7 ms·

The keyword you are looking for is Bayh-Dole. The short explanation goes like this: before Bayh-Dole patent rights were indeed with the federal government, but

The keyword you are looking for is Bayh-Dole. The short explanation goes like this: before Bayh-Dole patent rights were indeed with the federal government, but the Government did a rather poor job of turning the accumulated IP into money. Bayh-Dole was passed in the late Seventies, during the Carter-Reagan recession, and the idea was that the patents should now lie with researchers and universities because they would have a better idea how to exploit them, and it was unsaid that with this alternative funding channel open federal research expenditures could be reduced. The long version is that it is really complicated. A whole new ecosystem has grown up around this environment, and the patent system as is is very suitable for actual commercial processes but not at all for basic methods used in processes. Also: Stanford v. Roche

nostromo 13y ago
I doubt sparkie wants the federal government to hoard the patents it pays for. I'm guessing he or she would like to see findings not patented at all.
- sliverstorm 13y ago
  You've seen how well our patent system works. If the findings were not patented by somebody, Big Corp. would just download the whitepaper, print it, submit it to the patent office and get the patent.
  - fnordfnordfnord 13y ago
    An un-patent then, ie anybody can use this thing that taxes paid to develop.
    - 1457389 13y ago
      So let's say I discover a potentially groundbreaking new pathway that can be exploited by a new drug candidate to attack a major disease. Now who is going to go put in $350 million to get that drug candidate through PhI/II/III and beyond, with little guarantee of success, if they have no IP protection to stand on? Why would any rational investor fund such an endeavor when anyone else can step in once all the hard work (averaging $5 billion per successful drug) is done and reap the rewards?
      - benrapscallion 13y ago
        This is indeed the scenario in drug development. Academic research can only take it so far. Someone then has to assume financial risk and bring academic findings to the clinic.
        1457389 13y ago
        True, but what is the fundamental problem in allowing academics to patent their drug development research? Without a system like that drugs like Lyrica wouldn't exist.
        dnautics 13y ago
        >Without a system like that drugs like Lyrica wouldn't exist. You don't know that for sure. On the other other hand we do know things, like without the open source ethic Wikipedia wouldn't exist.
        1457389 13y ago
        Come on you can't compare web development to drug development. Ditto with the guy talking about polio. With the current regulatory landscape we need patent protection to incentivize anyone entering this industry. And even then you have CEOs of major biotech firms calling startups a delusional risk given the low probability of success.
        dnautics 13y ago
        Patenting is unneccessary. It also causes a lot of problems like siloization and reduplication of effort, which adds to the cost of drug R&D. The structure of the academic-science-industry complex has become so distorted that I'm not sure CEOs of biotech firms are the most competent people to be developing drugs. Ask any PhD (even those who are in the industry) about what they think of how pharma picks what to put into their pipelines, and you will nearly unanimously get a dispirited answer that is some combination of herd behavior, lack of creativity, legal departments, CYA, and just plain dumb business management. An example: Pfizer closed down their Lansing michigan plant and wanted to force their employees to relocate to San Diego, without doing a real analysis of the decision, and on the eve of the move came to find out that the one person running their fermenter culture system didn't want to move - he wanted to raise his daughters on a farm and San Diego was too expensive for his pay grade. So they lost the ability to basically do every bioassay that they were doing in Lansing. Three years later, I had the opportunity to work next to the massive san diego pfizer campus. The facility was 2/3 empty and pfizer was struggling to find extra tenants and toying with a 'bio-incubator' idea. http://indysci.org/projectmarilyn http://indysci.org/projectmarilyn
- HarryHirsch 13y ago
  You can argue that anything done at a university was done with university facilities (and certainly by the individual researchers). You can also look at it from the angle of efficiency (which way of commercializing a university's research is the best way of doing more research there). Congress did both, and they came up with Bayh-Dole. I'm not saying that this is the best environment, but it is the environment that we have, and these arguments are not outrageous. Besides, this is the environment that biotech startup are coming from, and top universities are making big dollars from royalties. That's why I said that it's really complicated.
