A university technology transfer annotated reading list

So you want to tell heaven from hell, blue skies from pain. Got it! Here is a basic reading list of documents that frame the history of university technology transfer. I’ve put it in chronological order and provide links to documents wherever I have found them. There’s much more on the theory and practice of university IP management and strategies of technology transfer. This list covers the broader regulatory context, and as such, it reflects muchly a sort of administrative mindset, where playing with policy is thought to result in actual outcomes in practice. Whulp, perhaps but not necessarily in the expected, claimed ways.

1789 U.S. Constitution Article 1, Section 8, Clause 8. 

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

The copyright and patent clause. I’ve linked to a helpful site with commentary. This clause provides Congress with authority to create patent and copyright statutes. Notably, the clause is specific to authors and inventors–it’s almost as if it is the zeroth article of the Bill of Rights. If one wants Bayh-Dole to secure exclusive rights to inventions to organizations that contract with the government to conduct research or development, then there’s this problem of whether Congress has that authority, or at least with whether Congress can be clever enough to figure out how to make that happen anyway. The Supreme Court in Stanford v Roche chose instead to limit its interpretation of the scope of Bayh-Dole so that they would not not worry the constitutionality of the law.

1912. F. G. Cottrell, The Research Corporation, An Experiment in Public Administration of Patent Rights 

Cottrell was a professor at the University of California who developed the electrostatic precipatator, a device for removing soot from industrial exhaust. The University did not have a means to support patenting, so Cottrell started his own company, and as well started Research Corporation to manage a set of patent rights, with an industry board of directors, and with royalties going to the Smithsonian Institution to support research nationwide.

1933 United States v Dubilier Condenser Corp 

Two scientists, Francis Dunmore and Percival Lowell, working at the Bureau of Standards invented devices using alternating current in radio receivers and speakers in 1921 and 1922, including a power amplifier, using laboratory resources with the knowledge and permission of their supervisor. Later, the US sues, claiming the government should own the inventions and patents. The Supreme Court says no. “We should not read into the patent laws limitations and conditions which the Legislature has not expressed.”

1941 Walton Hamilton Patents and Free Enterprise

Monograph 31 published by the Temporary National Economic Committee under the general heading “Investigation of Concentration of Economic Power.” Hamilton provides a history of invention and patents and sets out a critique of present uses of the patent system and recommendations for “a policy for the national economy.”

1945 Vitamin Technologies vs Wisconsin Alumni Research Foundation

In 1923 Harry Steenbock, a professor at University of Wisconsin, discovers that radiation can form vitamin D in all sorts of things, including milk. He and others formed the Wisconsin Alumni Research Foundation in 1925 to manage patents that issued in 1928, 1932, and 1936, using royalty income to invest in the stock market, and using income from that investment to give an annual gift to the University of Wisconsin to support education and scientific research (only–there was an extended fuss over whether any other sort of research might be supported). WARF, backed by the University of Wisconsin president, refused to license the invention for use in margarine, aiming to support the Wisconsin dairy industry. A company sued, and in a final decision, the Ninth Circuit invalidated Steenbock’s patents, but not before offering a lecture on the proper subordination of rent-seeking to public benefit in patent matters.

1945 Vannevar Bush Science the Endless Frontier

Senator Harlen Kilgore leads an effort to establish federal funding for research, spread among federal agencies and distributed geographically so as to reduce the concentration of economic power created by the government’s reliance on a handful of universities and company contractors. Vannevar Bush works with President Roosevelt to counter Kilgore with a proposal for a National Research Foundation, run by citizens, accountable to the president. Roosevelt dies, Truman wants more control, and the National Science Foundation results–more like Kilgore’s vision but (in a total own) publicly attributed to Bush. National science is a concern of government. So is a war on disease. Open military research to civilian use. Fund basic research. Patent policy is item V. in the description of a National Research Foundation.

1947 Final Report of the Attorney General to the President on Government Patent Practices and Policies

Sometimes misnamed the “Biddle Report” (Truman fired Biddle, Wolfe was the AG, but David Lloyd Kreeger led the report work), the Report lays out the arguments for the federal government not enforcing patents that it acquires, not taking a money interest in licenses, not granting exclusive licenses (unless, in specific cases, authorized by Congress), and not attempting to police license agreements. The Report forms the basis for federal patent policy going forward–until Bayh-Dole and Reagan’s 1983 Memorandum. The Report also puts the Public Health Service on a collision course with federal patent attorneys and university patent licensing organizations that want to do exclusive patent licenses with pharmaceutical companies.

1947 David Lloyd Kreeger “The Control of Patent Rights Resulting From Federal Research”

Kreeger publishes an article that distills the findings of the AG’s Report. Easier and shorter read. Extensive footnotes. Kreeger quotes Horace Gray, an associate dean at the University of Illinois, testifying before a Kilgore committee: “There is no escape from the simple and fundamental truth that new discoveries derived from research supported by public funds belong to the people. . . .” Kreeger presents the arguments surrounding government control of patents made in federal work that are still smoldering today.

