After Inventor Virtue

Posted on November 11, 2018 by Gerald Barnett

In After Virtue, Alasdair MacIntyre describes “emotivism” as the approach to morals that arose in the debris of the failed Enlightenment effort to find a rational basis for morals. Emotivism asserts that there can be no such rational framework and that individuals merely follow what appears “right” to them. From an emotivist perspective

there are only two alternative modes of social life open to us, one in which the free and arbitrary choices of individuals are sovereign and one in which the bureaucracy is sovereign, precisely so that it may limit the free and arbitrary choices of individuals.

The organization asserts its free and arbitrary purposes beyond debate by mere individuals. Individuals will never agree among themselves with regard to what is “right.” Thus, the organization asserts that individuals are moral as they conform to the will of the organization and take on the roles assigned by the organization:

The bifurcation of the contemporary social world into a realm of the organizational in which ends are taken to be given and are not available for rational scrutiny and a realm of the personal in which judgment and debate about values are central factors, but in which no rational social resolution of issues is available, finds its internalization, its inner representation in the relation of the individual self to the roles and characters of social life.

Organizations impose on us the roles we must play to properly serve the organization. We end up with character types of the inventor or entrepreneur as defined by university policy. Technology transfer “training” within a university insists that inventors and entrepreneurs must conform to the university’s definitions of these roles. There is no room for rational arguments made by individuals–because, as emotivism would have it, rational argument with regard to what is “right” to be done cannot possibly arrive at an acceptable resolution. The organization recognizes no rational standard beyond its own assertions. Inventor and entrepreneur become domesticate roles played out in the presence of university administrators.

MacIntyre’s point is that under emotivism neither the individual nor the organization has any foundation to resolve questions of what constitutes virtuous action. What constitutes good behavior, good practice, public good in the case of research findings, whether inventive or not, or valuable or not? An organization’s statement of morals under emotivism ends up being a wordsmithed version of whatever sounds right to administrators–and that moral code will be pleasant compliance and efficiency. Obey without waste, and be nice about it. That’s pretty much what university patent policies say these days. Hopelessly ugly stuff.

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Seaplane as innovation vector

Posted on November 10, 2018 by Gerald Barnett

Here’s a film about the age of “flying boat” air service, The Flying Boats.

Air mail service provided the entry point to develop the infrastructure that set the stage for the development of commercial passenger service.

The Lake Union Virtual Museum project has a video that describes the development of the Alaska bush plane service from the pilots who flew Boeing’s seaplane airmail service to Alaska (and who were rumored to add undocumented stops in Victoria, BC to pick up alcohol during Prohibition). Again, air mail came ahead of passenger service.

Note that the innovation that’s implicit in the development of airplanes capable of providing commercial passenger service across the Atlantic Ocean does not appear to depend on federally funded “research”–or, if such research is somehow involved, Pan Am did not have to negotiate patent licenses from a bunch of universities to obtain what it needed. Rather, there was a robust public domain of science and engineering.

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Bayh-Dole’s “subject invention” botch of the Federal Procurement Regulations, 1

Posted on November 9, 2018 by Gerald Barnett

Bayh-Dole botches its management of invention ownership.

To see how, we need to look at how Bayh-Dole in 1980 changed the Federal Procurement Regulation put in place in 1975. In particular, let’s look at how the definition of subject invention slips between the patent rights clause in 41 CFR 1-9.107-5 and Bayh-Dole 35 USC 201(e).

Keep in mind that Norman Latker appears to have been involved in drafting the Federal Procurement Regulation, the Nixon patent policy revisions that the Federal Procurement Regulation codify, Bayh-Dole (he had someone else type the draft bill so it couldn’t be traced to his typewriter), and Bayh-Dole’s implementing regulations. In a sense, then, Latker botches “subject invention” in Bayh-Dole, but I expect the detailed history is more nuanced than the apparent conclusion.

