Compulsory license doesn’t solve

[Brenda M. "Preserving the Fruits of Labor: Impediments to University Inventor Mobility," Tennessee Law Review 89, no. 1 (Fall 2021): 1-66 heinonline gdi-tm]

Broad Compulsory Licensing Should Not be Adopted

Although rarely used in the United States, a broad compulsory licensing requirement might allow for access to innovation-essential components of mobility, but it would raise serious concerns as to its effects on innovation incentives. 371 The Bayh-Dole Act allows the government to require a university "to grant a nonexclusive, partially exclusive, or exclusive license" on reasonable terms. 372 The government can exercise its march-in rights if necessary, for example, to ensure that an invention is "available to the public on reasonable terms" or "to alleviate health or safety needs."373 An agency could determine that granting licenses to departing inventors would "better promote the policy and objectives" of the Act.374 The government has not yet exercised march-in rights, however. 375 Since Bayh-Dole's enactment, only a few petitions asking that the government exercise its march-in rights have been filed.376 All of the petitions were dismissed. 377 In light of the numerous administrative obstacles to government intervention, several scholars have proposed amending the Act to permit greater discretion in intervening.378

Numerous variations on standard compulsory licenses have been proposed. They range from "public" patents with zero royalties379 to requiring universities to offer only nonexclusive licenses.380 Recently, Ian Ayres and Lisa Larrimore Ouellette proposed a market-based test that would require universities to offer a nonexclusive patent license for "no more than the cost of patenting" before being permitted to offer an exclusive license.381 If the university can find a company that agrees to commercialize the technology with a nonexclusive license, they propose that the university would be required to provide a nonexclusive license at no cost to any other interested firms.382

Although the market-based test might be useful in addressing some of the issues mentioned previously by providing departing inventors with access to their inventions, it raises several concerns. The proposal requires finding a firm willing to develop the invention on a nonexclusive basis.383 The market-based test may also adversely· impact innovation incentives because the proposed nominal fee would only cover the costs of patent acquisition by the university,384 not the costs of research and development for that invention or countless others that were not successful. The Bayh-Dole Act itself recognizes the possibility of using patent income to support such "unsuccessful'' inventions, stating that "the balance of any royalties or income earned by the contractor with respect to subject inventions . . . [will] be utilized for the support of scientific research or education."385 Some scholars maintain, however, that the use of technology transfer as a way of funding research is "highly inefficient."386