1948 Walton Hamilton and Irene Till, “What Is a Patent” 

So you couldn’t make it through Hamilton’s history of patents and government policy? Try a shorter version. Sets out the idea of patents, works through practices that exploit patents, and worries that “the patent system has gone astray.” “Large segments of the industrial domain have been engulfed in a flood of patents and caught up in the control of one or a few dominant corporations; whole industries have had their policies lock-stepped through the pooling of patents, under which a handful of industrial giants act as one.” Till, married to Hamilton, becomes a key player in the Kefauver hearings 1959-62 on drug pricing. Pharmaceutical companies, fearing price controls on antibiotics and the like, fought back, beating back one bill. But then the thalidomide disaster struck, and the Food Drug and Cosmetic Act was passed in 1962.

1948 Archie Palmer Survey of University Patent Policies, Preliminary Report

Palmer led a multi-decade effort to get universities to adopt patent policies, starting in 1934. This 1948 report from the National Research Counsel provides an overview of university research and views on patenting, as well as the text of patent policies for 37 universities. Palmer reports that Karl Compton, president of MIT, in the 1930s countered academic scientists’ idea that publication of research was sufficient. Palmer makes a case that universities should take a novel interest in patents: “Financial rewards are not the essential or necessary objectives in obtaining patents. Of even greater importance are the protection of the public against exploitation by irresponsible or selfish persons, the regulation and control of the purity or the reliability of the manufactured product (particularly in the case of a medical discovery), facility in licensing responsible concerns which can effectively commercialize the invention and invest sufficient capital to manufacture a product of appropriate quality without fear of unfair competition and piracy, the introduction of the invention to the public through proper channels and under proper controls, and the provision through patent protection for unhampered further development–all in the public interest.” There are the sorts of concerns that later will be implied in Bayh-Dole’s focus on the use of the patent system to promote utilization of inventions with public benefits. Palmer addresses arguments that patents are unethical, the effect of patents in science, sorting out the “equities” of inventions, and above all, creating university policy.

1950 Executive Order 10096 (Truman)

The executive branch addresses the fallout from the Dubilier decision in the absence of Congressional action. President Truman issues an executive order setting out the conditions on which the government will take ownership of inventions made by federal employees. Eventually EO 10096 (with amendments) is codified at 37 CFR 501. While Bayh-Dole deals with federal licensing of government-owned inventions, EO 10096 establishes how the government acquires those inventions when the inventors are federal employees.

1957 Archie Palmer Patents and Nonprofit Research

Prepared for the Subcommittee on Patents, Trademarks, and Copyrights of the Senate Committee of the Judiciary, this report provides a summary of the patent and licensing activity of the most active universities and patent management agents, including WARF, Research Corporation, Rutgers, and Ohio State. Mostly non-exclusive licensing, a few patents earning significant income, most rationales for patenting, however, having to do with quality control of products. Use of patents to promote competition. Here’s Rutgers:
“Under the foundation’s policy of licensing all reputable, financially responsible manufacturers, competition has been keen and the free-enterprise system has functioned without restriction, with the result that the price of streptomycin has been reduced from $25 a gram to 12 cents a gram at present.”

Charles V. Kidd, American Universities and Federal Research

Kidd writes as the funding for the National Science Foundation and for medical research (rather than, say, prevention programs) ramps up. Kidd describes the creation of the term “general-purpose basic research”–research not closely related to a federal agency’s operating mission. Kidd’s discussion of freedom and research is very much relevant, and his account of why federal agencies adopted proposal-based funding rather than person-based funding is fascinating. Kidd warns of the problems for universities that arise if the government uses “procurement type of contract” for research. Well, yes. Kidd presents a variety of university approaches to research–now worth reading to see the possibilities that most folks have forgotten, not because those approaches didn’t work but because they have been pushed aside.

1962 Archie Palmer University Research and Patent Policies, Practices, and Procedures

Palmer’s final report covers 945 institutions, 349 of which had patent policies. The report supplies the text for 147 of these policies. “Research, whether conducted in the library, the laboratory or the shop, is an essential and integral element of an effective educational program.” The shop! Think about that. The section “The General Situation” provides an overview of the situation immediately before Kennedy’s statement of executive branch patent policy. “At most higher educational institutions the compulsory assignment of patent rights is not considered desirable, except … in order that the institution may fulfill its contractual obligations.” Palmer reports over 100 universities use Research Corporation, and a few use Battelle Development Corporation.

