Bayh-Dole: The Envy of the World Because it Works
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course Posted: June 8, 2014 @ 1:32 pm
To begin reading the interview from the beginning please see Exclusive Interview with AUTM President Jane Muir. Part 2 is available at Universities are NOT Patent Trolls. For more on the Bayh-Dole please see Does University Licensing Pay Off, Bayh-Dole Success Beyond Wildest Dreams, and Intellectual Dishonesty About Bayh-Dole Consequences.
Without further ado, here is the finale of my interview with Jane Muir.
MUIR: I find it so perplexing that when you look at the associations that are involved in technology transfer and the biotech and pharma industries. I’m talking about all your alphabet soup, your BIO, your APLU, your AAMC, your COUGAR, your AAU. All of these people who understand those nuances and those complexities that we talked about at the beginning of our conversation who are saying to the people who want to enact these changes, hey, don’t do it, here’s all the negative ramifications that are going to occur. It just befuddles me that that can be ignored when the goal again of these universities is the betterment of mankind and the creation of knowledge. There’s no personal vendetta, no personal agenda there. But yet it seems as if it’s being ignored by the people who are actually making the changes which would — I shouldn’t say this — which would indicate to me that maybe there’s some personal agendas on the other side that are going on that may not be for the greater good. I just really don’t understand it.
QUINN: Yeah, I know. It perplexes me as well and I don’t get it. we just went through this round of what I think is objectively the biggest change in patent law in the United States ever with the American Invents Act because it didn’t just codify the common law in the way that the 1952 act did, it changed big significant things. And we are not even three years into it and we just within the last, just over a year ago switched the First to File. And we really don’t know how that’s going to play out. So to be going back already and making changes I don’t know what driving it. But I see the changes as not being friendly to the patent owner. Which is very problematic to me.
MUIR: Agreed. Because you’re disincentivizing that person, right?
QUINN: Right. And any time you do that you’re going to get less activity than you otherwise would. And it strikes me that increasingly over the last few years the patent has ceased to be a real property right. Do you think that that’s—how do you see it?
MUIR: Well, I think as a patent attorney you probably can see that way more clearly than I can. I see it much more from a layperson’s point of view. That is the patent system has been so important to the U.S. economy. For years we have led the world in the number of patented innovations that have been generated in our country. Just several years ago we’re no longer leading that. If we continue down this path of making these reforms where I’m sure many people have good intentions, the unintended consequences could push us even further down in terms of where we rank with respect to new patents and innovation that’s being generated in our country.
QUINN: Yeah. And it really bothers me, too. And I don’t know how closely you’ve followed some—this is maybe real hardcore inside baseball stuff at the moment. But it’s not going to be for long. The patent trial and appeal board at the patent office just it seems every patent that they get their hands on from these new contested proceedings winds up having all the claims being declared unpatentable. And I just looked at a series of cases where Micron was victorious over the University of Illinois and when I first saw that I was like, you know, this was sold as being a way that the industry could address patent trolls and frivolous lawsuits. And now it seems that any patent is really at risk. Is that something that really worries you or worries AUTM?
MUIR: Oh, I’m sure. AUTM is an association of individual members so I can’t speak for every one of those members. But from my standpoint anything that diminishes the value of that patent diminishes the interest of investors and corporations from working with universities to move those patents out of the lab and into the market.
Our profession was created in 1980 with the Bayh-Dole Act. We are still a relatively young profession. I’ve been doing this for over two decades now. The changes that we’ve seen in the profession are astounding. When I first started, tech transfer was this entity off in this corner usually in a dumpy building on a university campus somewhere that just did its thing and nobody really understood what it did. In today’s world at most universities well some of us are still in dumpy offices, some of us aren’t. But we are much more an integral office and integral activity in so many aspects of what the university does. So for example, we might be collaborating with the Center for Entrepreneurship and Innovation on their business plan competition using real world technologies. Or the university president might invest $5 million to build an incubator so that we can get more of these startups to be better positioned to be successful in commercializing university research. I could go on and on about how the tech transfer function and the importance of getting those research discoveries out of the lab and into the market has really taken front and center. And so as a profession we are continuing to innovate how we move innovation, right? We certainly don’t have all the answers and you read about lots of new approaches out there that universities are trying and taking. Some of them work and some of them don’t. But it’s all good because I think the underlying message is, A, moving those discoveries out of the lab into the market is really, really important. B, we need to continue to figuring out new and improved ways to do that. We can’t just say it’s broken and it’s not working because the statistics prove out the fact that we have had a tremendous level of success in this country in technology transfer. There are approximately 40 countries around the world that have enacted their own version of the Bayh-Dole legislation because they have seen the numbers. They have seen the success that the United States has had in commercializing these discoveries. We truly are the envy of the rest of the world. In three or four months I’m going to be visiting about six different countries. What they want to hear about is how is the U.S. achieving this level of success. So oftentimes we look at our own backyard and don’t have a full appreciation of the beautiful flowers growing there but there are lots of beautiful flowers growing in our tech transfer profession in the United States.
