Bayh-Dole under attack again

By now most of our TBED community has seen the Fortune article attacking the legacy of the Bayh-Dole act. We see such attacks from time to time, though not often as well written as this, and rarely from a business publication.

As one would expect, AUTM has its response and its talking points out. These replies do a pretty good job, not only in correcting a few factual errors, but also in articulating what the Fortune author never reallly gets around to admitting straight out: that Bayh-Dole paved the way to clear, unambiguous grants of exclusive rights to practice federally sponsored inventions precisely to encourage risk-taking of a kind that actually gets innovation into practice in the real world. Monopolies attract investment, as any microeconomist will tell you, and that is precisely the spirit in which patents were contemplated by the U.S. Constitution. A regretable but inevitable consequence of extending the patent privilege to institutions that didn’t pay for the inventions themselves is that they’ll be every bit as aggressive as any for-profit company whose own for-hire investigators were the inventors. The institutions’ behavior is jarring, but not unexpected, and if there has been failure to ease off on “research tools,” then I’d suggest that the NIH has probably not used wisely all the leverage it has, even under the Bayh Dole regime.

AUTM also credits university technology transfer offices with what we know to be true: that many are driven by revenue maximization but sincerely in the context of seeing inventions practiced. Indeed, the co-existence of profit motive with social motive is the part of the march-in rights concept that the author does not appear to fully understand.But there is one more question not explored by AUTM: licensing under Bayh-Dole provides universities a powerful way to contribute to the economic development of the communities in which they operate. It is true that not many T2 offices see economic development as a primary mission (yet), but that does not change the fact that Bayh Dole is a very powerful tool with important social benefits even if one doesn’t accept anything else.


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