Transcript University-Industry Relations: Historical Perspective

History of University IP Policies:
Changing Objectives?
Yale AIDS Network
April 19, 2003
Why Care About University Patenting?
• While academic R&D is a small proportion of total U.S. R&D, academic basic
research comprises roughly 40-50 percent of total U.S. basic research.
• Nearly 60 percent of academic R&D is funded by the federal government.
Source: NSF Science and Engineering Indicators, 2002.
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20
For Most of
Century, Universities
Rarely Patented Research Output
• While patenting activity dates back to 1900s, most universities resisted direct
involvement and some discouraged it.
• Rights to inventions from federal funds typically remained in the public domain.
• Cumbersome process required for patenting – univs. had to request waiver
Source: Mowery and Sampat (2001)
University Patenting – Phenomenon of
the 1980s and 1990s
• University patenting surged in the 1970s, from less than 250 patents granted in 1975
to over 3,000 patents granted in 2000.
• Publicly funded biomedical research accounts for a major share of patents
Source: Jaffe (2000)
University Patenting in Perspective
180000
4000
160000
3500
140000
3000
120000
2500
Total U.S. Patents (Left Scale)
100000
2000
80000
1500
60000
Domestic U.S. Patents (Left Scale)
40000
20000
1000
500
University Patents (Right Scale)
0
0
82
84
86
88
90
92
94
96
Source: USPTO (http://www.uspto.gov/web/offices/ac/ido/oeip/taf/h_counts.htm), NSF Science and Engineering Indicators, 2002.
98
2000
University Patents
Total & Domestic Patents
• University patenting has grown much faster than other patenting activity in the U.S.
University IP Policies – Early Years
• Academic community not always accepting, virtual taboo initially
• Patents were generally managed by independent, non-profit entities
• UC & Research Corporation - 1912
– Cottrell’s 1907 patent to clean smokestack emissions
– UC refused to accept rights to the patent
– Independent, non-profit group that managed patents
– Used income to support further research
• Wisconsin Alumni Research Foundation (WARF) - 1925
– Steenbock’s method for enriching Vitamin D content
– University clung to “hands off” attitude
– Butter vs. margarine and vested interests in Wisconsin
– Patent managed by WARF
– Exclusive license given to Quaker Oats in 1927 for Vitamin D oil
– Concern over licensing fees and price of irradiated milk
– WARF amassed large endowment, but received much criticism
Medical Patenting Was Particularly
Controversial
• Scarlet Fever Case – Widely Criticized Decision to Patent
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Chicago physicians’ 1924 discovery of antitoxin
Numerous companies interested in commercializing
Concern about quality control led to patenting
AMA declined patents
Independent committee established instead
Criticism from medical community re: exercise of control over substance with
public health consequences
– Lancet and BMJ on danger of monopoly – high prices, hindrance of further
research, commercialization of research process
– Affected decisions of many other researchers
Universities Often Prioritized Public
Health Over Profits
• Harvard’s Decision to Not Patent in 1920s
– Discovery of treatment for anemia at Medical School – 1926
– Corporation considered strategies of developing discovery, both to protect
public interest and ensure availability
– Discussion centered on whether to patent or not, with concern about
profession’s long-standing ethical tradition against patenting
– Consideration of precedents at Berkeley (tethelin) & Toronto (insulin)
– Consensus was that patenting not essential to protect public interest
(quality-control, piracy, etc.) and that patents would generally result in
limited competition and higher prices
– Decision to not file patent applications
– Harvard declined to profit from innovations in public health or medicine
The “Patent Problem” in 1930s
• Active debates over patenting in 1930s led American
Association for the Advancement of Science (AAAS) to
survey the “patent problem”
• Advantages
– Incentives for commercialization lacking w/out
exclusive license (a key argument made in support of
Bayh-Dole in 1970s)
– Reduced risk of “patent piracy”
– “Quality control” in inventions based on biomedical
research
– New sources of revenue to strengthen academic
research
The “Patent Problem” in 1930s
• Disadvantages
– Negative effects on progress of research, esp. in fields where
advances are cumulative (required permission to use patents
on “liberal terms”)
– Tension between patenting and open science norms
– Potential to bias academic inquiry away from basic research
• Medical patents as a special case
– Widespread opposition and concern that public would
perceive universities profiteering at public expense in field of
public health
The Norm Before World War II
• Most universities lacked patent policies before World War II
• Yale: (adopted 1938)
“. . . it is, in general, undesirable and contrary to the best interests of medicine
and the public to patent any discovery or invention applicable in the fields of
public health or medicine; but if, at any time, any member of the faculty deems it
necessary solely for the protection of the public, without profit to himself or the
University, to control any invention or discovery by means of a patent, he shall
bring the matter before the Prudential Committee”
• Harvard: (no formalized patent policy except following, adopted 1934)
“No patents primarily concerned with therapeutics or public health may be taken
out by any member of the University, except with the consent of the President
and Fellows; nor will such patents be taken out by the University itself except for
dedication to the public”
Source: Palmer (1948)
Post-World War II Trends
Federal Government R&D Support Rises
• Substantial increase in federal funds
for universities
– Univ share of basic research doubled
25% - 50% between 1953-1968
• Third party involvement common into
1960s, primarily via Research Corp.