1963 Presidential memorandum and statement of Government patent policy (Kennedy)

The link here is to a 1977 report providing “background materials” for the Subcommittee on Domestic and International Scientific Planning and Analysis of the House Committee on Science and Technology. The report is worthwhile reading in its own right. But here, we are concerned with Kennedy’s patent policy, which rationalizes the various practices of federal agencies and sets forth uniform practices within specified broad areas of federal activity. Harbridge House in its 1968 report: “The Policy established, for the first time, basic criteria to guide all executive departments and agencies not otherwise governed by statute in allocating rights to inventions made under government grants and contracts. The Policy was viewed as a first attempt to establish a central rationale for allocating patent rights government-wide in accordance with the public interest.” The memorandum divides activity into non-governmental markets and governmental markets. Companies with capabilities and non-governmental markets may own inventions made in federal work, except in matters of public health, where they must make a case for “principal or exclusive rights,” showing that their use of the patent system will be more likely to serve the public interest than would federal open access under the 1947 AG’s Report. Nonprofits and contract research organizations under the Kennedy policy always had to make this case for retaining patent rights. Delays and uncertainties in federal agency response to the request of university-affiliated patent organizations fueled arguments for a “uniform” policy.

1965 Mine Safety Appliances v United States

Charles Lombard, a faculty member, and Herman Roth, a consultant, made an invention while conducting research funded by the Navy at the University of Southern California. The research concerned use of a centrifuge to collect data on the effects of acceleration on the body, part of the Navy’s effort to develop technology to protect its pilots. Their invention was a crash helmet with a crushable liner. USC treated the invention as having been made outside the Navy research, licensed the patent to Mine Safety Appliances, which later brought a claim for compensation for government use to the Court of Federal Claims. USC used separate accounting in an effort to separate the helmet invention from the concurrent Navy-funded research.  The Court would have none of it. “Lombard and Roth may have thought that, by fiat, they could carve out this type of research from the Navy work and preempt it wholly for private non-federal benefit — but they could not do so. . . . The Government desired and paid for a royalty-free non-exclusive license resulting from that type of research (among others), and neither U.S.C. nor the inventors could avoid that federal right by unilateral action.” This sort of reach-through is what pharma companies feared if they participated in federally funded research.

1968 Harbridge House Government Patent Policy Study

The Study focused on three questions concerning federal patent policy: what effect does patent policy have on (1) industry participation in government R&D programs; (2)  commercial utilization of government-sponsored inventions; (3) business competition in commercial markets? The Study looked in depth at federal inventions patented in the years 1957 and 1962 for DOD, AEC, and NASA, and all patents 1957-62 for all other federal agencies. Of 2,024 inventions made by contractors, 251 were used commercially. Only 10 of these were from universities, and only 2 of the total were not DOD. 2.7% played a critical role in commercial use, and 5 patents accounted for half of commercial sales.

Of 126 federally owned inventions, 10 were used by 50 licensees–mainly in agriculture. Potato flakes and frozen orange juice were the big hit inventions. 5 patents in electronics and turbines accounted for 88% of licensed sales. Utilization was rapid–2/3rds were in use by the time a patent issued. Inventions made in federal agencies directed at civilian uses are “closer to commercial products when government development is complete than are DOD inventions”–suggesting patents are less important for use of civilian-directed inventions. However, for HEW and Interior inventions, it would be better to allow nonprofits to retain title.

The role of patents varied widely among industries and among companies within any given industry, and even within companies with regard to their commercial and government work. In general, contractor ownership of inventions was indicated where (i) the contractor had commercial expertise in the field of the invention but the invention was not “directly applicable” to that field and (ii) the invention has commercial uses but substantial development remains, or the market is small, or the market is dominated by “patent sensitive firms” and “market potential alone is not sufficient to bring about utilization.”

The Study concluded that a “uniform” patent policy was not advisable. Contractors that owned inventions and had expertise in the field did best at utilization; companies that licensed in inventions from contractors did less well. Universities seeking to grant licenses were the least effective at achieving utilization. A nonprofit patent development firm reported “10 to 15 percent of the disclosures it receives result in patents three to four years after submission; 25 percent of these patents are eventually licensed, with 3 percent profitable.” The Study downplays “large returns”: “At best, a well-organized patent program, using the personnel required to meet reporting commitments under government contracts, may expect to reap a modest return for a nonprofit organization.”

The primary impediment to company participation in federal research and development is “the compromise of private investment in research and invention,” which the Study calls the “peephole” effect, including private inventions first actually reduced to practice in a government funded program and may include background inventions as well–but even this concern is tied to the importance and role a given company gives to patents. A chapter is devoted to the case of medicinal chemistry. Latker later selectively cites this chapter to say that pharmaceutical companies demand exclusive rights to inventions made in government-supported work to rationalize restarting the NIH IPA program. The primary issue identified, however, is “contamination” of company assets by the reach of the changed PHS patent policy claiming a government license or title.

1968 NIH Institutional Patent Agreement

Developed by Norman Latker working with Howard Bremer of WARF, under the Kennedy patent policy, but designed to circumvent the need to demonstrate public benefit from patent exploitation better than from federal open access as well as the lack of university patent policies requiring assignment of inventions to the university. Incorporates key definitions from the Kennedy policy, including “To the point of practical application” and “practice and have practiced.” Latker used the IPA agreement as a basis for his draft of the Bayh-Dole Act when the IPA programs (at NIH, NSF, and Commerce) were shut down in 1978 as ineffective and contrary to public policy.

