Undermining Bayh-Dole by relying on it? 5

Posted on March 14, 2022 by Gerald Barnett

Now for Reimers’s new op/ed, making more arguments against march-in, but now directed at Xtandi, a prostate cancer drug based on a series of compounds developed at UCLA with federal funding. According to Knowledge Ecology International, Xtandi is offered for sale in the U.S. at a price of around $150,000 for a year’s worth of pills, more than double the price for which Xtandi is offered in other developed countries. Two generic versions of the drug already have FDA approval but cannot be sold in the U.S. because of UCLA’s patents and its exclusive license deal. The generic drug companies say they can make a profit selling their version of the drug for $5,000 for a year of pills.

In 2018, I wrote a series of articles about Xtandi and Bayh-Dole. The first one is here. The short of it is, UCLA violated Bayh-Dole in a number of ways to do its deal, and the outrageous pricing is one consequence. It’s not just that the federal government should march-in to address the pricing issue, or even that the government should use its license to make, use, and sell under Bayh-Dole and skip march-in for now–it’s that the government should enforce the other parts of Bayh-Dole that in their breach created the anti-competitive situation in the first place.

Reimers does not address this core point–that US prostate cancer patients get charged way more than patients in any other country, and a whopping 30x more than the price would be if there were competition to provide the drug. One might be left with the impression that if these weren’t “unreasonable terms” for U.S. cancer patients, then it is difficult to imagine any terms that would be “unreasonable.” If that were the case, then one also would have to accept that Congress in using “unreasonable terms” did not intend for there to ever be any unreasonable terms and so unreasonable terms must not mean anything, really, at all. That’s not a good starting point for statutory construction, but it is helpful to make the connection–arguments about Bayh-Dole carry with them implicit claims with regard to what Congress intended in passing Bayh-Dole. Not what Norman Latker or Senators Bayh and Dole privately thought they were doing, not even what Niels Reimers, who lobbied for the law, thought he was doing. What did Congress intend? What would one think is the plain and ordinary language of the law? Stuff like that. Work with it. Rule of law and all that. Continue reading →

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Undermining Bayh-Dole by relying on it? 4

Posted on March 13, 2022 by Gerald Barnett

Niels Reimers, having moved through a series of fallacies and fantasies about Bayh-Dole in his op/ed published in the Mercury News last April, turns to his worry of the day–state attorney generals want the government to march-in and open up access to covid treatments. “This would be an enormous mistake.” Maybe, truly, it would have been an enormous mistake–given how terrible the mRNA “vaccines” have turned out to be–don’t stop infection, don’t stop transmission, and have huge, even life-threatening side effects and unknown long-term issues. Oh, please. Just look at the data.

But Reimers goes on:

The march-in provision allows the government limited authority to license additional developers, but only if current licensees are failing to commercialize a patent.

Reimers is wrong. At least he’s consistent! March-in allows a federal agency to compel the patent holder (contractor, assignee) to grant licenses if the patent holder (i)  has not timely achieved practical application; or (ii) and (iii) has failed to reasonably satisfy a public health or regulatory need; or (iv) has failed to require US manufacture in cases of exclusive licenses in the US to use or to sell product based on a Bayh-Dole invention. Continue reading →

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Undermining Bayh-Dole by relying on it? 3

Posted on March 12, 2022 by Gerald Barnett

We are working through Niels Reimers’s op/ed in the Mercury News, published last April (2021) and now being used by the Bayh-Dole Coalition, a lobbying organization backed by a number of universities and front groups, to try to prevent Bayh-Dole’s public protections from being used to, well, to protect the public from universities and their exclusive licensees exploiting public health for unreasonable profits–essentially, using patents to price-gouge, undersupply the market, and suppress competition.

Reimers claims that if Bayh-Dole is used to protect the public from such practices, then universities won’t be able to do more deals that exploit public health using patents on inventions made in federally supported research, and all hell will ensue, with science itself shuddering to a halt and with it investment in new medicines. There just won’t be any, according to Reimers, unless the public allows itself to be exploited.

This, apparently, is the genius of Bayh-Dole. Congress, so the argument implies, realized that the best way to get new medicines to the public was to create incentives for universities and companies to use patents to suppress competition, create monopoly pricing, and screw the heck out of the public any which way they could. Congress included in Bayh-Dole various policies and requirements that appear to promote competition and reasonable terms, among other things, but these were clearly only intended to be ceremonial gestures and Congress didn’t intend for these to be ever used, as doing so would limit the opportunities for universities to work exclusively with the companies most ready to screw over the public. Follow? Continue reading →

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Undermining Bayh-Dole by relying on it? 2

Posted on March 11, 2022 by Gerald Barnett

We are working through an op/ed published in April 2021 by Niels Reimers, one of the recognized university TLO leaders from the 1970s on. We are working through it now because the Bayh-Dole Coalition is using quotes from it to try to influence federal policy makers to avoid using the public protections built into Bayh-Dole–and because Reimers just published a second op/ed, and we may as well take on both of them at once.

