AUTM’s invitation to delude yourself, 3

Posted on July 18, 2018 by Gerald Barnett

To show how clueless the universities have been about Bayh-Dole–look at this finding from the GAO’s 1998 report on university administration of Bayh-Dole inventions:

The policies varied among the universities in connection with how they determined whether the invention was created with government funds.

That’s nuts. Bayh-Dole’s definitions of “subject invention,” “funding agreement,” and “contractor,” along with the rules of “scope” at 37 CFR 401.1, make clear when an invention is a subject invention.

There’s no basis for a university to have a policy about it–other than to insist that people know the definition of subject invention and gather the information that permits a determination to be made. And if information cannot be so gathered, then that in itself is clear evidence that a given invention cannot be a subject invention–because subject invention requires a demonstration that the invention meets the definition:

An invention which is made outside of the research activities of a government-funded project is not viewed as a “subject invention” since it cannot be shown to have been “conceived or first actually reduced to practice” in performance of the project.

As auditors are fond of quipping, if it isn’t documented, it doesn’t exist. Continue reading →

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AUTM’s invitation to delude yourself, 2

Posted on July 17, 2018 by Gerald Barnett

Watch this sleight of hand by AUTM, a world leader in cheating with Bayh-Dole. First, a total non sequitur:

The Bayh-Dole Act is good for our national economy and also good for state and local economies. The majority of startup companies born from university technologies are located in the university’s home state.

Many startups based on university “technologies” appear to be paper companies. They are given a corporate structure but lack operations but for university-supplied space, a university-assisted web site, a university license (in a sense, to itself if the university has an equity interest in the startup), and perhaps even university funding–directly, as “in-kind,” or through a university proxy such as a “seed fund” or using university-administrated research funding.

Aside from the paper company aspect, having a startup locate in one’s home state does nothing for a local economy–a company locating in Seattle does next to nothing for Pullman. And where in the US a startup starts is pretty indifferent to the national economy. And for that matter, what’s the problem of an OHSU startup locating in Vancouver, Washington rather than in Portland, Oregon? Isn’t Vancouver an integral part of the Portland local economy? So how does this work, other than it only sounds good if you don’t think about it at all? Bayh-Dole has nothing to say about state and local economies. For that matter, Bayh-Dole has nothing to say about startup companies.

But now here’s the sleight of hand. Do you see it?

Thanks to the research conducted at U.S. universities, and to technology transfer, over the past 30 years, 153 new FDA approved vaccines, drugs and/or new indications for existing drugs were discovered through research carried out in public sector research institutions, consisting of  93 small molecule drugs, 36 biologics, 15 vaccines, 8 in vivo diagnostics and 1 over-the-counter (OTC) drug.1 This would not have been possible without the Bayh-Dole Act.

It’s a trick question, actually, since there are at least four sleights of hand. Continue reading →

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AUTM’s invitation to delude yourself, 1

Posted on July 16, 2018 by Gerald Barnett

Here’s AUTM’s “Talking Points” on Bayh-Dole. Let’s read the first paragraph together.

The Bayh-Dole Act: It’s Working

Actually, there’s no evidence that Bayh-Dole is working because (1) Bayh-Dole makes the evidence a federal secret; (2) universities don’t release the evidence if they even have it; (3) the available evidence indicates that the law is not working–including that universities would release positive evidence if they had positive evidence, so it’s really clear they don’t have positive evidence; (4) universities refuse to comply with the standard patent rights clause and federal agencies don’t have to enforce it or act on the rights reserved for the government–so whatever universities are doing, it’s not a matter of Bayh-Dole because they don’t comply; (5) universities have acquired over 120,000 patents in the Bayh-Dole era, over 50,000 of which cite federal funding–most are unlicensed, and of the few that are, most are licensed exclusively, and of those that are licensed exclusively, only a very few have resulted in a commercial product, and of those, most do not meet the Bayh-Dole standard for benefits available to the public on reasonable terms.

Further, there’s the collateral damage done, which university administrators also refuse to report. Most inventions are kept by universities from public use in the hope that someday they will be licensed exclusively. Only where universities are compelled, as in NSF consortia (which violate Bayh-Dole in a clever way), do they license non-exclusively. And if an invention is licensed exclusively, then it’s not generally available to anyone else. All those excluded have reason to work against the use of the invention–ignore it, undermine it, design around it (and therefore don’t use the benefit of federally supported research), or make it obsolete (exclude it from standards, do not make compatible product, create a different industry roadmap).