  - cowsandmilk 13y ago
    Universities charge the government for use of their facilities. It is an overhead rate often of 60+% on top of the costs of paying researchers, buying lab supplies, etc. Frequently there is triple dipping, where a university gets a grant for a piece of equipment, charges the grants directly for use of that equipment, then also claims they need to be paid in the overhead for making the equipment available. Anyone familiar with the finances sees it as ridiculous.
    - Loughla 13y ago
      From my (albeit limited) experience in two large state universities, one of which with a direct focus on research, and two much smaller local colleges, your statement is a bit inflammatory, and isn't 100% accurate. All grants are allowed to charge indirect costs to the grant fund. These indirect costs are used to cover the cost of facilities, maintenance and all the little bits that no one ever thinks about. No one buys a piece of equipment expecting there to be no maintenance whatsoever. These indirect costs are always governed by an agreed-upon rate set between the host institution and the funding entity. The federal government in particular has very clearly spelled out rules regarding this. For example - the grant that funds my work right now has a very clearly legislated indirect cost rate of 8%. If our indirect costs exceed that 8% monthly, we can lose our funding. Now where we get into the part where you're not 100% accurate, and I believe being a bit inflammatory is the triple dipping. Institutions can get a grant to purchase equipment, and then charge the same grant for the use of the equipment. The institution can charge for the personnel hours that run the equipment on related projects, they can charge that indirect cost that we discussed earlier, but that's about it. It's not as if they can just make up a number and charge the government that much to use the equipment for related projects. There are circulars from the Office of Management and Budget that dictate what you can and can't do with your money - for example, colleges and universities have to adhere to the cost principles outlined in OMB A-21, available here: http://www.whitehouse.gov/omb/circulars_a021_2004 http://www.whitehouse.gov/omb/circulars_a021_2004 if you want some light reading. On top of the basic OMB circulars, all federal grants have additional legislation that add further stipulations to how money can be spent, but come from any number of 1000 sources, so I'm not going to cite them. Anyway, the institution cannot just charge the government for use of the equipment. Secondly - they are not paid 'overhead' for making the equipment available. They are paid an indirect cost rate to maintain, store and generally keep the facility running for grants. This rate is very clearly spelled out in any grant documents. I've not seen 60+% in any grant I've ever worked with. In smaller institutions they tend to be around 10-20%. On the larger campuses, the average indirect rate was 32%. Anyone familiar with the finances know that there are legislation and regulation in place to dictate all of this, and while it may be convoluted, it's really not as predatory as you make it out to be.
Houshalter 13y ago
The point is sending the patent into the public domain so anyone can exploit it. You could argue that the monopoly of the patent creates an incentive to monetize it. I am skeptical of that, but if it's true, then the government could auction the patent instead and at the very least recoup some of their money from it. If no one wants to buy it, then it can go into the public domain.
- mogrim 13y ago
  So what happens when the US government funds the research, and a Chinese company just uses it and makes the money?
  - wtracy 13y ago
    Exactly what happens now: Nothing. US patents aren't enforceable in China to begin with.
    - mogrim 13y ago
      They become enforceable when the Chinese company exports them back to the US, though. I wonder if the US government could offer free licensing to all national companies, which would seem to be the best of both worlds?
  - betterunix 13y ago
    What difference does that make? Everyone benefits from the results of research.
    - mogrim 13y ago
      I tend to agree, but you could argue that as US taxpayers are paying for the research it would be stupid/unethical/incorrect not to maximise any potential profit from its results. (Note: I'm not a US citizen, I'm British. s/US/UK/ and the basic result is the same...)

