Bayh-Dole Reform and the Progress of Biomedicine

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I INTRODUCTION Advances in fundamental biomedical research play an important and growing role in the development of new therapeutic and diagnostic products. Although the development of pharmaceutical end products has long been a proprietary enterprise, (1) biomedical research comes from a very different tradition of open science. Within this tradition, longstanding norms call for relatively unfettered access to fundamental knowledge developed by prior researchers. (2) The tradition of open science has eroded considerably over the past quarter century as proprietary claims have reached farther upstream from end products to cover fundamental discoveries that provide the knowledge base for future product development. One important reason for this change has been a narrowing of the conceptual gap between fundamental research and commercial application. Once largely a matter of serendipity or trial-and-error, drug discovery is now critically dependent on basic knowledge of genes, proteins, and associated biochemical pathways. The foreseeable practical payoffs of this fundamental research make it easier to obtain patents for discoveries that, in an earlier era, would have seemed too far removed from useful applications for patent protection. As these early-stage advances in human understanding have become patentable, new firms have emerged, raising capital to develop and market proprietary research that lies somewhere between traditional academic research and end-product drug development. This upstream shift in patenting activity has met little resistance from the courts. In 1980, the Supreme Court held that genetically engineered microorganisms were eligible for patent protection, construing the language of the patent statute as permitting patents for anything under the sun that is made by man. (3) Shortly thereafter, Congress created a specialized court to hear appeals in patent matters, the Court of Appeals for the Federal Circuit (Federal Circuit). (4) The Federal Circuit has further extended the Supreme Court's expansive approach to patent eligibility (5) while relaxing the stringency of standards for patent protection, such as utility (6) and non-obviousness, (7) that might otherwise have prevented the patenting of incremental advances in upstream biomedical research. The Federal Circuit's generally supportive attitude towards patents has encouraged imaginative claiming strategies and unprecedented levels of patenting activity. These changes in the economic structure of research and in the case law have been important factors in promoting intellectual property claims in fundamental research discoveries. Perhaps an even more significant factor, however, has been the explicit U.S. policy of allowing grantees to seek patent rights in government-sponsored research results. This policy, which was codified beginning in 1980 with passage of the Bayh-Dole Act, (8) and the Stevenson-Wydler Act, (9) has turned universities into major players in the biopharmaceutical patenting arena. The goal of these legislative initiatives was to promote widespread utilization of federally-sponsored inventions. The sponsors of the legislation believed that grantee ownership of patent rights, which would permit grantees to convey exclusive licenses to their inventions to private firms, was necessary to motivate private investors to pick up where government sponsors left off and transform new discoveries into commercial products. (10) But the legislation draws no distinction between downstream inventions that lead directly to commercial products and fundamental research discoveries that broadly enable further scientific investigation. Universities have taken the opportunity to file patent applications on basic research discoveries, such as new DNA sequences, protein structures, and disease pathways, that are primarily valuable as inputs into further research, thereby accelerating the encroachment of the patent system into what was formerly the domain of open science. …