Patents and University-Industry Interactions in Pharmaceutical Research before 1962: An Investigation of the Historical Justifications for Bayh-Dole

Article excerpt

I. Introduction

The relationship between academic research and research and development within the pharmaceutical industry has been the focus of recent debates over the justification for the Bayh-Dole Act. (1) This relationship served as a critical prism through which many scholars argued for federal patent policy reform. (2) Supporters and opponents of patent reform, ultimately codified in the Bayh-Dole Act, presented diametrically opposed views regarding the impact of the patent policies implemented by the Department of Health, Education, and Welfare (HEW) in the late 1960s. (3) The Bayh-Dole Act was the embodiment of arguments promulgated by patent reform promoters who asserted that citizens would ultimately lose the benefits of federal funding of biomedical research in the absence of policies facilitating collaboration between academic scientists and pharmaceutical firms. (4) This collaboration would only be possible if the government protected industrial companies' exclusive rights to any inventions resulting from federally funded research. (5)

Private acquisition of rights in federally funded inventions received support from two reports on current patent policy released in the 1960s as well as the testimony of numerous scientists at congressional hearings. (6) Many scholars infer from these reports that the collaboration between universities and the biomedical research industry had been mutually beneficial until the 1960s. (7) However, knowledge of the history of collaborations between the National Institute of Health (NIH) grantees and industry referred to in such statements is currently very limited. Beginning in 1962, HEW started requiring that NIH grantees and third party laboratories solicited by the grantees (most often pharmaceutical companies and commercial testing laboratories), enter into formal patent agreements. (8) The terms of the agreements proved unacceptable to pharmaceutical companies, who consequently stopped screening compounds synthesized by academic scientists. (9) The terms of the HEW-mandated patent agreement did not substantially alter HEW's policy regarding exclusivity terms in the licensing of government-funded inventions. (10) However, the negative response by many researchers to the change in NIH policy underscored the pharmaceutical industry's need for exclusive rights in order to collaborate with NIH grantees in the development of their inventions. (11)

Two fundamental questions emerge from a study of the critical events in the years leading up to the formulation and enactment of the Bayh-Dole Act. First, how extensively did pharmaceutical firms collaborate with NIH grantees before 1962, and what motivated them to do so? (12) Second, why did reactions to the 1962 patent agreement emphasize the pharmaceutical industry's need for a guaranteed exclusive license as a quid pro quo for collaborating with NIH grantees? (13)

To address these questions, it is important to understand the different perspectives in the debate over federal government patent policy. (14) Additionally, it is critical to provide an historical account of the specific policies adopted by HEW and its predecessor, the Federal Security Agency (FSA). (15) As will become apparent, the formal policies left considerable discretion to the Surgeon General to promote the public interest through the disposition of government-sponsored inventions. (16) The reported collaborations between NIH grantees and industry, from which few patents resulted, combined with HEW's hostility to exclusive licenses on government-sponsored inventions, appear to contradict the pharmaceutical industry's claimed dependence on exclusive licensing arrangements. (17)

This paper then presents a few approaches to the resolution of this apparent contradiction based on the available evidence. In particular, it will be noted that the large pharmaceutical firms demanded, with great vigor, exclusive rights to government-sponsored inventions after 1962. …