1971 Presidential Memorandum and Statement of Government Patent Policy (Nixon)

Preserves much of Kennedy’s policy but makes some modifications. Nixon states that studies and experience indicate that “a flexible, Government-wide policy serves the best interest of the public.” The policy distinguishes the rights of States and municipal governments in inventions made in federally supported work. It also replaces the Kennedy stipulation that if a contractor or assignee or exclusive licensee has not achieved practical application within three years of an issued patent that the government could require non-exclusive royalty-free licenses with “a nonexclusive or exclusive license to a responsible applicant(s) on terms that are reasonable under the circumstances.” When the government acquires rights in an invention, the contractor may get a revocable non-exclusive license–a necessary provision, given that the Nixon policy introduces expressly that a federal agency may grant exclusive licenses–a rather controversial assertion. AG Richardson circulated a memorandum arguing that federal agencies disposing of patent rights by assignment was not constitutional. Nixon’s revision also calls for the policy to be codified, resulting in the drafting of the Federal Procurement Regulation.

1974 Norman Latker “Progress Towards a Uniform U.S. Government Patent Policy for Universities and Non-Profit Organizations” 

Latker, patent counsel for HEW, gives this talk in Chicago at the Second Annual University/Industry Forum. He prefaces the talk–in which he speaks against current HEW patent policy–by stating “I am speaking for myself–on my own time, at my own expense.” Having told a joke about animals discussing policy and quoting Ayn Rand, Latker turns to the history of patents and the special place of “the creators” in the US Constitution and contrasting this with the Government’s policy on ownership of inventions made in work receiving federal support, suggesting that is a Soviet policy. Dismissing instances of government funded work reaching the market without exclusive patent rights, Latker insists that the government should “adhere to the system that will logically maximize delivery of the largest number of products to the public while still maintaining the creator’s motivation.” Turning to recent hearings, Latker describes the disagreement between the departments of Justice and Commerce on patent policy, with a special bit of mockery for Dr. Irene Till, who appeared representing Public Citizen. “The Justice Department, or any one else’s horror stories, should not be permitted to erode the patent system any further.” Latker appears not to acknowledge the contradiction in promoting inventors’ rights while advocating for voiding those rights in favor of nonprofit ownership as a matter of federal law.

1975 Federal Procurement Regulations

After a few failures, the codification of Nixon’s revised patent policy was completed in 1975. Title 41 (Public Contracts and Property Management) was provided with Part 1-9, “Allocation of Rights in Inventions.” The FPR provides patent rights clauses to be used by federal agencies, depending on the circumstances. A “short form” patent rights clause at 1-9.107-6 was specified for nonprofits conducting basic or applied research. Paragraph (c) provided that the contractor would assign inventions to the government unless the government allowed the contractor to retain rights. Either the contractor or the employee-inventor could retain rights. Paragraph (e) requires contractors to “obtain patent agreements to effectuate the provisions of this clause from all persons who perform any part of the work under this contract except nontechnical personnel, such as clerical employees and manual laborers.” As such, the short form does not require contractors to take ownership of inventions unless required to do so to assign to the government. Contractors could request a determination of “greater rights” under which the government would not require assignment. Portions of the FPR were incorporated in the standard patent rights clauses authorized by Bayh-Dole, although these FPR clauses are not referenced by Bayh-Dole.

1976 Howard Forman testimony on Government Patent Policy, Hearings before the Subcommittee on Domestic and International Scientific Planning and Analysis of the House Committee on Science and Technology (Rep. Thornton)

Forman had a hand in framing the Kennedy patent policy, introduced the meme of 26,000 federal patents (soon 28,000, and then 30,000), and called for a “uniform” federal patent policy. Forman’s testimony presents a script regarding patents and government patent policy that continues to the present. The government’s holding of patents is unproductive because the government lacks the profit motive. Without patents inventions available to all will not be used. Need for a “uniform” patent policy. Interesting bits–EO 10096 might be unconstitutional. If corporations merely hold patents until they expire without using them, that might be “misuse.” Forman represents that it doesn’t happen–patents aren’t used to suppress use, except by the government, by “negative suppression” (i.e., making inventions freely available).

1978 Raymond J. Woodrow Management for Research in U.S. Universities

Just before Bayh-Dole, Woodrow publishes this book setting out the practices of research management, including IP policies and management. Of note, Woodrow does not complain about conflicting federal agency policies with regard to inventions or anything else. Woodrow provides a great description of the canonical technology transfer processes at the time, and lays out the objectives of a good patent policy (and good copyright policy). “Generally, therefore, patentable inventions and copyrightable material cannot in equity be said to belong to a university because of the payment of the salaries of personnel, so other considerations  become necessary” (53). Interesting, no?

