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At Sixth Shannon Lecture
Kennedy Surveys Borderlands of Public, Private Knowledge

By Rich McManus

Photos by Ernie Branson

On the Front Page...

Standing atop the dual promontories of editor-in-chief of Science magazine and president emeritus of Stanford University, Dr. Donald Kennedy surveyed both the positive and unintended negative consequences of exposing the frontiers of knowledge — formerly regarded as a public province — to private parceling in the sixth annual James A. Shannon Lecture on Nov. 20. He argued that the Bayh-Dole Act of 1980, enacted to stimulate the transference of the fruits of public research into marketable products, has had largely the same effect on the "knowledge commons" or intellectual frontier, that the Homestead Act of 1862 had on public lands of the American West, settled and made productive during the 19th century. Both acts reordered sensitive ecosystems which, viewed in retrospect, forfeited some integrity or at least some cultural coherence.


Dr. Donald Kennedy (l) meets NIH artist Al Laoang, who drew his portrait.

The Shannon Lecture always focuses on science's public policy implications, and Kennedy is well-positioned to comment; he is a former commissioner of the Food and Drug Administration and a former NIH grantee. Indeed he told one guest at a reception following his lecture that an NIH grant, won shortly after he earned a doctorate in biology, "saved my life."

"My first NIH grant had only four digits," he joked at the outset of his talk, titled, "A Second Post-War Revolution in Biomedicine." He said former NIH director Shannon and NIH "were symbols of hope for a generation of scientists." Following World War II, the United States made "a remarkable choice." It decided to divert its postwar economic might, including a huge investment in military research, into biomedical research, much of it basic. "No other industrial democracy made a similar decision."

The idea was that publicly financed research would create a huge "knowledge infrastructure" out of which industry could choose nuggets for private investment. "This was a wise thing to do," said Kennedy. "It transformed a research enterprise that had been the province of a small elite into a vast public 'endless frontier.'" The "decanting" of research resources toward health from the military was postwar revolution number one.

He likened unexplored intellectual territory to the yet-unclaimed physical spaces of the American West in the 1800s. The intellectual frontier, or "knowledge commons," was for years "largely publicly owned and managed." But just as the Homestead Act, which offered essentially free use of lands, and eventually ownership, to settlers who could improve their lots, the Bayh-Dole Act has had the effect of "enclosing" the knowledge commons, said Kennedy. With Bayh-Dole, the government relinquished its right to patent claims on the inventions of its grantees. The goal was to spur "technology transfer" by enabling federally supported scientists to patent and license their discoveries.

"It worked, sort of," observed Kennedy. "Like mushrooms after heavy rains, technology transfer offices sprang up in academia." With the incentive of royalty income, scientists abandoned the purity of the Ivory Tower. "There was a proliferation of start-ups, many peopled by faculty who profited by Bayh-Dole," said Kennedy.

The transformation of science into a deliberately profit-oriented enterprise was pushed further along by tax law changes in the late 1970s that reduced taxes on capital gains and offered more deductions on capitalization of research, Kennedy explained. A flood of venture capital ensued.

At Stanford University today, some 60 faculty are involved in more than 100 companies, he said. "The proportion of basic research done in the proprietary sector rose dramatically, due to powerful economic incentives...The research portfolio became as important as one's business plan." Landing a paper in as respected a journal as Science became not only academically, but also financially rewarding, even prospectively so: "Papers in Science came to have street value...Companies that were years away from having a product were valued by how their labs were perceived, how prestigious they were.

"Bayh-Dole is the Homestead Act of our time, along with accompanying statutory changes in the tax laws," said Kennedy. "Unclaimed spaces in the knowledge commons are filling in."

Benefits from this new enclosure are sundry, he allowed. "It's good to see papers in Science from company researchers rather than from MIT and Johns Hopkins," he noted wryly. He credits Dr. J. Craig Venter's hugely expensive private effort to map and sequence the human genome as another advantage of the new economic landscape (Venter is a former NIH scientist who took his ideas and ambitions to the private sector).

But there are costs, too, to Bayh-Dole, Kennedy warned. "There are serious problems for our venture that have fallen on scientists, institutions and journals," he said. "The erosion of easy communication among scientists, which used to be common, has been disappointing to me." Universities, whose technology licensing offices began with cautious guidelines, have become far more aggressive than ever anticipated, he said. Two years after Bayh-Dole passed, he related, the presidents of five research universities met to hammer out "guidelines for the new universe." They established three major principles: agreements between universities and industry were to be public; licensing was to be nonexclusive whenever possible; and coinvestment on the part of investigators with universities was forbidden — "schools shouldn't go into business with their faculties." Nowadays, the latter situation is common, Kennedy said. "Of the three principles, only the first is still reasonably intact."

He warned of other dangers: graduate students coerced to work on behalf of faculty company projects, conflicts of interest (objectivity sacrificed to profit pressures), the invariable muddying of such issues as space, salary and promotion. "Scientific exchange, too, is hurt," Kennedy continued, by the proliferation of technology licensing offices. MTAs, or material transfer agreements, "are increasingly burdensome legal documents — most researchers would like to be free of them." He quoted Stanford's Nobel laureate Dr. Paul Berg: Bayh-Dole has engendered "onerous barriers to the free exchange" of ideas and materials.

Journal editorship, too, has become a tougher enterprise; Kennedy gently called the results of the new profit orientation "a little odd and unexpected." For example, Science requires authors to provide cell lines and reagents to other scientists. What happens when a third party acquires the materials with a view to commercializing them? What about a company researcher who refuses to publish if coerced to share materials?

Papers in the agricultural sciences are particularly affected by issues involving trade secrets vs. openness, Kennedy reported. A new requirement of some journals is a "conflict statement" in which authors disclose links to industry, he said.

"There is a new public suspicion about our enterprise," Kennedy continued. Universities used to enjoy a more lofty status, and were seen as providing a valuable social function, he said. "This preferred status is eroded at the edges when we're perceived to be in business — and to be rather good at it."

The major research universities earned the same deference as Big Oil when it came to tax lobbying on Capitol Hill in the late 1980s, he noted. Like multinational corporations, universities run the risk of encouraging student unrest as they are seen more as economic powerhouses than as solvers of the world's problems. "This might become the hardy perennial of student resentment," he said, citing protests about high-cost drugs discovered with public money. "Universities pay a public-image price in their overeager response to Bayh-Dole."

Dr. Cyrus Creveling (l), president of the NIH Alumni Association, presents Kennedy with a plaque in honor of the Shannon Lecture. The NIHAA hosted the talk, along with NIDDK and OD; sponsors were NIMH and the NIH Federal Credit Union.

Kennedy returned to the Homestead Act to find a remedy for the current dilemma. The act was very effective at the beginning, as settlers moved West, first to the corn belt and prairie grasses, then to the wheat belt and the range. In the ideal situation, yeoman farmers thrived. But the mountains brought more serious problems for settlers and few staked mountain claims, which were hard to lay out. Mining and railroad interests gained control of huge parcels, often without offering any improvements. Late in the game, forests and parkland were ceded back to the government as privately unprofitable, which gave rise to a generous network of national parks.

Kennedy sees much the same sort of endgame playing out in Bayh-Dole, predicting continued border skirmishes and sectoral hostility, and continued capture of public value by private interests.

"Private entities can seal off public information," he said. "It's already evident in the plant sciences," he noted, warning that there might eventually be private "hijacking" of some germplasm.

He concluded by reminding the audience of the wisdom of an old English poem, once read on the floor of Congress: "The law will punish man or woman/ Who steals the goose from off the common,/ But leaves the greater felon loose/ Who steals the common from the goose."

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