Here’s the invention ownership scheme under the Federal Procurement Regulation:

The federal government requires contractors to assign inventions made with federal support. The contractor must have patent agreements with those employed under a federal contract so the contractor can assign inventions to the federal government. The contractor doesn’t have to assign inventions if an exception applies. In any case, the contractor at all times is required to have equitable title in each invention made under contract.

Let’s look, then, at the patent rights clause at 107-5 in the old Federal Procurement Regulation. Here it is, broken into sections for emphasis: Continue reading →

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A clever misrepresentation at the origin of Bayh-Dole

Posted on November 8, 2018 by Gerald Barnett

Let’s see if we can isolate the origin of the Bayh-Dole Act. In about four minutes, you will read the following again:

The roots, then, of Bayh-Dole are to be found in a mischaracterization of the Harbridge House report of 1968, translated into a revision of the Nixon version of the Kennedy patent policy and from there into the federal procurement regulations, which formed the basis for Bayh-Dole, which was stitched together from those regulations and the dead IPA program.

Skip all the political spin about concerns over American technology competitiveness as measured by the number of US patents being filed by US companies. That’s just crass silliness. We are talking here about how it comes to be that the federal government gives itself the mandate to grant exclusive licenses to inventions owned by the federal government without proper supervision or accountability and to then delegate this right to nonprofit contractors, also without proper supervision or accountability. The Bayh-Dole cleverness was to make the delegation arbitrary and to preempt all other legislation that provided supervision or accountability in specific areas of research and development.

Various elements come together to permit the Latkerstein monster of Bayh-Dole to come to life. Continue reading →

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Illusions of Bayh-Dole: “manufactured substantially” 6

Posted on November 7, 2018 by Gerald Barnett

Now let’s look at Bayh-Dole’s treatment of federal employees who make inventions. Actually, there’s nothing in Bayh-Dole about it–Bayh-Dole applies only when a federal agency grants licenses to the inventions it owns. When the federal government allows a federal employee inventor to retain title, there’s no license. Instead, we have to look to other authority–and in this case, that authority is Executive Order 10096 (later amended and which has its own odd history). The regulations cover the scope of the government’s claim on inventions made by federal employees and how that claim may be administered. There’s a long section setting out the inventions that the federal government may claim. For our purposes, it’s enough to recognize that the federal government is authorized by Executive Order 10096 to make such claims on inventions.

However, the federal government does not have to obtain ownership of an invention even when it has the authority to make a claim on a federal employee’s invention. In a bizarre bit of drafting, 37 CFR 501.6 describes two situations–one in which the federal government has an equitable claim in an employee’s invention and a second situation in which the federal government’s interest in an invention is insufficient to make an equitable claim of ownership OR the federal government is not interested in making a claim of ownership even if it does have an equitable claim. This may feel complicated on first impression, but hang in there.

Situation 1: Government has equitable claim

Situation 2: Government lacks interest in invention to make an equitable claim or to act on its equitable claim

Now here’s the bizarre bit. 37 CFR 501.6 provides that the government can claim a non-exclusive license and impose conditions on the inventor’s use of an invention even when the invention falls outside the federal government’s claims to equitable title and even when the invention falls outside any other basis for the government to have any claim whatsoever. Even if an invention was not made in connection with an employee’s official duties, not during working hours, without the contribution of any federal funds, 37 CFR 501.6 still authorizes the federal agency to take a non-exclusive license and impose conditions on an employee inventor’s ownership of an invention. Continue reading →

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Illusions of Bayh-Dole: “manufactured substantially” 5

Posted on November 6, 2018 by Gerald Barnett

Bayh-Dole’s statement of policy at 35 USC 200 includes a provision calling for the use of the patent system “to promote the commercialization and public availability of inventions made in the United States by United States industry and labor.” Folks often misread this requirement as if it states that Bayh-Dole mandates commercialization–it does not. Rather, this provision focuses on the making inventions in the United States by United States industry and labor, regardless of whether those inventions are commercialized or are made publicly available. Note–not making of inventions in the United States by foreign industry, or making of inventions in the United States with foreign labor.