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QUINN: Yes. It strikes me as odd that every year without fail there are the critics of Bayh-Dole that want to just seemingly throw out the baby with the bathwater and totally get rid of what has been created. And if you look at the numbers, the one that I like the most because this really affects real people and it addresses lifesaving issues, is prior to Bayh-Dole there were zero drugs commercialized out of university research. And since Bayh-Dole there’s been 153 and counting.
QUINN: All the billions, many hundreds of billions of dollars added to GDP every year. It’s overwhelming evidence that this has worked but yet we still have to fight the critics. And it strikes me as odd is like the rest of the world wants what we have and they’re increasingly creating their own version of Bayh-Dole and yet we talk about whether we should just throw it away.
MUIR: Yes. Isn’t that crazy?
QUINN: That just strikes me as so odd and it’s got to be driven by ideology rather than evidence.
MUIR: Well, I think it goes back again to nuances. You’ve got a lot of people who are using the numbers from the AUTM survey in a way that is just not logical. They’re using numbers as numerators and denominators that just should not be connected in that fashion. And the other thing that as I’m drilling down in the office of the president I’m recognizing is that we have in my opinion significantly under reported the numbers. Because while there are usually around 200 institutions that submit data as part of the AUTM survey, not all of those institutions answer all of those questions. So let’s say you have a question for example on how many startups you create. If there were 200 respondents and only 100 of them responded on how many startups they created it makes it look like those startups came from the 200 when in fact they only came from the 100.
MUIR: So the numbers that you’re talking about which are extremely impressive are also in my opinion significantly underrepresented.
QUINN: I don’t get what the driving force here— well, maybe I do get it but I just don’t really want to get it.
MUIR: Help me get it.
QUINN: I interviewed Senator Bayh a few years ago and I told him, you know, I could understand the people criticizing what you were wanting to do back before we had any evidence that what you wanted to do was going to work. What I can’t understand now is the same criticisms year after year after year in the face of what we have as this evidence. And I think the latest round of this is really being brought up by healthcare issues. And it seems to me that there are a lot of people that believe that if patents simply went away then drugs would be cheaper.
QUINN: And you laugh and I laugh. And it’s—
MUIR: Drugs wouldn’t be there.
QUINN: They wouldn’t be there. I just read an article the other day, I think it was from Forbes where a writer when he looked at what the major pharmaceutical companies spend to get a drug to market. And it’s between $4 billion and $11 billion. You know, and it’s outrageous. And he said look, there’s a lot of costs in there that people can say, yeah, well, that really shouldn’t have counted. That really shouldn’t be counted. But at the end of the day he concluded the same thing I conclude, whatever you want to get rid of in costs and you say, well, it shouldn’t cost this much because of this, whatever you’re left with is a massive amount. Billions, billions of dollars. And that’s just not going to happen if the minute something hits the market you can have a generic manufacturer pop up who spent no time, money, or energy inventing and make it.
MUIR: Absolutely right. And in fact I heard an interesting presentation by a major drug company whose name I will not mention. But they gave this talk about how they had five different cures for various diseases in their pipeline. And at the end of the day they had limited resources. So they had to figure out which one of those cures were going to actually make its way into the market. And that just reaffirms what you’re saying. You know, there’s a lot of good innovation out there. A lot of cures for diseases that could potentially change the world. But at the end of the day there’s got to be a financial incentive for somebody to be willing to do that.
QUINN: Otherwise it just doesn’t happen.
MUIR: It doesn’t happen.