1979 Birch Bayh Statement of Senator Birch Bayh on S. 414

Senator Bayh’s introduction to the bill that would eventually become Bayh-Dole. Worries American innovation competitiveness. S. 414 would allow nonprofits and small businesses to retain patent rights, while sharing licensing revenue with the government (that provision never made it). Many different federal agency policies on procurement (not necessarily on ownership of patents, though). Delays by HEW in determining greater rights requests. Uncertainty of patent rights by federal contractors. US falling behind Japan, imports are up because–he argues–foreign companies take the results of federal research (no patent barriers) and then sell products back to us. Bayh-Dole, apparently, will change all this.

1980, 1984 Bayh-Dole Act (PL 96-517 94 Stat 3015)

Bayh-Dole is part of federal patent law. It establishes a limited form of patent (See 35 USC 202(a)) for inventions made under federal funding agreements and authorizes federal agencies to grant exclusive licenses. It’s rather difficult to just read the Bayh-Dole Act. There’s the original version of the law (see 94 Stat 3015), and there’s the amended version from 1984, which made significant changes, such as to when a subject invention must be disclosed, exclusive licensing restrictions for nonprofits, and advantages for small businesses. And there’s more changes after that. But that’s just the start. There’s also the codification at 37 CFR 401 (contractors, patent rights clauses) and 404 (federal agencies, licensing requirements). (Federal ownership of inventions made by federal employees is addressed by EO 10096 and 37 CFR 501.) There’s a different version of these patent rights clauses in the Federal Acquisition Regulations (See FAR 52.227-11, DFARS 252.227-7038 and -7039) and federal agencies may issue supplements–NASA, e.g., 1852.227-11, 70). Reagan’s 1983 Memorandum supplanted the Nixon patent policy and extended Bayh-Dole-like provisions to all federal contracting for research or development, but its provisions differ from Bayh-Dole. And in specific funding agreements, agencies may customize the patent rights clauses or substitute their own clauses if they can justify doing so. Bayh-Dole also shows up in federal regulations covering nonprofit contracting (2 CFR 2oo.315 and is implicated in 200.316). There’s also Stevenson-Wydler (15 USC 3710) takes precedence over Bayh-Dole (see 35 USC 210(e)) as does any “Act” passed after Bayh-Dole which references it and expressly states that it takes precedence (35 USC 210(a)). The Supreme Court reviewed Bayh-Dole in Stanford v Roche (2011) and ruled on the statutory construction of key parts of the law. So have at it. Much of the law is not enforced. NIST, which is delegated responsibility for implementing Bayh-Dole does not evidence it understands the law. The NIH refuses to enforce march-in. Universities routinely offer guidance and restatements of Bayh-Dole that are just plain wrong (out of date, never were in date, never would get a date). Don’t think that practice conforms to Bayh-Dole, or that practice even conforms to what universities or federal agencies say about their practice under Bayh-Dole.

1980 Betsy Ancker-Johnson (?) Letter of Rejoicing

In Norman Latker’s records. Recounts a backstory to the drafting and intra-agency politics to get Bayh-Dole passed. Ancker-Johnson identifies a number of the people involved, with special attention to Norman Latker and his policy war with James Califano, head of HEW under Carter. “I will not reveal the identities of the remaining members of the Executive Subcommittee, since I don’t want anybody to get fired the next time we have a change of administration. You already know Norm is one of these.” “You know, and I know, that it is we who did it, and I for one am damn proud of it!”

1983 Memorandum to the Heads of Executive Departments and Agencies (Reagan)

In 1983 President Reagan changed executive branch patent policy, instructing federal agencies to expand Bayh-Dole “to the extent permitted by law” to all contracting for research and development. Latker claims (see his resume) that he wrote this Memorandum for Reagan. Part of the deal that got Bayh-Dole passed was that Sen. Long would not oppose Bayh-Dole if Sen. Dole promised that Bayh-Dole would not be expanded from nonprofits and small businesses to all companies. The way to keep that promise but screw Sen. Long was to change executive branch patent policy rather than the federal statute. So it goes.

1987 Executive Order 12591 (Reagan)

Section 1 requires agency heads to delegate authority to federally owned, federally operated labs to follow Reagan’s statement of patent policy. In particular, labs are to “promote commercialization” (“utilization” is the codified purpose for federal agencies under Bayh-Dole) and are to “implement, as expeditiously as practicable, royalty-sharing programs with inventors who were employees at the time their inventions were made, and cash award programs.” Royalty-sharing creates a potential for conflict of interest in federal agencies where inventors also have policy-making or policy-influencing roles.

1987 In re Eddie L. King 

King, a federal employee (a fork lift operator), in 1969 on his own time devises a new pallet coupling system suitable for air cargo transport. Having made prototypes, but prior to filing a patent application, he allows the Air Force to test the system, then files the patent application. The Air Force later asserts it has a right to a license to King’s invention, and King appeals. The Patent Commissioner (why is this with the PTO and not the Court of Federal Claims?) determines that King used federal resources because he allowed the Air Force to test the pallet coupler and that testing entailed actual reduction to practice. Since King had not filed his patent application first, there was not constructive reduction to practice that might take precedence. Hence, the government gets its license. Nice worry list of what “made” means for inventions.