• Some universities allowed patenting
only if clearly in public interest
• Prohibitions on medical patenting
remained until 1970s
Source: NSF Science and Engineering Indicators, 2002.
Academic R&D in Biomedical
Sciences Surged in 1970s…
• Molecular biology emerged
as field of major advances
in basic science
• Many of these advances had
commercial applications
• Greatest increases in
funding in 60s & 70s were
in biomedical sciences
• Growth of biomedical
sciences played a role in
1970s rise in univ patenting
56 pct. of total academic R&D expenditures went to the life sciences.
Source: NSF Science and Engineering Indicators, 2002.
…as did Patents in Biomedical Sciences
Changes in 1970s
• Universities began direct
management of patent portfolios
• Process of getting patents and
rights to license remained
cumbersome
• IPAs between federal agencies
and universities emerged as a
common way for to patent and
license
• Decline in federal funding led to
more aggressive patenting efforts
• 1974 - Harvard ends stance
against patenting medical
innovations
Source: NSF Science and Engineering Indicators, 2002.
Percent of total academic patents in three largest academic utility classes
Effects of Bayh-Dole?
• Growth in the proprietary nature of university research began to occur in 1970s.
Source: Jaffe (2000)
1980 – Patent and Trademark Law
Amendments Act (Bayh-Dole)
• Goal to increase technology transfer and utilization of federally-funded research
• What did it do?
– Universities given right to retain the property rights to inventions made
under federal funding
– Exclusive licensing permitted
– No distinction between downstream inventions and fundamental research
discoveries
• Rationale
– Commercialization: Basic nature of university research requires further
development by industry
– Industry won’t take on risk without exclusive licensing rights
– Universities won’t transfer as much without financial incentives
Bayh-Dole Had Special Provisions for
Preserving the Public Domain
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Funding agencies permitted to restrict patenting ex-ante only in
“exceptional circumstances” that contradict goals of Bayh-Dole (such
determinations can be challenged – and provision is cumbersome)
Agencies can exercise “march-in rights” to compel licensing of a
university patent if necessary to alleviate public health or safety needs
NIH has never exercised these rights – significant administrative obstacles
For human genomic DNA sequencing information, NIH issued statement
against patenting – effectively contributing to a “no-patenting” norm
w/out forbiding it
NIH has sought to promote goals through hortatory statements
Reasonable pricing clause for commercialized federal research existed
initially, but was repealed by the Clinton Administration
Factors Behind the Rise in
University Patenting
•
Causes unclear
–
Widely believed that all due to Bayh-Dole, but other factors also
important
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Creation of technology transfer offices
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Wider scope of patent law in biotechnology & software
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Changes in acceptability of patenting
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Development of new fields of science
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Increased industry funding
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Orientation toward applied research
Universities Have Become Aggressive
in Claiming IP Rights
Membership in the Association of University Technology Managers (AUTM)
Source: Bremer, 2001 speech (http://www.autm.net) - data from AUTM Licensing Survey
Licensing Activity Has Surged…
Number of Licenses Issued Annually
Source: Bremer, 2001 speech (http://www.autm.net) - data from AUTM Licensing Survey
…as Have Royalties from Licensing
Royalties to Universities/Hospitals in Millions of Dollars
Source: Bremer, 2001 speech (http://www.autm.net) - data from AUTM Licensing Survey
Widespread Patenting Leads Raises
Many Concerns Even Today
• Access to medicines and other technologies developed with federal funds
• Pajaro Dunes Conference – 1982
– Organized by President of Stanford – worried about patents making university environment
“so proprietary, so secret, so discouraging to exchange that in the long run it induces an
inhibiting effect on the research enterprise”
– Guidelines essential for healthy academic science
• Prompt publication of research results
• Conflict-of-interest policies
• Licensing okay, but agreements should not be exclusive
• Slower rate of technological advance?
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Less basic research
Restrictive licensing agreements
Increased secrecy and delay in publications
Reduced access to early stage innovations