Fail-safe clause of intellectual property law has been ignored to citizens’ detriment

Capital Times: Saturday, October 10, 2009

Our country’s financial and health care crisis has caused us to pause and reexamine what is still working and what needs to be fixed in our economy. Regardless of our political persuasions, there are few citizens who still doubt that our financial system is broken and in serious need of repair.

For most Americans, it’s no longer a question of is change needed but if we will have the good sense to act decisively now both in terms of meaningful regulation and strict and steady enforcement.

This painful re-examination has already begun and the most important thing we have learned is that many of the policy safeguards designed to prevent the economic collapse already existed but were flagrantly ignored by all three branches of our government.

I would like to share one example: In 1980 Congress past the Bayh-Dole Act. Its purpose was to provide our free market system with greater intellectual property incentives to more effectively develop and commercialize scientific discoveries, particularly in the rapidly emerging biotechnology field.

Moving away from federal ownership of federally supported research, Bayh-Dole shifted the ownership of intellectual property, both the right to patent and license inventions, from the federal government to the scientist-inventor and to universities.

Soon after this bill’s passage, through executive branch action, patent and licensing rights were also extended to large mega corporations.

Recognizing the potential monopolistic pitfalls and huge conflict of interest involved in this potential multi-billion dollar windfall to private enterprise, and the opportunities for abuse, the authors of Bayh-Dole included a fail-safe mechanism called “march-in” rights

This provision allowed the executive branch and its federal departments who fund public and private research to intervene and remove an exclusive license when the holder refused to bring the invention or product to market in a timely fashion or abused its commercialization through exorbitant pricing.

Bayh-Dole is a classic example of a federal act with tremendous potential for both good and bad that has been ignored for nearly 30 years, leaving it without proper congressional oversight, executive and judicial enforcement.

Congress has done absolutely nothing to significantly reform Bayh-Dole in a manner that would make the government’s march-in rights provision more clear and actionable. To date the executive branch has not once intervened, even in the face of ever-higher drug prices by large pharma, to enforce reasonable price setting. Similarly the federal court system has blatantly ignored the clear legislative intent of this act to provide both consumer access to new innovations and fair pricing.

The history of the Bayh-Dole Act is just one of many instances where well intended laws were passed but through time and neglect have been ignored and rarely if ever enforced. The result of such inaction has also been a major contributor to our country’s present health care crisis. This is largely due to public servants who are forever pandering to special interests over our common welfare.

Benedict is a retired social worker and resides in Madison. He blogs at danecountyalmanac.blogspot.com