In his first op/ed Reimers has just made the claim that public-private collaboration (apparently imbedded in Bayh-Dole practice) has “spawned thousands of startups.” And I’ve pointed out that Reimers hasn’t made the connection between those startups and Bayh-Dole. He just switched metrics in the middle of his discussion, as if no one would notice, or everyone would assume that because there were startups after Bayh-Dole, they must have been caused, or “helped” or something by Bayh-Dole, and would not have happened, at any rate, without Bayh-Dole.

When a company takes a license to an “early-stage” university invention, development is exactly what the company will have to do, either on its own (exclusive license) or with others (non-exclusive license, shared platform, common standards, pre-competitive collaboration). Bayh-Dole then points to “maximum” participation in development. Bayh-Dole stipulates, then, non-exclusive licensing that favors small companies–a maximum number of small companies. Exclusive licensing to one startup runs against Bayh-Dole, as it excludes all the other small companies that otherwise would have an opportunity to participate in development. Same for “free competition and enterprise.” Free competition doesn’t happen, with regard to any new invention, because the rights get licensed exclusively to just one company. The competition that necessarily comes about, then, is between the single licensee and the rest of the industry, which has to design around or undermine or ignore. Continue reading →

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Undermining Bayh-Dole by relying on it? 1

Posted on March 10, 2022 by Gerald Barnett

I feel like Charlie Chaplin in a pie factory. Before I could work through an op/ed by Niels Reimers in the Mercury News last April (2021) that the Bayh-Dole Coalition has dredged up to contest the use of march-in to address unreasonable terms–apparently terms are never unreasonable–Niels Reimers has gone and published another op/ed, also in the Mercury News. Reimers reuses some of the same copy in the second as the first, but changes the worry from march-in for covid vaccines to march-in for the prostate cancer drug Xtandi.

Niels Reimers started the Stanford TLO in 1970, back when it was one of a very few university-based patent management offices. Since then, Reimers has been one of the big influencers of university IP practice, having worked with both the University of California and MIT to refashion their approach to be similar to that of Stanford’s TLO. It’s tough to take on an old pro in university technology transfer, one who has shaped much of university TLO practice (for good or ill). But when old pros go political and swap getting things done that serve the public for trying to prevent the public from getting the benefit of its statutory bargain, then it’s time to respond.

Gosh, this is going to be long–a series of articles–but there’s some really good stuff to point out, when Reimers grossly distorts Bayh-Dole, which fortunately for us, he does often. There’s a short form if you want to save time and skip the really good stuff.

Reimers is wrong.
Reimers grossly distorts Bayh-Dole.
March-in addresses price by introducing free competition.
March-in is third among Bayh-Dole remedies for price-gouging and price discrimination.
Private investment won’t catastrophically drop if the public gets reasonable terms.
Bayh-Dole, even enforced, has defects so bad no regulatory twiddling will save it.

Let’s work through both op/eds to see what Reimers has to say. By using Bayh-Dole, Reimers claims, the government will undermine Bayh-Dole. Pretty twisted stuff to come.

Continue reading →

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Drexel’s Bogus Description of Bayh-Dole, 3

Posted on February 21, 2022 by Gerald Barnett

We are nearly done working through Drexel’s bogus badness about Bayh-Dole. We are considering commercialization. Drexel says Bayh-Dole requires Drexel to commercialize inventions. And Bayh-Dole doesn’t say that. Someone’s gotta be wrong. Oh, hey! I think it’s Drexel!

The basic points are these: Bayh-Dole mandates a working requirement but does not mandate commercialization. Whoever owns a subject invention has to use the patent system to promote utilization of the invention and not to suppress utilization. Utilization could be promoted by contributing the invention to a standard, or by widespread non-exclusive licensing so everyone can make their own. Think about that for a bit–it can be done: any enforcement of patent rights in a subject invention has to show that the suppression of use promotes use. For instance, when Stanford sued reluctant licensee Roche for infringement, Stanford was not using the invention and Roche was. If the invention had been made under Bayh-Dole (it wasn’t, but Stanford claimed it was), then Stanford should have been prevented from suing Roche anyway–it was not within Stanford’s patent property rights to sue Roche for using the invention Stanford claimed to own–that suit would suppress, not promote, use. Yes, think about it. What is the public policy at work here?–a policy that Congress would intend–or what Sen. Bayh, or Norman Latker, or Drexel would intend? Continue reading →

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Drexel’s Bogus Description of Bayh-Dole, 2

Posted on February 20, 2022 by Gerald Barnett

We are working through Drexel’s bogus badness about Bayh-Dole, hoping in the process to learn something not bogus about Bayh-Dole–and to see just how sloppy, loose, and confused Drexel folks are about Bayh-Dole, and by extension about technology transfer.

Drexel’s account of Bayh-Dole turns from general banalities to present “Key Provisions” of Bayh-Dole. We will work through these. Yes, we have to.

The University is entitled to retain ownership of any inventions created as a result of federal funding, unless the funding agency informs the University up front that the agency will retain title to inventions derived from the funded projects because of specifically identified “exceptional circumstances” or other specified conditions.