nostromo 13y ago

I doubt sparkie wants the federal government to hoard the patents it pays for. I'm guessing he or she would like to see findings not patented at all.

sliverstorm 13y ago
You've seen how well our patent system works. If the findings were not patented by somebody, Big Corp. would just download the whitepaper, print it, submit it to the patent office and get the patent.
- fnordfnordfnord 13y ago
  An un-patent then, ie anybody can use this thing that taxes paid to develop.
  - 1457389 13y ago
    So let's say I discover a potentially groundbreaking new pathway that can be exploited by a new drug candidate to attack a major disease. Now who is going to go put in $350 million to get that drug candidate through PhI/II/III and beyond, with little guarantee of success, if they have no IP protection to stand on? Why would any rational investor fund such an endeavor when anyone else can step in once all the hard work (averaging $5 billion per successful drug) is done and reap the rewards?
    - benrapscallion 13y ago
      This is indeed the scenario in drug development. Academic research can only take it so far. Someone then has to assume financial risk and bring academic findings to the clinic.
      - 1457389 13y ago
        True, but what is the fundamental problem in allowing academics to patent their drug development research? Without a system like that drugs like Lyrica wouldn't exist.
        dnautics 13y ago
        >Without a system like that drugs like Lyrica wouldn't exist. You don't know that for sure. On the other other hand we do know things, like without the open source ethic Wikipedia wouldn't exist.
        1457389 13y ago
        Come on you can't compare web development to drug development. Ditto with the guy talking about polio. With the current regulatory landscape we need patent protection to incentivize anyone entering this industry. And even then you have CEOs of major biotech firms calling startups a delusional risk given the low probability of success.
        dnautics 13y ago
        Patenting is unneccessary. It also causes a lot of problems like siloization and reduplication of effort, which adds to the cost of drug R&D. The structure of the academic-science-industry complex has become so distorted that I'm not sure CEOs of biotech firms are the most competent people to be developing drugs. Ask any PhD (even those who are in the industry) about what they think of how pharma picks what to put into their pipelines, and you will nearly unanimously get a dispirited answer that is some combination of herd behavior, lack of creativity, legal departments, CYA, and just plain dumb business management. An example: Pfizer closed down their Lansing michigan plant and wanted to force their employees to relocate to San Diego, without doing a real analysis of the decision, and on the eve of the move came to find out that the one person running their fermenter culture system didn't want to move - he wanted to raise his daughters on a farm and San Diego was too expensive for his pay grade. So they lost the ability to basically do every bioassay that they were doing in Lansing. Three years later, I had the opportunity to work next to the massive san diego pfizer campus. The facility was 2/3 empty and pfizer was struggling to find extra tenants and toying with a 'bio-incubator' idea. http://indysci.org/projectmarilyn http://indysci.org/projectmarilyn
HarryHirsch 13y ago
You can argue that anything done at a university was done with university facilities (and certainly by the individual researchers). You can also look at it from the angle of efficiency (which way of commercializing a university's research is the best way of doing more research there). Congress did both, and they came up with Bayh-Dole. I'm not saying that this is the best environment, but it is the environment that we have, and these arguments are not outrageous. Besides, this is the environment that biotech startup are coming from, and top universities are making big dollars from royalties. That's why I said that it's really complicated.
- cowsandmilk 13y ago
  Universities charge the government for use of their facilities. It is an overhead rate often of 60+% on top of the costs of paying researchers, buying lab supplies, etc. Frequently there is triple dipping, where a university gets a grant for a piece of equipment, charges the grants directly for use of that equipment, then also claims they need to be paid in the overhead for making the equipment available. Anyone familiar with the finances sees it as ridiculous.
  - Loughla 13y ago
    From my (albeit limited) experience in two large state universities, one of which with a direct focus on research, and two much smaller local colleges, your statement is a bit inflammatory, and isn't 100% accurate. All grants are allowed to charge indirect costs to the grant fund. These indirect costs are used to cover the cost of facilities, maintenance and all the little bits that no one ever thinks about. No one buys a piece of equipment expecting there to be no maintenance whatsoever. These indirect costs are always governed by an agreed-upon rate set between the host institution and the funding entity. The federal government in particular has very clearly spelled out rules regarding this. For example - the grant that funds my work right now has a very clearly legislated indirect cost rate of 8%. If our indirect costs exceed that 8% monthly, we can lose our funding. Now where we get into the part where you're not 100% accurate, and I believe being a bit inflammatory is the triple dipping. Institutions can get a grant to purchase equipment, and then charge the same grant for the use of the equipment. The institution can charge for the personnel hours that run the equipment on related projects, they can charge that indirect cost that we discussed earlier, but that's about it. It's not as if they can just make up a number and charge the government that much to use the equipment for related projects. There are circulars from the Office of Management and Budget that dictate what you can and can't do with your money - for example, colleges and universities have to adhere to the cost principles outlined in OMB A-21, available here: http://www.whitehouse.gov/omb/circulars_a021_2004 http://www.whitehouse.gov/omb/circulars_a021_2004 if you want some light reading. On top of the basic OMB circulars, all federal grants have additional legislation that add further stipulations to how money can be spent, but come from any number of 1000 sources, so I'm not going to cite them. Anyway, the institution cannot just charge the government for use of the equipment. Secondly - they are not paid 'overhead' for making the equipment available. They are paid an indirect cost rate to maintain, store and generally keep the facility running for grants. This rate is very clearly spelled out in any grant documents. I've not seen 60+% in any grant I've ever worked with. In smaller institutions they tend to be around 10-20%. On the larger campuses, the average indirect rate was 32%. Anyone familiar with the finances know that there are legislation and regulation in place to dictate all of this, and while it may be convoluted, it's really not as predatory as you make it out to be.

Houshalter 13y ago

The point is sending the patent into the public domain so anyone can exploit it. You could argue that the monopoly of the patent creates an incentive to monetize it. I am skeptical of that, but if it's true, then the government could auction the patent instead and at the very least recoup some of their money from it. If no one wants to buy it, then it can go into the public domain.

mogrim 13y ago
So what happens when the US government funds the research, and a Chinese company just uses it and makes the money?
- wtracy 13y ago
  Exactly what happens now: Nothing. US patents aren't enforceable in China to begin with.
  - mogrim 13y ago
    They become enforceable when the Chinese company exports them back to the US, though. I wonder if the US government could offer free licensing to all national companies, which would seem to be the best of both worlds?
- betterunix 13y ago
  What difference does that make? Everyone benefits from the results of research.
  - mogrim 13y ago
    I tend to agree, but you could argue that as US taxpayers are paying for the research it would be stupid/unethical/incorrect not to maximise any potential profit from its results. (Note: I'm not a US citizen, I'm British. s/US/UK/ and the basic result is the same...)