Ten Years After 25 Years After Bayh-Dole, Part 4

Posted on January 11, 2017 by Gerald Barnett

We have looked at an article by Boettiger and Bennett reviewing the Bayh-Dole Act after 25 years. We have picked over the description of the law and pointed out how our authors mischaracterize the law to their own disadvantage. Bayh-Dole doesn’t “shift the incentive structure”–it suppresses an approach without an “incentive structure” and lets an approach with an incentive structure to dominate. Bayh-Dole also doesn’t require a change in university policies–it implements a federal policy through a standard patent rights clause that supersedes any university policy or agreement on the same subject matter. Bayh-Dole doesn’t require patenting (a university must choose to patent), doesn’t require anyone to “encourage development” (a university must promote use). This stuff isn’t subtle unless one doesn’t know the law or has been conditioned to university-speak for years.

Having characterized Bayh-Dole, our authors make an insightful observation:

Many of the issues that are identified today as negative consequences of Bayh-Dole can be traced to the institutional policies structured to optimize institutional benefits and income, rather than to the Act itself.

There is something to this statement, but again, the cognitive dissonance is intense. Continue reading →

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Ten Years After 25 Years After Bayh-Dole, Part 3

Posted on January 10, 2017 by Gerald Barnett

Boettiger and Bennett look at Bayh-Dole after 25 years and discuss how things ought to change. To set up their discussion, they first characterize Bayh-Dole as having “shifted the incentive structure” for patents. Parts 1 and 2 of this series discuss how Bayh-Dole didn’t so much shift a structure but rather allowed patent brokers to take more federally supported research into an existing structure–and then change that structure to favor institutional profit-seeking from exclusive patent licensing (and ascribe the change to Bayh-Dole).

Imagine a federal law that requires all locks to be removed from homes. That law does not endorse robbery, but what do you think will happen? Bayh-Dole removes the authority of federal agencies to impose restrictions that limited private patent monopolies from interfering with the dissemination of discoveries and inventions made to advance scientific knowledge or the public welfare. Bayh-Dole did not shift the federal agency incentive structure. It allowed incentives that had nothing to do with the federal purposes of the funding in the first place. Bayh-Dole made the implied purpose of all funding–Bayh-Dole is arbitrary–to promote the creation of private patent monopolies. However those monopolies operate is necessarily, by decree, to be in the public interest. Yes, there were vestigial “march-in procedures” included with Bayh-Dole, but they were designed not to work–and in the implementation phase, university patent brokers made sure they would not work, and bragged about it afterward.

Boettiger and Bennett describe the basics of Bayh-Dole:

The Act also requires the institution to establish patent policies for its employees, to actively seek patent protection and to encourage the development of their inventions.

These descriptions are wrong, each in its own way.  Continue reading →

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Ten Years After 25 Years After Bayh-Dole, Part 2

Posted on January 9, 2017 by Gerald Barnett

We are working through an article by Boettiger and Bennett that looks back on Bayh-Dole and wishes things were different in some ways. The actual thrust of the article, though, is about university patent practice. To get there, however, we have to work through their reasoning, history, and context. Vannevar Bush in Science the Endless Frontier argued that the government had an important role to play in supporting two research objectives–to advance the frontiers of science and to conduct research to advance the public welfare by drawing on science, including frontier science. Somehow, it seems, few really want to understand what Bush was getting at–research is research, so patent the results and get someone with money to buy up the patent, repeat. But that is not what Bush was getting at. Let’s consider where patents fit in research to advance the public welfare. The abstraction “public welfare” is part of the problem, because it contains within it all sorts of strange arguments about how greed and self-interest will eventually lead to the best of all possible worlds. And then we are dealing with another abstraction regarding possible worlds. Sigh. It doesn’t much end. Abstractions all the way down. Anyway, let’s look at speculative monopolies and public welfare research, since this is what Boettiger and Bennett are concerned with.

