Promote the Progress

Posted by J Matthew Buchanan at 09:30 AM | Permalink

Fortune magazine, in its 75th Anniversary edition, recently ran a critique of the Bayh-Dole Act, the federal law that essentially grants title to inventions made with federal research dollars to universities.

The article, “The Law of Unintended Consequences,”acknowledges that the law essentially gave birth to the US biotech industry and spurred the formation of technology transfer departments across the country.  Nevertheless, its not a friendly view of the law.  Indeed, its a harshly critical one.

The author argues that the law has turned the American university into a sort-of school-corporation beast that has stifled innovation in pursuit of licensing revenue, particularly in the medical arts.  The thesis of the article, as I see it, is this:

because of Bayh-Dole (and a few other changes to patent law in the last several decades), academic scientists treat their inventions like property, protecting them from disclosure that may negatively impact their commercial value.

because of this paradigm shift in the way scientists think, the free-flow of ideas amongst academic scientists has all but stopped and has been replaced with expensive patent prosecution and litigation.

The author is right, of course.  Any academic institution worth its salt today has a technology transfer office.  Need evidence of the importance of technology licensing deals to your favorite university?  Check the alumni magazine…there’s likely to be an announcement of a recent deal.

The conclusion — Bayh-Dole has stifled biomedical innovation in the United States — is a little far-reaching if you ask me.

Here’s the money quote:  “…Bayh-Dole has served mostly as a nervous mother for a science that never needed one.  New biomedical discoveries are now coddled and kept out of the rain — and it’s hurting progress.”

There’s no doubt about it – Bayh-Dole has changed the way in which universities view scientific research and invention.

I’m just not convinced that this is a bad thing.

No matter your thoughts, the article is worth reading.

Posted by J Matthew Buchanan at 08:46 AM | Permalink

Representative Mike Simpson (ID) introduced H.R. 784 (.pdf) on February 10, 2005. The bill, dubbed A bill to Clarify that service marks, collective marks, and certification marks are entitled to the same protections, rights, and privileges of trademarks, is identical to S. 2796/H.R. 5194 introduced in the 108th Congress.

I haven't been able to locate any significant comments on the introduction of the new bill, but everything from the prior bills is still relevant. This prior PTP post discusses the bills from the 108th Congress.

The bill is designed to specifically address the decision of the Second Circuit Court of Appeals in Idaho Potato Commission v. M&M Produce Farm and Sales (.pdf) (335 F.3d 130, 2d Cir. 2003). In Idaho Potato Commission, the court interpreted the Lanham Act as requiring that certification marks be treated differently than trademarks with respect to "no challenge" provisions in license agreements. Under an agreement that includes a "no challenge" provision, the licensee acknowledges and agrees not to challenge the validity of the mark.

Many courts have upheld "no challenge" provisions in trademark license agreements and dismissed validity challenges brought by the licensee. Patent license agreements, however, are treated very differently. In Lear v. Adkins (395 U.S. 653, 1969), the Supreme Court explicitly overruled precedent establishing licensee estoppel. In Lear, the Court acknowledged that, considering the preclusive effect of patents, it is desirable to encourage challenges to the validity of a patent. The Court stated that "[l]icensees may often be the only individuals with enough economic incentive to challenge the patentability of an inventor's discovery."

In Idaho Potato Commission, the Second Circuit Court of Appeals ruled that "no challenge" provisions in license agreements for certification marks are governed by Lear, reasoning that the policy considerations underlying certification marks is more analagous to patent policy than trademark policy.

H.R. 784 is designed to remove this newly-established distinction between certification and other types of marks.

Posted by J Matthew Buchanan at 02:40 PM | Permalink

Link: Via Licensing Corporation, a subsidiary of Dolby Labs, is calling for WiMax patent holders to join a licensing pool "...with the ultimate goal of creating a portfolio of essential 802.16 technology that can be offered to companies at a single license price."

WiMax is the next generation wireless technology that promises dramatically increased speed, and distance measured in miles and tens of miles. With WiMax, you might never be disconnected. Think of driving down the highway, jumping from WAP to WAP and always being connected.

WiMax is being implemented under the 802.16 IEEE standard, and Via is hoping to pool patents it believes are essential to the implementation of the standard. The company defines the prospective group of patents as those "...that have one or more claims that would necessarily be infringed by the implementation or use of the 802.16 standard."

Interested patent holders have until November 19 to submit patents.

An announcement from Via is here.

Posted by J Matthew Buchanan at 08:11 AM | Permalink

Senators Larry E. Craig (ID) and Dick Durbin (IL) introduced S.2796 as a bill to clarify that service marks, collective marks, and certification marks are entitled to the same protections, rights, and privileges of trademarks. The bill makes simple amendments to the Lanham Act to accomplish its goal (see text of the bill here (.pdf)).

The bill is designed to specifically address the decision of the Second Circuit Court of Appeals in Idaho Potato Commission v. M&M Produce Farm and Sales (.pdf) (335 F.3d 130, 2d Cir. 2003). In Idaho Potato Commission, the court interpreted the Lanham Act as requiring that certification marks be treated differently than trademarks with respect to "no challenge" provisions in license agreements. Under an agreement that includes a "no challenge" provision, the licensee acknowledges and agrees not to challenge the validity of the mark.

Many courts have upheld "no challenge" provisions in trademark license agreements and dismissed validity challenges brought by the licensee. Patent license agreements, however, are treated very differently. In Lear v. Adkins (395 U.S. 653, 1969), the Supreme Court explicitly overruled precedent establishing licensee estoppel. In Lear, the Court acknowledged that, considering the preclusive effect of patents, it is desirable to encourage challenges to the validity of a patent. The Court stated that "[l]icensees may often be the only individuals with enough economic incentive to challenge the patentability of an inventor's discovery."

In Idaho Potato Commission, the Second Circuit Court of Appeals ruled that "no challenge" provisions in license agreements for certification marks are governed by Lear, reasoning that the policy considerations underlying certification marks is more analagous to patent policy than trademark policy.

The bill is designed to remove this newly-established distinction between certification and other types of marks.

According to remarks by Mr. Craig, S.2796 is designed to make it clear that all types of marks protected by the Lanham Act are to be accorded the same rights and protections except as specifically provided by statute. In remarks made on the record regarding the background and intent of the bill, Mr. Craig stated that:

It is important to remove any perceived distinction between certification marks and collective marks as compared to trademarks, except as expressly provided otherwise by statute.....Licenses governing certification marks, and the provisions contained in such licenses, should be treated no less favorably than licenses for trademarks and other marks. "No challenge'' provisions, and other non-quality related provisions in certification mark licenses or agreements are to be accorded the same respect and treatment, and are to be the [sic] subject to the same principles of equity, as like provisions in trademark licenses and agreements.

The bill has been referred to the Committee on the Judiciary.

UPDATE October 7, 2004: S.2796 passed the Senate by unanimous consent on October 6, 2004. The companion bill, H.R.5194, has been referred to the House Committee on the Judiciary.

UPDATE February 10, 2005: Bill reintroduced in 109th Congress as H.R. 784.

Posted by J Matthew Buchanan at 03:36 PM | Permalink

Posted by J Matthew Buchanan at 09:40 AM | Permalink

Recently, the the USPTO announced that the University of California is the university that was awarded the most patents in 2003. The UC newspaper has posted an article that details some of the revenue UC has generated (and is generating) from its portfolio. The article also points out that the University intends to use its portfolio as leverage in negotiations with the governor on budget cuts.

Posted by J Matthew Buchanan at 08:53 AM | Permalink | TrackBacks (1)