulations or statutes. The issue was, rather, whether a contractor should also be allowed to take ownership of such inventions and so exclude all others, but for the government. In other words, the debate was not (and is not) about whether the government should avoid being excluded by patent from using an invention made in federally supported work, but whether a contractor, for having been selected by the government to participate in that federal work, should then also be allowed to have a right to use patents on inventions made in that work and so exclude everyone else, including other federal contractors, the inventors, and the rest of the companies operating in the same industry, or in any other industry.
If we are working on problems of innovation and effectiveness, does it seem obvious that we are better off having a federal policy that encourages contractors to exclude inventors from practicing what they have invented? No, not really. Under federal open access, inventors always have access to their inventions, even if they leave their contractor’s employment and start their own companies. They don’t have to beg a license from the contractor, if they even could get a license. Are we better off with a federal policy that encourages contractors to exploit exclusive patent positions against companies in their industry, or in other industries, for applications and technology areas for which the contractor has no capabilities, infrastructure, or markets? Doesn’t that route lead to patent trolling, which is just bassackwards non-exclusive licensing, which is exactly what the whole contractor ownership claim insists doesn’t “work”? (Because if it did, wouldn’t federal open access be in general more effective than adding a bureaucratic muddle-man to the transfer pathway, bottling everything up with patents and 30-page license documents, payments, reports, and audits–assuming a contractor ever finds someone to license to?)
Again–“title vs license” misses the issue. Shop right (whether implied license or express) isn’t the issue. The issue is “open access or contractor exclusion of everyone else but for the federal government.”
Simply, why should anyone assume, in the general case, that a contractor, for having agreed to receive federal funding to do research, is then by default the best suited to “commercialize” an invention made in a federally funded project? Makes no sense. Makes even less no sense if the “contractor” is just a university handling federal funds granted to support research proposed by faculty as being in the public interest. Why should a university be designated by default to deal in exclusionary patent rights, just for handling money and logistics to make it more convenient for the federal government to get money to those faculty researchers? Less no sense becomes nonsense as a matter of federal patent policy defaults. It may well be that it also makes no sense for a federal agency unit head to try to guess in advance whether some university might be able to do a better job dealing in patent exclusions than would federal open access, but that doesn’t mean the only option left is for the default to land with universities and other contractors.
If a contractor has default freedom to deal in patent exclusion (to the extent it obtains title from inventors), then in effect when the federal government awards financial support for faculty research, the government has also chosen that university to deal in patents–without any review of the university’s patent policies, practices, outcomes, or capability. If one is not going to have any review whatsoever, wouldn’t it make more sense for innovation and effectiveness to make sure rights stay with the inventors and don’t go by default into the hands of university administrators, or that the federal government obtains title and turns that into public open access, ensuring that even the inventors have access, and don’t have to beg a license to get it?
In the case of university faculty, even the idea of “contractor” skews the analysis. Faculty and student researchers work *at* contractors, not “for” them. While the university calls these researchers “employees,” they are not employees as a matter of fact–university administrators do not control the research proposed by faculty, don’t direct it, decide what to publish, or even who the researchers choose to collaborate with. More so, most university policies formally recognize faculty freedoms of research and publication. Universities don’t employ faculty or students for research, even if for some purposes they label faculty and students “employees.”
Rickover’s point is then not that the federal government loses its rights by allowing a contractor to get and keep title to inventions made in federally supported work, but that everyone else loses access. If the invention can be used by the government as-is, without much additional fuss, then anyone else with comparable capability can do so as well. No need for patent exclusivity. If the federal government intends to fund further development to make an invention useful for a pressing public purpose, then again there’s no need for a contractor to play at patent exclusion in order to attract money to do just that development.
We are left with inventions that the government doesn’t care to use, and inventions that lack a public purpose, and inventions that, even if there’s a public purpose, that purpose is so mediocre that the government has no interest in funding development to make the invention useful. We are really far down the list of inventions that a contractor might, as a blind default, attempt to exploit by means of patent exclusion. In the 1960’s the debate turned to “technology transfer” to enable “dual use” of largely defense but also space and nuclear inventions made in federal work.
The “dual use” idea comes largely from Vannevar Bush’s Science the Endless Frontier, under the rubric of opening up military technology to civilian use. Beat your submarine sonar into fish finders. But instead of opening up access and seeking out inventors and other experts to demonstrate such inventions, the bureaucratic solution was to champion the hiring of, well, bureaucrats to rally rah-rah interest in the inventions. Thus, the debate became whether federal bureaucrats could do the rally rah-rah as well as non-federal bureaucrats. At this point, there is no way for the public to win, or inventors, or technology experts, or entrepreneurs.
Rickover’s concern is why the government would allow any federal contractor to withhold an invention made in a public project from the rest of industry, from other industries, from inventors, and from the public and its entrepreneurs.
Here’s the fuddle:
“We have to withhold access to all inventions made in federal work to preserve the opportunity to raise private money to attempt to create mass-produced product based on the mediocre, half-baked inventions, and do this before anyone has had a chance to demonstrate the use of any inventions–even the important ones.
“The reward to incentivize that private money investment is the patent monopoly, including monopoly pricing and contrived scarcity of product, scarcity of other applications of the invention, and the scarcity of combining the invention with technology and products of others.”
“The default entity to own, and withhold access to, such an invention for the purpose attempting to create mass-produced product is the organization that the federal government has selected to handle the receipt and disbursement of federal funding on behalf of researchers.”
“The government cannot hold contractors accountable for failing to create any such product, as that would sour future contractors from attempting to create mass-produced product based on any other inventions, funded by investors attracted by the prospect of a patent monopoly.”
Once you strip the policy debate to these propositions, you can see why Admiral Rickover opposed the proposed “license” policy. It isn’t about the government gaining freedom to practice by title or by license–it’s about whether everyone else who might work with the government on public-purpose projects ought to be denied access to what any other “contractor” has been allowed to patent. And everyone else, too. Including inventors. Including capable companies that don’t need to find wealthy investors to fund development, if development is even needed.
Bayh-Dole doesn’t only enable stealing inventions from the public–it enables stealing them from industry access, and stealing them from use in industries distant from the industry proximate to the invention. Stealing them from being shared among federal contractors working on public projects, stealing them from competitive development by entrepreneurs, stealing them from standards and from cumulative technology and from common technology platforms.
When was the last time you heard a university talk about how its federally supported invention had become an industry standard? There you have Bayh-Dole’s effect on technology development, innovation, and the technology that exploits advances in science. Forty years of Bayh-Dole have robbed us of a century’s worth of technological advance.