QUINN: And I don’t understand for the life of me why people don’t understand that. You know, when I teach this stuff to students and you know sometimes the younger crowd is a little bit more idealistic and thinks the world is different yet. And I get that, I do understand that. But I said, let me just try and put this into some terms that anybody ought to be able to understand. I really like the paintings of Vincent Van Gogh. Now, if Van Gogh had to be flipping burgers or waiting tables to make money to buy food and pay rent then he wouldn’t have painted as much. Now who wins in that scenario? Right? So now we don’t have a patronage system like they used to for the arts years ago. We’ve got a capitalist system and with a capitalist system we let the market decide.
QUINN: You give them the rights if they’re good at what they’ve done we would like them to do more and they will be able to make a living doing that more. And it’s really that simple.
QUINN: So then we get back to what you brought up – maybe these folks have an agenda. And I think that there is an agenda there. And I just think that if we’re going to change the way we do things since what we’re doing and what we’ve done for so long has worked so well and is the envy of the world that there should be an extremely heavy burden on the people who want to change.
MUIR: I agree. And it doesn’t seem to be there, does it?
QUINN: No. Why do you suppose that is? I mean do you have any ideas?
MUIR: Well, I don’t have the answers. I’m not a politician. I’m sure that there are pressures at a political level that are not something that I necessarily understand.
QUINN: And therein lies the problem. It seems to me that we so fundamentally disagree on policy issues with the critics that nothing we say is persuasive to them. It’s a political problem, not one about facts and evidence.
MUIR: But the fact that the critics seem to bear all the credibility and the practitioners who live it on a day-to-day basis have none is so perplexing.
QUINN: It is because there is a bunch of people out there who have made an entire career over challenging patent rights, challenging Bayh-Dole, and their claim to fame and their resume and credentials is just that they’re a critic.
QUINN: So. There’s only so much we can do and sometimes it feels to me like I’m trying to shovel water back into the ocean. But having a group like AUTM on the frontlines is extremely helpful. And I just keep hoping that eventually it’s going to make a difference. It does seem every time NIH takes a look at this they do come out to the conclusion it would just be nice to get to a space where we could fight a different battle.
MUIR: Yes. And I’ll tell you one thing that we’re doing that I’m hoping will make a difference. The numbers are the numbers are the numbers and economists are going to mix them every which way to Sunday. But one of the things that AUTM has done is the Put a Face On It video campaign. Are you familiar with it?
QUINN: No, not really. Could you tell me a little bit about it?
MUIR: I’m going to send you a link to AUTM’s Put a Face on It campaign. We have right now a half dozen videos. Just like the Better World Project in printed form, our goal is to put many, many of these videos out there. They basically put a face on the real people whose lives have been forever changed because of the discoveries that have come out of the universities. So for example, the one that we did here at UF shows a young man in a hospital bed who’s about to lose his leg because he took a bullet in Afghanistan and the doctor said we’ve got to amputate. He said,”No way, Jose!” Doctor got on the phone, found out about a new graft, a nerve graft that was developed here at UF. The bottom line is not only is the man out jogging again but he’s serving his second tour of duty in Afghanistan. So we’ve got a picture of him in the hospital bed and him jogging after the surgery When we go back to why do what we do which is to improve the human condition, how do you put an economic impact value on that man’s life? And so we have story after story like that showing real people and we’re hoping that that’s going to make a difference. And I’ll send you a link to it so if there’s any way in your article that you can maybe put a link and drive people to that, that would be great.
QUINN: Yes, absolutely. I think that that’s a great, great strategy. And that’s something that I’ve talked about, encouraged others to do as well at the universities and tech transfer. Because I think it’s extremely powerful. We had Betsy de Parry came to the Bayh-Dole 30th celebration and she spoke. And she turned to Senator Bayh in tears and said, “I’m alive today because of you.” Because she had some very rare form of cancer and the cure came from a university. And they partnered with the private sector and they got it to market. And because of that she was able to still be alive. (See also Why Bipartisanship Matters, written by Betsy de Parry).
MUIR: Exactly, exactly. We need to get thousands of those stories out the door and on Capitol Hill because those are the kinds of stories that are going to make a difference. We can fight those numbers all we want. But having real people whose lives have forever changed tell their story, that’s what’s going to make a difference.
QUINN: I agree. I couldn’t agree with you more. So. All right, well, I really appreciate you taking the time to chat with me. I think this was a great conversation.
MUIR: Well, and I really appreciate your willingness to help us out here. And whatever I can do to help you please by all means just reach out and let me know.
QUINN: Will do. Thanks a lot, Jane.
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About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.