Speculative Monopolies and Public Welfare Research

Why did HEW end the Institutional Patent Agreement program? Two reasons stand out. First, under the IPA program, universities did no better than the federal government in making inventions available. Their “commercialization rate” was about 5%, not the 25% to 33% that universities had claimed for non-federal inventions. Second, private monopoly positions on compounds discovered to advance the practice of medicine weren’t consistent with the federal policy-makers’ idea of research to advance public welfare. Continue reading →

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Ten Years After 25 Years After Bayh-Dole, Part 1

Posted on January 8, 2017 by Gerald Barnett

Ten years ago Sara Boettiger and Alan Bennett, a couple of University of California licensing officers, published an article on Bayh-Dole in Nature Biotechnology, “Bayh-Dole: if we knew then what we know now.” Boettiger and Bennett paint a picture of the Bayh-Dole Act and university patent licensing practice, and then argue that there needs to be exceptions to that practice to support research and humanitarian interests. Their article makes for a complicated discussion, not because their writing is complicated–or even their points–but because they base their arguments on a faux version of Bayh-Dole–the standard faux version of the law–and then argue against this version without quite coming out and holding the law responsible for the patent practices at universities that the authors object to.

Here’s the question Boettiger and Bennett ask:

If we were to write similar legislation today, what issues would be addressed differently, given our experience with the Bayh-Dole Act over the past quarter century?

The answer cries out–nearly every issue would be addressed differently, from the conduct of science and public welfare research to institutional involvement in patenting to federal agency discretion in the requirements on inventions made with federal support to the use of the patent system itself. But our authors accept that Bayh-Dole is somehow “successful”–their burden is to try to carve out from that success a safe haven for the crumbs of success, to offer to the research community and to the poor.

In some way, Boettiger and Bennett’s article is not about Bayh-Dole, but about the university response to Bayh-Dole. Let’s work through the article. There some things not to like, and some excellent points that have waited ten years to be requited and will wait a lot longer if nothing is done with Bayh-Dole or with university patent practice. Continue reading →

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Ten Years After 25 Years After Bayh-Dole: Summary

Posted on January 7, 2017 by Gerald Barnett

For the next few days, Research Enterprise will run “Ten Years After 25 Years After Bayh-Dole,” a series of eight posts working through an article about Bayh-Dole from 2006 by Sara Boettiger and Alan Bennett. The authors argue for some changes in university practice under Bayh-Dole–especially with regard to supporting research and access to new technology in low-income regions. I use their article as a springboard to discuss descriptions of the Bayh-Dole Act and the problems of introducing changes in practice by accepting the proposition that the Bayh-Dole Act has been a success.

If you like to discuss, read the series. If you want the quick summary, here it is:

Bayh-Dole has been represented as a success, but there’s little support for the claim and a lot of evidence for Bayh-Dole’s failure. Bayh-Dole has never been fully implemented, university administrators routinely ignore the law and refuse to implement key provisions of the standard patent rights clause, and university administrators and others routinely misrepresent the law. Bayh-Dole metrics are made federal secrets, and AUTM metrics fail to break out subject inventions or report practical application. Bayh-Dole has failed. That’s the starting point for any discussion of what to do differently. Continue reading →

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After another parade

Posted on January 6, 2017 by Gerald Barnett

Back in 2010, Roop Singh and Sonali Tare published an article in the Journal of Emerging Knowledge on Emerging Markets, “India’s Emerging Technology Commercialization Policy: Lessons from the American Model.” It is not at all clear that the authors are clear on even the faux version of Bayh-Dole. Well into the article, we get a standard version of the faux Bayh-Dole Act that recites the now-standard claims about federal agencies and the 28,000 patents. No one today talks about the 30,000+ patents in even worse condition held by American universities–worse because unlike the federal patents, which were generally available to all, the university patents are not generally available, held for exclusive licensing deals that mostly never happen.

Here’s the “nuts and bolts” of the authors’ Bayh-Dole paragraph:

The Act brought about a cohesive set of rules, granting ‘contractors’ – be they universities or other non-profits or small businesses – the prerogative to hold the title to the patents.

