Adoption of the Bayh-Dolye Act in Developed Countries: Added Presure for a Broad Research Exemption in the United States?

Numerous developed countries, most if not all members of the Organization of Economic Cooperation and Development (OECD), including Japan, France, the United Kingdom, Germany, Austria, Denmark, Norway, Portugal, Spain, and Finland, have or are considering adopting legislation similar to the Bayh-Dole Act. These countries apparently believe that passage of legislation similar to the Bayh-Dole Act will lead to the transfer of government funded research results from the university laboratory to the marketplace and other economic activity. In the United States, the birthplace of the Bayh-Dole Act (the Act), it is not entirely clear whether its passage is the direct result or sole cause of the increase in patenting and licensing occurring after its passage. Much of this university patenting and licensing has been in the biotechnology field. Some commentators believe that the purported positive consequence of the Act-increased patenting and licensing-would have occurred without the Act. Some critics of the Act argue that it upsets the production and dissemination of scientific knowledge, particularly basic science, by the academic enterprise. The Act is also criticized for requiring the public to pay twice for an invention: once by funding the invention through taxes, and again, by extracting a supra-competitive price in the market through patents. Also, the Act arguably reduces the amount of information directed to the public domain-the foundation of new innovation-and the consequential spillover of benefits by allowing the patenting of government funded inventions. Perhaps the most frequently raised criticism of the Act is that it is contributing to the development of a tragedy of the anticommons in biotechnology innovation. A tragedy of the anticommons occurs when too many property rights are granted in one particular piece of property, with the result that the holders of the rights are unable to transfer and aggregate those rights to use the property. There is currently conflicting empirical evidence on whether an anticommons has emerged in the biotechnology field in the United States. This essay makes several points. First, the Bayh-Dole Act may not be successful in Europe and Japan-success judged by increased patenting and licensing-because of the differences in the history, practice, and structure of most European and Japanese university systems compared with the U.S. university system. It may take substantial change in the practice and structure of European and Japanese university systems for legislation similar to the Bayh-Dole Act to be successful. While European and Japanese university systems appear to be undergoing that change, it will likely take a substantial amount of time to modify long-standing practices and existing structure. Second, assuming legislation similar to the Bayh-Dole Act is successful in Europe and Japan, it may make the development of an anticommons more likely in the United States because of increased patenting and licensing by European and Japanese research universities and spin-off companies in the biotechnology field in the United States. Finally, while an anticommons may be avoided in European countries and Japan, as those countries generally have a more robust research exemption to patent infringement, the increased patenting and licensing in the United States may result in an anticommons because of the limited common law research exemption. This may result in pressure for the United States to enact or develop, through the common law, a more robust exception similar to that of other developed countries