And we haven’t even started talking about the damage done by denying early adopters access to discoveries, of the lost opportunities for collaboration because university administrators insist on taking an ownership position and seeking an exclusive business “partner.” And we won’t mention (except here) the unmanageable institutional conflict of interest that arises when a university purports to look out after the public interest but instead decides to deal for profit in patent monopolies on that research. The collateral damage doesn’t exist, of course, if you accept that most federally supported research discoveries don’t matter anyway.  Continue reading →

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The “fix” in Bayh-Dole

Posted on July 13, 2018 by Gerald Barnett

People worry at times that there is a “gap” or “flaw” in Bayh-Dole. They see the problem to be that Bayh-Dole doesn’t out and decree that all inventions made with federal support are owned (or to be owned) by the institutions that host the research. They think (or assert) that it is a really great idea, in terms of practice, research, innovation, economic development, making money for institutions, and public benefit, for institutions to own such inventions outright, or at least as expeditiously as possible. So they want to fix what they take to be this gaping flaw by inserting an assignment requirement in the default patent rights clause because the IPA program had such a requirement. That’s now NIST’s approach–and no doubt it will “work” as a cheat around Bayh-Dole.

But here are the problems with the “put an assignment requirement in Bayh-Dole” approach: Continue reading →

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When experts cheat at Bayh-Dole, bonus

Posted on July 12, 2018 by Gerald Barnett

It is almost impossible to detect when experts cheat. In the Tale of the Ring of Gyges, in Plato’s Republic, a shepherd finds a magic ring that makes him invisible. He then launches himself on a crime spree and ends up becoming the king. Glaucon, who tells the story in the Republic, argues that the just man and the unjust man will end up acting just like the shepherd if they knew they could get away with doing anything they wanted.

And this we may truly affirm to be a great proof that a man is just, not willingly or because he thinks that justice is any good to him individually, but of necessity, for wherever any one thinks that he can safely be unjust, there he is unjust. For all men believe in their hearts that injustice is far more profitable to the individual than justice, and he who argues as I have been supposing, will say that they are right. If you could imagine any one obtaining this power of becoming invisible, and never doing any wrong or touching what was another’s, he would be thought by the lookers-on to be a most wretched idiot, although they would praise him to one another’s faces, and keep up appearances with one another from a fear that they too might suffer injustice.

It’s up to Socrates to find a way to show this is not the case–go check it out in Book II. For our purposes, it’s enough to recognize that once university licensing folks find ways to cheat on faculty inventors, and to cheat on policy requirements, and to cheat on Bayh-Dole–and they can get away with it–then we can expect that they will, indeed, cheat. And they do, and they don’t care because their rationalizations of policy and contract and law are good enough. Besides, they have a nearly unlimited legal budget to beat down anyone who might argue with them.

We might then expect to find that the arguments for cheating in Bayh-Dole are exactly those of Glaucon–that the Bayh-Dole expert cheaters believe that injustice is far more profitable than justice, that Bayh-Dole, applied unjustly, is all the more successful, and therefore worthy not only of public praise (and by extension, praise of administrators) but also of public preservation. The argument to protect Bayh-Dole is an argument to preserve unjust administrators and their practices.  Continue reading →

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When experts cheat at Bayh-Dole

Posted on July 11, 2018 by Gerald Barnett

In the classic guide to cheating at cards, The Expert at the Card Table, the point gets made that an expert cheater can cheat regardless of the watchfulness of anyone who expects him or her to cheat. An expert cheat can get away with cheating, even with with expert watchfulness.

Perfection in performing the “blind” shuffle, whether the old-fashioned hand shuffle or the “riffle” supplemented by a thorough knowledge of “blind” cutting, makes it impossible for the smartest card handler living to determine whether the procedure is true or “blind.”

The only remedy against playing against “experts” is this:

There is one way by which absolute protection against unknown advantages may be assured, that is by never playing for money.

In Bayh-Dole, we encounter the “expert at the table” in the form of patent brokers who have turned a right to keep inventions made with federal support if they find a legitimate way to acquire those inventions into a wildly broad claim on faculty inventions–and using a misrepresentation of Bayh-Dole as the excuse to make the claim. It’s just that the misrepresentation is done so slickly that only someone who knows Bayh-Dole through and through can detect it. Consider:

 As a result of this law, universities retain ownership to inventions made under federally funded research.

See? How about this:

In 1980, Congress enacted the Bayh-Dole Act, permitting the University to own inventions and patents made on federal grants.

Or this:

The University is entitled to retain ownership of any inventions created as a result of federal funding…

Do you see the sleight of hand? These statements all make it appear that “retain” means “take ownership of” or that somehow Bayh-Dole gives universities the first right of ownership. None of that is true. Continue reading →

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Perhaps Riding on Hiccups

Posted on July 10, 2018 by Gerald Barnett

People ask, “So if Bayh-Dole isn’t the best possible solution for federally supported inventions, what is?” There are variations–“How can we improve technology transfer under Bayh-Dole?” Or, more of an assertion–“There’s no point in criticizing Bayh-Dole if you don’t have something better to offer.”

This way of thinking is already loaded toward preserving whatever it is that one is doing. One might say it is in its way “anti-innovation.” There’s a particular irony in that, of course–the folks who are most ready to talk about innovation turn out to be the ones most against innovation when it comes to their pet monster Bayh-Dole.

