Property and Power on the Endless Frontier

Abstract

Much of the innovation in the American economy originates in the federal research system––the vast set of federal agencies that directly fund R&D at public research centers, universities, and industrial labs. By the time these innovations are eventually brought to market, however, they are under private control, a result of the legal framework that determines ownership rights to state-backed inventions. Since the passage of the Bayh-Dole Act in 1980, government patent policy has been settled in favor of private ownership of government-funded innovation. Why does the government channel massive amounts of public resources into groundbreaking research, only to turn over the fruits of that research to private hands?

The standard explanation suggests that the “technology transfer” consensus rests on the modern rationale that intellectual property rights are necessary to encourage back-end commercial development rather than initial investments in research. Under this justification, even though private contractors do not assume the up-front risks––as the traditional defense of patent rights holds––they may still require exclusive rights in order to turn innovations into commercializable products. This rationale posits the commercial spinoff as a chief aim of the federal R&D system, and thus emphasizes patent utilization and efficiency as leading considerations. In the leadup to the 1980 watershed, this explanation goes, policy makers increasingly embraced this rationale, and it quickly became the conventional wisdom on which the new consensus rested.

This Article revisits the government patent policy debate from a political economy and historical perspective, and in doing so, motivates a reassessment of the prevailing framework. The commercialization rationale and the resulting technology transfer consensus capped a decades-long political conflict, one replete with alternative value claims and untried policy choices. At the heart of this conflict was the power of R&D-intensive corporations to dominate and control industrial research, and the attempts of progressives to use public R&D to limit that power and redistribute the social benefits of innovation. Beginning in the New Deal, progressives conceptualized government-funded research and public patent ownership as a counterweight to private research power and a means of protecting science from corporate influence. With the dramatic expansions of federal R&D during World War II and the Space Race, progressives drew repeatedly on these reform impulses and revived the patent policy question on broad terms. At multiple critical junctures, private industry led the attack against these critiques and promoted commercialization instead as the leading policy aim. After successive failures to shift government patent policy along progressive lines, the more expansive conceptions of government patent policy were abandoned. The commercialization rationale was all that remained, and the push for a pro-business policy finally succeeded.

This revisionist account has both conceptual and practical implications. While some observers have framed the federal R&D system writ large as an exception to the neoliberal gutting of state capacity, government patent policy should be understood instead as a triumph of business counter-reform efforts that sought to preserve corporate power—one overlooked dimension of neoliberalization in the law more broadly. By situating the technology transfer consensus in this longer political conflict, this Article also aims to revive the debates over government patent policy on broader value terms. With the resurgence of interest in federal R&D as a tool of industrial policy to maintain American competitiveness, this institutional choice is increasingly pressing. In revisiting government patent policy, policymakers should reintegrate the concerns raised historically by progressive critics and take inspiration from their proposed policy alternatives.

Keywords: Intellectual property, patents, innovation policy, federal R&D