Bayh-Dole’s statement of policy at 35 USC 200 stands on its own. The rest of the statute provides guidance for specific situations–when a contractor licenses exclusively in certain situations, when the federal government licenses, and when the federal government permits a federal employee to own an invention. We have worked through Section 204 in detail in previous installments. Now let’s consider the federal side of Bayh-Dole’s use of the patent system to promote United States industry and labor.

First, a refresh. Section 204 of the Bayh-Dole Act positions itself as the most important part of the law. Section 204 requires that owners of subject inventions must, in exclusive licenses to use or to sell in the United States, have licensees agree to source product based on the invention “manufactured substantially” in the United States. The requirement is a weak one–it applies only to exclusive licenses in the United States, not to a patent owner’s own exploitation of a subject invention. The requirement is further weakened because it authorizes federal agencies to grant waivers to the requirement. The requirement is weakened further still because (i) the requirement is placed in the standard patent rights clause, (ii) federal agencies are given authority over the standard patent rights clause, and (iii) federal agencies have no obligation to enforce the standard patent rights clause. Thus, Section 204 is mostly administrative fluster. Continue reading →

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Wipe Bayh-Dole off the books

Posted on November 5, 2018 by Gerald Barnett

When Congress passed Bayh-Dole, they made a giant turd. There is pretty much nothing that someone can say about Bayh-Dole that is positive, true, and substantiated. Bayh-Dole needs to be, ahem, wiped off the books. Between the IPA program and Bayh-Dole, we have had fifty years of failed federal patent policy. Can’t we have had enough already?

Bayh-Dole does not work.

The IPA approach Bayh-Dole is based on didn’t work and was shut down in 1978 as ineffective and contrary to public purposes. Universities, foundations, and institutes now hold over 120,000 US utility patents, more than 50,000 of which recite federal funding. Most of these inventions are unavailable, behind patent paywalls, and of those inventions that have been licensed, most have not resulted in commercial products. And many of the products that have come about have done so despite university patents (and so universities have sued companies) or have been offered on unreasonable terms (i.e. terms that would not be reasonably expected if there were “free competition.” Bayh-Dole simply does not do what has been claimed it will do. What little that does become prove to be a public benefit mostly does so despite Bayh-Dole.

No one complies with Bayh-Dole. 

Universities and federal agencies alike ignore Bayh-Dole’s substantive provisions and refuse to comply with the standard patent rights clause. Federal agencies refuse to enforce the standard patent rights clause and refuse to act on the federal government’s rights. Bayh-Dole’s public protections, such as march-in, are just for show. Bayh-Dole gets away with this because the law delegates to the federal agencies the enforcement of the patent rights clause but doesn’t require federal agencies to enforce anything. So the federal agencies mostly don’t comply with Bayh-Dole or enforce Bayh-Dole’s patent rights clauses. Bayh-Dole provides no enforcement for the law itself nor meaningful penalties for non-compliance. Not only all that, but federal agencies actively circumvent Bayh-Dole by calling research contracts “other transactions” or asserting that the primary purpose is not research but “procurement” or “investment.” Advocates of Bayh-Dole call universities the “stewards” of the law. Foxes to guard the hens. Super crappy. Continue reading →

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28,000 federal patents and the monopoly meme went into a bar, 3

Posted on November 2, 2018 by Gerald Barnett

Howard Forman, a long-time patent attorney in the chemical industry turned federal employee, introduced the 28,000 unused federal patents meme into Bayh-Dole rhetoric in his congressional testimony in 1976. Senator Bayh includes Forman’s meme in his introduction of S. 414, which eventually, ahem, is passed and becomes Bayh-Dole.

