America Needs Strong Patent Laws to Keep Inventing
By Fred Reinhart
In May, the Biden administration announced its support for a proposal at the World Trade Organization to suspend international intellectual property protections on Covid-19 vaccines.
Massachusetts Senator Elizabeth Warren quickly called this news "fantastic," arguing that it would speed up worldwide vaccine distribution.
But the senator revealed another reason she was pleased when she said U.S. support meant "the government might finally have the spine to lower drug prices here at home … [by using] march-in authorities."
She was referring to the 1980 Bayh-Dole Act, which she says -- incorrectly -- gives the federal government the right to "march in" and prevent a patent owner from granting exclusive license rights on innovations.
Unfortunately, gutting intellectual property rights -- either at the WTO or at home -- would do nothing to get more shots into arms. Patents are not the obstacle.
Rather, manufacturing bottlenecks, raw materials shortages, and transportation and infrastructure problems stand in the way of faster vaccine distribution to underserved populations.
In a parallel manner, calls for "march-in" to lower drug prices ignore the realities of academic technology licensing. Taking away patent rights through a false interpretation of Bayh-Dole would jeopardize an innovation system that benefits consumers across the world.
Patents give institutions exclusive control over their researchers' inventions for a set period of time. Before Bayh-Dole, if university researchers on government-supported grants achieved a breakthrough, the patent automatically belonged to the government.
But the federal government has never had the capacity to commercialize the research it funds. Prior to the law's passage, federal agencies held some 28,000 patents, and licensed less than 5 percent of them for further development.
Now, universities retain the right to license inventions, granting exclusive rights if that is what a commercial partner requires. As a result, Bayh-Dole has brought to society the benefits of new products and bolstered U.S. economic output by $1.7 trillion.
Nationwide, an estimated 300 drugs and vaccines have come out of public-private partnerships enabled by Bayh-Dole.
The "march-in" clause that Sen. Warren alluded to does allow the government to void an exclusive right under a patent -- but only under rare circumstances, like if a licensee sits on a technology or fails to produce enough of a needed product. For years, critics have tried to use this clause to argue that the government can "march in" if it doesn't like a product's price. But no administration of either political party has ever accepted this premise, and the bill's sponsors, Senators Birch Bayh and Bob Dole, have said that was never their intent.
Some Democrats now want to use this legal contortion as a means, however faulty, to force down drug prices. But if the administration reinterprets the law in this way, it will be the end of four decades of technical and economic advancement.
I hope that the White House rethinks its support for the global vaccine patent waiver. Another wise decision would be for the U.S. Department of Commerce, now in the process of updating Bayh-Dole, to include language to affirm that march-in cannot be triggered by a demand for price control. IP rights and investment incentives underpin the innovation ecosystem that is helping us get out of the current pandemic, as well as the one we will need to save us from health crises yet to come.
Fred Reinhart is a senior advisor for Technology Transfer at the University of Massachusetts Amherst. A past president of AUTM, he has more than 35 years of experience in academic technology transfer. Originally published in the Boston Herald.