To hold onto this anti-innovation view of Bayh-Dole, one has to accept that Bayh-Dole is even remotely workable. A succession of reports in the 1960s and 1970s argued that a single federal policy governing ownership of inventions made in all federal research contracting was untenable. Even companies and whole industries had widely varying roles for patents, from critical to indifference to worthless. Federal agencies had widely varying objectives and worked with widely varying situations and with widely varying research collaborators–companies with products, companies that did only contract research, nonprofits, university faculty, foundations set up as fronts for universities to administrate grants to university faculty, state governments, universities running federal labs. But instead, for some gawd-awful reason, Congress was induced to produce a law that forced federal agencies to adopt an arbitrary starting point for the disposition of ownership of inventions in all research contracting, regardless of the agencies’ objectives and the circumstances of any given research contract.  Continue reading →

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Bayh-Dole, without the useless fluffery of public protections

Posted on July 9, 2018 by Gerald Barnett

The public protection apparatus in Bayh-Dole appears to be there just for show, to “reassure” the public that everything will be fine with contractors owning inventions made in projects receiving public money and the government granting exclusive licenses to its company favorites. The public protections are drafted to be weak, to be unusable, to be waived, to be ignored, to be breached without penalty, with no enforcement mechanism, and the government does not act on its license and doesn’t march-in.

The paperwork parts of Bayh-Dole do nothing to advance innovation and are just more disincentive for federal contractors to use the patent system. Contractors have to have ownership of inventions as if they paid for the work themselves. The public benefit is entirely in any commercial products that they develop based on federally supported inventions.

That’s it, that’s faux Bayh-Dole, Bayh-Dole as a please do WTF you want law, Bayh-Dole as a patent pipeline from public research to private speculators on the future value of federally supported inventions–or anything else that contractor or federal administrators want to do.

Fuss all you like about the tragedy of the public domain, and the high cost of developing new products, and the apparent inability of federal agencies to find incentives in the patent system to act in the public interest. Rationalize and spin all you want. What is left to Bayh-Dole when you are done?

Let’s see. Here it is:

Bayh-Dole as it is practiced

35 USC 200 Policy and objective

It is the policy and objective of the Congress to minimize the costs of administering policies in this area.

35 USC 202 Disposition of rights

Each contractor may retain title to any subject invention.

35 USC 209 Licensing federally owned inventions 

A Federal agency may grant an exclusive or partially exclusive license on a federally owned invention. Any licenses granted shall contain such terms and conditions as the granting agency considers appropriate. Continue reading →

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The dogs in the manger, 2

Posted on July 6, 2018 by Gerald Barnett

We are working through some testimony from 1979 by a federal patent attorney, R. Tenney Johnson, before a Senate subcommittee considering a federal government invention policy bill that was a rival to Bayh-Dole (and strikingly similar, and didn’t pass).

Johnson presents a “personal feeling” about patents, perhaps based on being a federal patent attorney:

Again, taken carefully, who could argue–Johnson does not say that patents work best in private hands, but rather “patent incentives” work best. Well, of course. That’s because the federal government has no need of the “incentive” of monopoly control in order to publish an invention for all to use–especially an invention directed at matters of, say, public health. And then the crushing blow to Johnson’s argument: most federally supported inventions aren’t worth the bother of the paperwork to take title. Staggering. If the inventions aren’t worth the bother of the paperwork, then why would any private hands bother with filing patent applications? The primary motivations would be for mischief–to speculate on the value of withholding inventions from use (patent trolling) or to pile up the appearance of intangible assets to plump a sale of the company (so someone else might “monetize” the patents via trolling) and to disrupt competitors who might otherwise use the inventions and instead must design around. Continue reading →

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The dogs in the manger, 1

Posted on July 5, 2018 by Gerald Barnett

In 1979, R. Tenney Johnson, a career federal attorney, testified before the Senate Subcommittee on Science, Technology, and Space on Senate bill S. 1215, the “Science and Technology Research Development Utilization Policy Act.” This was the bill that was competing with Bayh-Dole to become the primary government-wide regulation regarding federally supported inventions. Bayh-Dole had failed to pass, and now it was Sen. Harrison Schmitt’s turn to try to push through an even more comprehensive bill. The bill would fail, despite having numerous co-sponsors. Bayh-Dole would then succeed by being tagged onto a lame-duck House bill making technical changes in patent law procedures–largely as Sen. Long’s parting gift to Sen. Bayh, who had failed to be re-elected.

Johnson’s testimony is instructive because Johnson helped to draft the Kennedy patent policy. His perspective then helps us understand the attitudes and reasoning behind the bills put forward by Schmitt and by Bayh and Dole. Johnson provides some history for the debates about what to do with patent rights for inventions made under federal contracts.

The great debate at the time was between the “title” argument–the government has paid for the work, it should get title to inventions, and the inventions should be made available to the public–and the “license” argument–the government should have a free license to use what it has paid for but otherwise contractors should be able to patent inventions and do what they want with those inventions, short of being a “dog in the manger” and not doing anything with them. Neither of this arguments is particularly apt and neither has much feck–especially if the idea is that all government contracting must be controlled by one or the other of these arguments. Continue reading →

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