1992 Ciba-Geigy v Alza 

Ciba-Geigy (merged with Sandoz to create Novartis) acquired an exclusive license to a nicotine patch patent from the University of California. Ciba-Geigy then used the patent to sue competitor Alza Corporation, in an effort to prevent Alza from reaching market with a nicotine patch (Nicoderm) ahead of Ciba-Geigy’s product (Habitrol). The case considers sovereign immunity (UC’s way of weedling out of the litigation) whether the invention is covered by Bayh-Dole, as UC claimed (court determined it was not), and whether Ciba-Geigy had standing to bring the action against Alza (it did–the exclusive license transferred all substantial rights and so acted as an assignment of the invention). Good summary of the Surgical Laser Technologies case, in which the University of Washington exclusively licensed a patent to Sharplan lasers to be used to countersue SLT in a patent dispute. In 1994, the UC patent’s primary claims were ruled invalid. But not before UC had used its patent position to shake down New Mexico Tech for a share of its royalties on a nicotine patch, having claimed priority of invention based on UC’s patent-which-wasn’t. So much for UC “technology transfer.”

1992 Campbell Plastics v Brownlee 

Pretty much the only case of Bayh-Dole enforcement. Campbell plastics sends a patent application as its disclosure of a subject invention, but for some reason ticks off the Army and the Army demands title to the invention. You see, Bayh-Dole requires a disclosure in the form of a “written report,” Army required disclosure on a Form DD 882, and the court determined that a patent application, though it certainly discloses the invention, does not meet the report requirement. “Because Campbell Plastics’s piecemeal submissions do not adequately disclose the subject invention under the parties’ contract, the government may take title to the invention pursuant to FAR 52.227-11(d).” The broader idea is that the disclosure to the federal government of a subject invention may fail for technical reasons having to do with compliant report format. Very fussy, has little to do with innovation in America, but then ain’t that just like Bayh-Dole.

1992 Howard Bremer “Ten Years After PL 96-517

In a talk to the Texas Technology Transfer Association, Howard Bremer of WARF gives an account of the formation of Bayh-Dole. “Technology transfer” is not the transfer of technology, but rather the “transfer of a property right.” Bremer presents history of technology transfer that is constructed out of air. In his account of Bayh-Dole, Bremer describes the “almost adversarial” relationship of the university patent administrators and the DOD, AEC, and NASA, boasting that a “university group” “built into the regulations protection against both arbitrary exemptions to the law at agency discretion and to the exercise of march-in rights.” The revisions to Bayh-Dole in 1984 “removed many of the restrictions which had been built into PL 96-517 for the purpose of political expediency and gave the universities a much freer rein in conducting technology transfer.” That is, the amendments limited public protections in the law. The talk illustrates how cult-like and devoid of history the formalized university technology transfer community is.

1996 Rebecca S. Eisenberg, “Public Research and Private Development: Patents and Technology Transfer in Government Sponsored Research.”

The footnotes alone are worth it! Eisenberg “revisits the logical and empirical basis for current government patent policy in order to shed light on the competing interests at stake and to begin to assess how the system is operating in practice.” Eisenberg provides a history of major policy statements leading up to Bayh-Dole, and examines the statistical arguments made for Bayh-Dole. She points out that through 1976, of the 28,000 (or 26,000? or 1,000 a year from whenever) patents held by the federal government, only 325 were HEW’s, and 75 (or 23%) had been licensed. That’s a licensing rate comparable to that of the best university-affiliated patent management agents. Eisenberg’s account of the ATP program is especially valuable. The article concludes: “Patents undoubtedly have a critical role to play in facilitating technology transfer in some contexts. But they can also interfere with technology transfer and with the broader goal of promoting continuing technological progress. These goals may sometimes be better served by allocating new knowledge to the public domain. Government is uniquely situated to enrich the public domain, and we should be wary of disabling the government from performing this critical function.”

1997 Shaw v Regents of University of California 

Doug Shaw ran the University of California’s strawberry cultivation program at UC Davis. Money from licensing strawberry cultivars Shaw used to fund the program. UC unilaterally changed its royalty policy to take a bigger share of the strawberry income for itself. Shaw sued. The court ruled that “the patent agreement between Shaw and the University is a contract which incorporates the terms of the patent policy in effect at the time Shaw was hired. Although the University is entitled to revise its patent policy, it cannot do so with respect to Shaw because of its written agreement with him . . . .” And: “When a public employer chooses instead to enter into a written contract with its employee (assuming the contract is not contrary to public policy), it cannot later deny the employee the means to enforce that agreement.”

