Research Enterprise

We are looking in on a student blog post at the Rice University McNair Center for Entrepreneurship and Innovation. The article is useful for reciting in the wild a number of arguments that claim Bayh-Dole has had a positive impact. I have lived, professionally, with these claims for decades, so they aren’t new to me, nor do I have much reason to believe any of them. But I have met people who truly have wrapped their careers around these claims, almost as if they represented a prophecy about Bayh-Dole. When claims rise to the level of prophecy, of course, no amount of disconfirming fact or reasoning will cause someone to alter their position–instead, they are likely to double down on it and become all the more evangelistic.

Here’s another sentence for discussion:

Before 1980, only 5% of government-owned patents were ever utilized in industry.

This is a nonsense factoid that’s been repeated without context or even backing data since before Bayh-Dole became law. Rebecca Eisenberg ripped it apart decades ago, but like a zombie, it continues to half-live, though lacking any reason to live, except to devour the brains of the unsuspecting. Continue reading →

We are working through a student account of Bayh-Dole posted at a Rice University entrepreneurship center. The post is helpful in repeating commonly accepted claims about Bayh-Dole. Our interest is not so much in arguing the limitations of the post as using it as a springboard to look more closely at the claims made for Bayh-Dole, and thus, also, to look more closely at Bayh-Dole itself. Here’s another claim made by our student author, Catherine Kirby:

The Bayh-Dole Act was intended to improve the commercialization of federally funded research.

No doubt there were some who intended just this. But commercialization is not an obvious stated policy or objective of Bayh-Dole. We might say, “The Bayh-Dole Act was intended by university licensing officers and patent brokers to improve the commercialization of federally funded research.” In the Act itself (35 USC 200), all we get is “use the patent system to promote the utilization of inventions arising from federally funded research or development.” Utilization is practical application, which is defined by Bayh-Dole to mean established use with benefits available to the public on reasonable terms. Ah, but there’s also this objective buried in the list:

to promote the commercialization and public availability of inventions made in the United States by United States industry and labor

Read it slowly. It doesn’t say “improve the commercialization” of inventions–but to promote “commercialization and public availability.” There are two objectives, stated in parallel and given equal weight by that happy little coordinating conjunction and. Continue reading →

We are working through the opening paragraph of a student’s account of the Bayh-Dole Act. The account creates the opportunity for a discussion about the impact of Bayh-Dole and the strange spin that has become widely accepted about what Bayh-Dole has done. At times I find myself reading about Bayh-Dole as if it is some sort of whispering god of innovation and wealth rather than an odd law that makes a show about what federal agencies must include by way of patent rights in funding agreements but then don’t have to enforce.

Now consider our next sentence:

However, the act did help universities license patents, creating positive economic benefits especially in the biotechnology industry.

There’s much packed in here. It’s the standard story. How on earth did Bayh-Dole help universities license patents? Bayh-Dole places the greatest restrictions on nonprofit patent management. It’s difficult enough to license patents, especially exclusively–Bayh-Dole requires one to license patents with a fly on your forehead. Gack. How many times does a university licensing officer have to deal with questions about what “substantially manufactured in the U.S.” means, or what information might be demanded for federal reporting, or what the effect of march-in might be, or that non-exclusive license to the United States to “practice and have practiced”? Might such things somehow help the proposed transfer of a patent monopoly from a university to a company? Bayh-Dole is a total crap (a term of art, here) when it comes to “helping” license anything. There are no incentives for companies to license a posi–a patent on a subject invention. I have never, ever heard a company representative go, “Oh, good! It’s a federally funded invention–this is great news, as these licenses are always better than ordinary licenses.” I’m willing to bet nothing of the sort has ever been emitted from the negotiation-hole of any company officer, other than as sarcasm, perhaps aided by over- much alcohol.

If Kirby’s point is rather that “help” means “help themselves”–the act did help universities help themselves to patents to license–then there may be some true impact there. Continue reading →

Here’s a passage from Thomas Kasëberg’s Intellectual Property, Antitrust and Cumulative Innovation in the EU and the US:

In this passage Kasëberg lays out the standard argument that there is no working requirement in US patent law. As the Supreme Court has put it, “A patent owner “is not in the position of a quasi-trustee for the public…. He has no obligation either to use it or to grant its use to others.”

Now consider the effect of Bayh-Dole, its standard patent rights clause, and the grant requirements for intangible assets in federal subvention funding provided to universities to support faculty research. Here’s Bayh-Dole (35 USC 200): Continue reading →