Bayh has argued that the monopoly meme controls the use of federally supported inventions. If a company has no patent monopoly, then it won’t invest to develop any invention, no matter how useful the invention might be. According to the monopoly meme, inventions available to all will be used by none. Bayh exploits the monopoly  meme to argue that, necessarily, if the federal government makes inventions available to all, they aren’t used and the public fails to see a “return” on the federal government’s research expenditures. History shows Bayh was wrong, but no matter. The essence of Bayh’s use of the monopoly meme is that any invention made with federal support must end up as a patent monopoly in the hands of a company.

But Bayh does not propose simply changing federal patent law to vest ownership of patentable inventions with companies. There’s problems with that. What happens when the federal government funds research at a university? Bayh wants faculty inventors stripped of their rights–he makes that clear in his amicus brief in Stanford v Roche many years later. But who should choose which company should receive the patent monopoly franchise? That’s the pivot point for Bayh-Dole–contractors, not the federal government–should have the first right to choose their favorite company.  Continue reading →

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28,000 federal patents and the monopoly meme went into a bar, 2

Posted on November 1, 2018 by Gerald Barnett

Howard Forman’s 1976 testimony is where the 28,000 patents meme enters what will become the Bayh-Dole rhetoric. Senator Bayh uses Forman’s meme when he introduces S. 414 in 1979:

When the Government decides to retain patent rights on these inventions there is a very great chance that they will never be developed. Of the 30,000 patents that the Government presently holds, less than 4 percent are ever successfully licensed.

By 1979, Forman’s 26,000 patents that he recited as 28,000 patents has become 30,000 patents. (And, yes, the federal government did acquire about 4,500 new patents from 1976 through 1978–so apparently Bayh used Forman’s written statement figure of 26,000 patents. Anyone using the 28,000 patents figure is clearly being irresponsible with the facts). Bayh combines two elements that aren’t connected:

(1) There is a great chance that an invention will never get developed.

(2) The government acquires a patent right in any invention.

Element (1) is on average generally true. Estimates of patented invention use run about 5%. The question, then, becomes one of whether government ownership of an invention changes the likelihood of use. But even then, we are talking about averages–and averages throw out much of the structure of the data. We might find that government ownership is essential for the use of some inventions and adverse to the use of others. We might find, furthermore, that it is not ownership that matters, but what the owner does with the rights of ownership. We might find, then, that the government obtaining a patent works against use, or facilitates use. We might find that a mere patent right made available to all attracts use. And in other cases we might find that a patent right made available to all inhibits use. But in this last case, we might pause to wonder who it is that might be attracted, and who is inhibited. Continue reading →

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28,000 federal patents and the monopoly meme went into a bar, 1

Posted on October 31, 2018 by Gerald Barnett

Here’s an important–perhaps the pivotal–instance of the monopoly meme in the history of what will become the Bayh-Dole Act. Synopsis. Howard Forman introduces the meme of 28,000 unused federal patents in his legislative testimony in 1976. Senator Bayh repeats the claim introducing Bayh-Dole in 1979. Admiral Rickover dismantles the logic of both, but somehow the patent lobby prevails and we get the turd called Bayh-Dole, created out of fake history, unsubstantiated assertions, and fallacious reasoning. Cross the 28,000 patent claim with the monopoly meme, and Bayh-Dole results.

The point of working through Forman, Bayh, and Rickover is not just to point out the flaws of their arguments but to establish a framework for considering how federal research invention policy might be constructed–and in particular that bit of research invention policy directed at research on scientific frontiers and research addressing public health. At least, here, we might begin to see stuff we can rule out.

In 1976 Howard Forman testified before a Senate subcommittee on the need for a “uniform” government patent policy. Forman was a long-time patent attorney who helped shape both the Kennedy and Nixon executive branch patent policies. Norman Latker, R. Tenney Johnson, and Forman appear to be the government attorneys who lay the policy groundwork for Bayh-Dole’s great misadventure.

In his testimony in 1976, Forman introduces the 28,000 government patents meme into the discussion of federal patent policy. The 28,000 figure is actually a misstatement in his oral presentation. His written statement gives the figure 26,000.

Continue reading →

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