1998 GAO Technology Transfer: Administration of the Bayh-Dole Act by Research Universities

Prepared by Susan Kladiva, Associate Director of Energy, Resources, and Science Issues. After reciting the politically established conventional history of Bayh-Dole, the report finds that federal agencies do not administrate Bayh-Dole, calling such administration “decentralized.” The universities, as it were, self-regulate. The government relies on “voluntary compliance.” That is, nothing is audited or enforced. University policies varied in the interpretation of Bayh-Dole, and some found compliance difficult. “None of the universities visited had a specific policy in place to give priority to small businesses in licensing.” “Despite the perception that Bayh-Dole is working well, none of the federal agencies or universities we contacted evaluated the effects of Bayh-Dole.” Provides a critical assessment of the value of the AUTM licensing survey–including there’s no independent verification of the information provided. Overall impression given by the report is that everyone is asleep at the wheel but is sure that things are going great.

2000 Toby A. Appel Shaping Biology: The National Science Foundation and American Biological Research, 1945-1975

Appel traces the history of the NSF’s funding of biology. A recurrent theme is the challenge the NSF faces to find support for its “basic” research in biology–from the Bureau of the Budget, and from Congress–especially given the fascination Congress had with the overtly purposeful research by the Public Health Service and National Institutes of Health. A sort of competition for relevance. Also, although it may be an artifact of the narrative, the program officers at the NSF appear to be taken up with funding and the politics of allocating funding, and not much attention is given to the results of research–certainly not sufficient attention to show how Vannevar Bush’s idea that basic research could open up new frontiers that might be unexpectedly appropriated by medical science worked in practice.

2002 Public Citizen Health v. National Institutes of Health

Public Citizen Health, an advocacy group, sought under FOIA to obtain records of revenues received by the NIH and royalty information from licenses. NIH refused to provide this information. The case hinged on the testimony of Maria Freire regarding federal technology transfer and the interpretation of Stevenson-Wydler and Bayh-Dole. The court determined that FOIA exemption (b)(4) (5 USC 552(b)(4)) covers royalty information, treating it as if it were supplied by the licensee and not the result of a bilateral negotiation. The court ruled that the exclusive licensees involved would suffer “substantial competitive harm” and that were such information disclosable, the NIH could not operate its licensing program in the way it has: “The Court finds that if the royalty information were disclosed, the effectiveness of the Defendant’s licensing program would be impaired.” And to sum up, “The Court concludes that in balancing the public interest in disclosure against the private interest in withholding information, the private interest prevails.”

2004 Fenn v Yale 

Professor John Fenn, a Nobel laureate, makes mass spectrometry inventions. Yale’s licensing office doesn’t file a patent application, so Fenn files on his own. Fenn then makes his own licensing deal. Yale then claims Fenn misrepresented the value of the inventions and demands ownership and royalties. Fenn sues. The case depends on which version of Yale’s patent policy applies and an interpretation of the Bayh-Dole Act–a misinterpretation, given the later decision in Stanford v Roche.  Court finds that Fenn has a fiduciary duty to Yale, and requires assignment of the patent to Yale. Fenn’s “continuation of work and compliance with the patent policy for two prior inventions are evidence that he agreed to the changes.” Yale claimed that it must disclose Fenn’s invention under Bayh-Dole, but since the invention was not an invention “of the contractor”–Yale had no obligation to disclose Fenn’s invention. Yale wins the case, but does so by misrepresenting Bayh-Dole. The case circulates in university tech transfer circles as a warning to any other faculty–universities will beat down their own to protect their licensing programs.

2004 David C. Mowery et al. Ivory Tower and Industrial Innovation: University-Industry Technology Transfer Before and After the Bayh-Dole Act

The best book on the Bayh-Dole Act and its effects on university technology transfer. Although Mowery et al. gets Bayh-Dole’s basic bargain wrong–they write pre-Stanford v Roche–they do provide an account of the “political” history of Bayh-Dole that offers insights generally lacking in the canonical university histories. Mowery shows that while patent work at universities expanded after Bayh-Dole, the rate of that expansion was about the same as before Bayh-Dole–that is, Bayh-Dole may be a starting point for accounts of tech transfer, but that doesn’t mean Bayh-Dole started things.  “Remarkably, none of these characterizations of the effects of the Bayh-Dole Act cite any rigorous evidence in support of their claims.” Mowery et al. argue that whatever has happened since Bayh-Dole “might well have occurred without the Act.”

2011 Ashley J. Stevens, et al. “The Role of Public-Sector Research in the Discovery of Drugs and Vaccines

The primary apologist study for the efficacy of university and federal licensing of patents in medicine. Stevens was a long-time university licensing officer. Rohrbaugh is a primary point of control in the NIH for matters such as Bayh-Dole march-in. The study looks for all instances of patents held by “public-sector” (i.e., not commercial) entities (PSRIs) that are implicated in an FDA-approved drug or vaccine, including new uses. The study spans 1963 to 2010. While the study is used to support Bayh-Dole, it does not distinguish Bayh-Dole patents from others. “Our research has so far identified 153 FDA-approved drugs that were discovered at least in part by PSRIs during the past 40 years.” Because the study is based on FDA approvals, it does not include warfarin, streptomycin, 5-FU, and others. Just under 8% of new approvals are associated with patents held by PSRIs. The authors propose that Bayh-Dole patenting has somehow played a role. Well, yes. There’s that.