“Retain ownership of any inventions.” Not true. Bayh-Dole’s provisions on keeping ownership apply only after a contractor has obtained ownership. “Retain” here is used in the sense of “take,” but the Supreme Court expressly rejected this usage of “retain.” The university gains no special privilege from Bayh-Dole to take ownership of any invention. “Entitled” here is entirely misleading. Furthermore, Bayh-Dole’s provision to allow contractors to retain title to inventions that they have gone out and acquired is conditional, and it is the conditions that ought to follow the main clause–compliant disclosure to the government and proper patenting practices. What follows instead in the Drexel statement is another problematic statement. The reference is to Bayh-Dole’s provision for a determination of “exceptional circumstances” (35 USC 202(a)) under which a federal agency may use an alternative patent rights clause, which may then involve–but need not–a claim by the federal agency to own any inventions made under a given funding agreement. However, federal agencies do not “retain title” in such situations because they never have title until they have received assignment of the invention from whomever holds title–the inventor, the contractor (by assignment), or some other (also by assignment). Continue reading →

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Drexel’s Bogus Description of Bayh-Dole, 1

Posted on February 19, 2022 by Gerald Barnett

Drexel University’s Office of Research and Innovation has a discussion of the Bayh-Dole Act posted at their web site. They get almost everything wrong about Bayh-Dole–but one thing perfectly right! Let’s work through their bogus badness, and in the process learn something about Bayh-Dole.

Here’s the opening:

The Bayh-Dole Act, formerly known as the Patent and Trademark Act Amendments, is a federal law enacted in 1980 that enables universities, nonprofit research institutions and small businesses to own, patent and commercialize inventions developed under federally funded research programs within their organizations.

I’ve highlighted some words. I do think the word they were looking for was “formally” not “formerly.” The statute’s formal name has not changed. The law was enacted in 1980 and became effective July 1, 1981. So far, so good. The law, however, did not “enable” federal contractors to own inventions. Instead, Bayh-Dole directs federal agencies to use a default patent rights clause (unless they have a reason not to) that limits ownership claims that federal agencies may make on inventions made in federally supported work that a federal contractor–such as a university–has acquired. Nothing in Bayh-Dole “enables” a university to own anything. Bluntly, Bayh-Dole “enables” a university that has got ownership to conditionally keep that ownership. Yes, there’s nuance there, but it is a huge nuance. And it wouldn’t be a nuance if Drexel and other universities didn’t chronically misrepresent the law in the first place. We will come back around to this idea of “enables.” It’s not that in some roundabout way, “enables” gets at an aspect of Bayh-Dole; rather, it’s that “enables” misrepresents what the law does. Drexel makes it appear that federal law gives it a special right to take ownership of inventions made in federally funded work, and that’s not true. Continue reading →

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Five Steps to Restoring an Effective University IP Practice, Step 5

Posted on February 14, 2022 by Gerald Barnett

We have been working through five steps to restore a university’s IP practice to something that. might be modestly effective. Abandon AUTM, which has worked for decades against effective IP policy and practices. Abandon compulsory university ownership claims. You may have no idea how damaging those claims are to university IP management, but you should. Let go. Things will be good. If you are afraid of not making money, don’t be. You probably aren’t making money now, if you take into account all the subsidies that you have propped up your licensing operation with.

And if you are worried that not taking ownership somehow violates Bayh-Dole, oh gawd I warned you about AUTM already so don’t go back there. Bayh-Dole does not require you to take ownership of anything. Once university IP management is voluntary, then it’s easy to make the university default non-exclusive access. If university inventors want to deal in exclusivity, let them. If you want to comply with Bayh-Dole’s authorized standard patent rights clause, make potential inventors party to the federal funding agreements that support their work. Then they–the inventors–become (per Bayh-Dole 35 USC 201(c)) contractors and it is up to them to report their inventions to the government, decide about keeping title, and whatnot. You don’t need to do that for them. With freedom comes responsibility. A good lesson. Continue reading →

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Five Steps to Restoring an Effective University IP Practice, Step 4

Posted on February 12, 2022 by Gerald Barnett

We are working through five steps to getting a university back to an effective IP practice, a practice aligned with academic values and focused on actual technology transfer. The idea of “technology transfer” is bureaucratic in origin. As a concept directed at research, “technology transfer” arose as federal officials in the mid-1960s  tried to figure out how to make federal research appear relevant to the general public. “How do we get industry to adopt what our researchers have discovered, and by doing so make our research appear relevant, so we get more money for research?” Here’s an n-gram for “technology transfer”:

Nothing until about 1965, and then “technology transfer” is all the rage, peaking around 1990. While there’s all sorts of things we might say about the “diffusion” of technology or the adoption of anything new by companies, the idea of “technology transfer” carries with it a sort of psyops effort to persuade companies–thought of as rather brutish, backward-thinking things–to adopt the bright shiny new discoveries of federal research spending. Continue reading →

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