Mind you, this is from 2010–before the Supreme Court ruled on Stanford v Roche. So we might cut them some slack. But the “prerogative” in Bayh-Dole has to do with resolving disagreements between federal agencies and contractors–nothing in Bayh-Dole disturbs the common law rights inventors hold in their inventions, and nothing in Bayh-Dole requires inventors to assign to their employers. So Bayh-Dole did not address the fundamental step–what an inventor is free to do, having invented. Our authors don’t appear to comprehend this step and fixate instead on the idea that Bayh-Dole mandated institutional ownership of inventions and that somehow this was and is a really good thing–“cohesive” and all. It’s this second bit–that it’s really good to prevent inventors from owning their inventions and hand that ownership to bureaucratic management–that bothers. Even if a law did require such a thing, why would people embrace it?  Continue reading →

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University technology transfer as an import function

Posted on January 5, 2017 by Gerald Barnett

Here is Carlo Marco Belfanti, on “Guilds, Patents, and the Circulation of Technical Knowledge“:

In 1554 the Republic of Lucca established a special office, the Offizio sopra le Nuove Arti, to undertake the task of “examining the ways of introducing new ‘arts’ to the city, by searching for and finding men who were able and expert in these.”

Here’s an excerpt from the Organic Act, 1868, which establishes the University of California, describing the duties of the Secretary of the Board of Regents, a parallel position to that of university President: Continue reading →

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After the parade

Posted on January 4, 2017 by Gerald Barnett

Sometimes I feel like my job is to come along after the parade and sweep up all the horse-manure left by AUTM folks. Crowds are gone, balloons all popped, marching bands safe back in their hotel rooms. University inventions locked up for more years behind patent broker paywalls, in, uh, “portfolios.” You know, like stock portfolios, except where 90% of the “portfolio” loses money but the broker makes money on the size of the portfolio not on its overall performance, so doesn’t tell you about all the losses.

Anway, I just came across a brief objection by Ashley Stevens from 2011, upbraiding Bhaven Sampat over Bayh-Dole and arguing that UK’s approach to university patenting follows a similar course of success. Stevens creates a happy history that never was for Bayh-Dole, and uses that history then to disagree publicly with Sampat. Let’s see if Stevens’s arguments hold up. I know, we are talking about stuff from six years ago–working through the horseshit after the parade. But sometimes doing so is, let’s say, fertile ground for learning something new.

Here’s Stevens on Bayh-Dole:

The act was passed as an agent of economic policy, not of social policy.

Do you comprehend the distinction? Continue reading →

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Bayh-Dole, a law designed to reduce invention use rates

Posted on January 3, 2017 by Gerald Barnett

Here’s a table from the Harbridge House report, c. 1968. I’ve marked on it to call attention to some figures. First, when a contractor has experience and owns an invention, the commercial harbann-userateuse rate is over 20%. Universities, however, as owners, fare worse–they are in the category at 6.6%. Under the IPA program from 1968 to 1978, universities were at 4.2%–4 out of 96 subject inventions.

This table reflects the Kennedy patent policy: if a contractor has a commercial position and capability, let the contractor hold title. Everyone else has to to make a pitch that they can do something, because the figures don’t indicate they generally don’t do so well. The Kennedy approach makes some sense, on the evidence.

Now here’s the thing. A university will aim to license patent rights to a company (almost always exclusively–though that’s just a choice university folks make). There are two choices. The university can license to a contractor with experience, or one without (such as a university startup). Let’s look at the Harbridge House numbers. If to a contractor with experience, the rate doubles–13.3%. But it’s still about half of what companies do if they also own. If to a contractor without experience, the rate drops by more than half.  Continue reading →

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Bench scientists should read Lysistrata

Posted on January 3, 2017 by Gerald Barnett

Sometimes there’s someone else who cleans up after the parade. Back in 2010 and 2013, Anthony Nicholls, President and CEO of OpenEye Scientific, published some articles about the problems of academic research, the failure of government to fund basic science, and the pernicious effects of the Bayh-Dole Act:

Let me be less circumspect: as far as science is concerned, there has NEVER been a worse Act of Congress in the history of the United States.

Bayh-Dole is a pretty wrong-headed law. It could be a decent law, had it been drafted by folks who weren’t focused on thwarting the federal government’s efforts to deal with the monopoly-minded pharmaceutical industry at a critical moment in the development of medicinal chemistry. It could be a half-decent law even now, if read carefully, enforced on its terms, and used with a clear eye toward advancing science and public welfare. It’s the last bit that’s the biggest problem. Continue reading →

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