Is Patent Protection Industrial Policy? Notes on the Political Economy of University Patenting

The Bayh-Dole Act of 1980 allowed universities to take title to inventions resulting from federally funded research. This reform accelerated the preexisting uptick in university patenting resulting in portfolios heavily weighted in pharmaceuticals, chemicals, and biotechnology. That Bayh-Dole had the effect of an R&D subsidy for those sectors authorizes its analysis as an industrial policy. A subsidy creates its own political force that organizes to protect it; an interest group that promulgates a narrative linking the subsidy to the national interest. This paper takes just that perspective and examines the politics of this policy, identifying the Bayh-Dole lobby and their narrative. This policy was not a broad-based patent law reform, rather it was pushed by a handful of policy entrepreneurs and universities working upstream in drug R&D. In addition, the law, as enacted, placed constraints on university patenting and exclusive licensing; such an activity was never considered an unqualified good. Yet, over forty years, the Bayh-Dole coalition grew into a formidable defender of this subsidy claiming widespread benefits without social costs. They present this policy as the nexus between federal R&D funding and national innovation. In light of the history told here, such a narrative becomes suspect of being one-sided