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Context: The Bayh-Dole Act of 1980, which gave federal grantees and contractors the right to patent and license inventions stemming from federally funded research, was intended to encourage commercial dissemination of research that would otherwise languish for want of a patent incentive. The case of Columbia University’s Axel patents, which claimed a scientific method to introduce foreign proteins into nucleated cells, illustrates a secondary outcome of the Bayh-Dole Act: the incentive for federal grantees and contractors to pursue royalty revenues from patented research, even for inventions for which commercial use did not require patents. Methods: This article describes oral interviews with two of the three inventors and a former high-ranking administrator at Columbia; correspondence with several faculty members at Columbia to obtain key royalty figures and information about Columbia’s licensing strategy; patent searches; examinations of legal records of court proceedings; and analysis of citation trends for the seminal papers disclosing the invention of cotransformation. Findings: Columbia University and the inventors profited handsomely from the Axel patents, earning $790 million in revenues through licensing arrangements that tapped profits from end products made by biotechnology and pharmaceutical companies. Columbia’s aggressive effort to extend the patent duration also led to considerable legal expenditures and fierce controversy. In particular, obtaining and enforcing a 2002 patent proved costly, politically difficult, and financially fruitless and attracted intense criticism for behavior unbecoming a nonprofit academic institution. Conclusions: This case study raises several important questions about the logic and future revisions of the Bayh-Dole Act: Are revenue generation and financial rewards for inventing valuable technologies legitimate goals for this act? If so, does the federal government need credible mechanisms for oversight of, or checks and balances on, the rights conferred?
Author(s): Alessandra Colaianni; Robert Cook-Deegan
Keywords: biotechnology; history; intellectual property
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Volume 87, Issue 3 (pages 683–715) DOI: 10.1111/j.1468-0009.2009.00575.x Published in 2009
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