2011 Stanford v Roche 

“Since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor. The question here is whether the University and Small Business Patent Procedures Act of 1980—commonly referred to as the Bayh-Dole Act—displaces that norm and automatically vests title to federally funded inventions in federal contractors. We hold that it does not.”

Cetus, a Bay Area company, developed PCR, a method to replicate DNA sequences, and used PCR to analyze blood for HIV. A Stanford faculty member and member of Cetus’s advisory board sends Mark Holodniy, a Stanford post-doc, to work at Cetus for 9 months to learn PCR. At Stanford, Holodniy signs a patent agreement under which he agrees to assign to Stanford any invention that he makes which Stanford is legally obligated to own. At Cetus, Holodniy then signs a patent agreement under which he assigns rights to future inventions arising from his work at Cetus. What could go wrong?

Holodniy returns to Stanford, and claims to have co-invented with federal funding what he had been working on with others at Cetus. Holodniy assigns his invention rights to Stanford, and Stanford files patent applications, and later discloses the inventions to the federal government and elects to retain title. Cetus meanwhile is acquired by Roche. Roche develops and begins to sell an HIV test kit using PCR. Stanford notifies Roche that it must take a license to Stanford’s patents. Roche declines, citing the agreement it has with Holodniy. Stanford sues Roche for infringement and the case works its way through the courts. The Court of Appeals for the Federal Circuit determines that Holodniy’s agreement with Cetus takes precedence over his agreement with Stanford because it used a present assignment of future rights (“hereby assign”) rather than a promise to assign in the future. Thus, held the Court, when Holodniy attempted to assign to Stanford, he had no rights to assign, having already committed those rights to Cetus (now Roche), and thus Stanford lacked full ownership of the patents and lacked standing to sue Roche.

Stanford appealed to the Supreme Court, supported by scores of attorneys representing universities and the US Solicitor General. Stanford’s argument was that Bayh-Dole vested ownership of Holodniy’s inventions with Stanford, and such vesting pre-empted any disposition of the inventions under Holodniy’s agreement with Cetus (now Roche). The scores of attorneys agreed. Their various amicus briefs proposed various theories–Bayh-Dole vested rights with Stanford, or gave Stanford the first right of refusal, or denied Holodniy any right but to assign to Stanford. Former senator Bayh sent an amicus brief that stated he intended Bayh-Dole to vest rights with the contractor, and if the contractor did not retain rights, then with the federal agency. Inventors, he claimed, were last in line.

The Supreme Court rejected all this as so much blather, and used conventional statutory construction. Bayh-Dole, the Court observed, applied to inventions “of the contractor”–that is, inventions that the contractor had acquired by conventional means. Only then did Bayh-Dole come into play. Thus, Stanford could not rely on Bayh-Dole to void Holodniy’s agreement with Roche, and thus lacked standing to sue Roche for infringement.

Universities refused to accept the Court’s rejection and doubled down. The problem, they claim, is merely technical, that Stanford used promise to assign wording rather than using a present assignment of future rights. Justice Breyer, in his dissent, argued that there should not be a difference in these two forms, and university attorneys latched onto this argument–which is strange, because Breyer’s point is that there isn’t a difference. Universities changed their policies, claiming what they intended all along was a present assignment of future rights. But once Bayh-Dole is not a vesting statute, the Stanford v Roche case should have returned to Stanford’s patent policy, which required assignment only if legally required. Since Stanford did not have Bayh-Dole to require assignment, then its agreement with Holodniy, while prior to Holodniy’s agreement with Cetus, simply didn’t operate, as Holodniy had done nothing requiring Stanford to take ownership of his inventions. As for university policy, nothing in Bayh-Dole requires, mandates, or provides any special privilege for universities to take ownership of inventions made in federally funded work. Not that any university administrator will tell you that.

2018 Cleary, et al. “Contribution of NIH funding to new drug approvals 2010-2016

Their summary: “This report shows that NIH funding contributed to published research associated with every one of the 210 new drugs approved by the Food and Drug Administration from 2010–2016.” Provides an overview of other studies trying to estimate number of medicines resulting from discoveries made in federally supported research. This article’s method is strangely flawed–take some years of approved drugs and find all the publications “associated” with these drugs, and look for federal funding acknowledgements. But how does that show anything causal? Perhaps whenever something interesting is discovered, the NIH adjusts its research focus to fund work in that area. Ya think? The bigger issue, though, is that if Cleary et al. are correct, that publications by the dozens without an anchor in patents drives *all* drug development to FDA approval, then what should we make of the claim that unpatented federally funded work is never used?


HathiTrust Digital Library

Lots of government documents–hearings, reports, and the like.

Bayh-Dole Central 

Papers for Howard Bremer and Norman Latker, especially. Latker’s materials are mostly in a big bunch of unsorted, unlabeled files.

Wayback Machine

Great for viewing past university web sites for technology transfer policies and reports.

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